As advertising revenue in the traditional media industry continues to decline, more and more newspapers and other publishers are putting up paywalls of various kinds — porous ones, rock-hard ones and loosely-metered ones. But veteran media executive and analyst Alan “Newsosaur” Mutter has some sobering news: while some newspapers like the New York Times are reaching a substantial number of readers with their metered plan, most other newspaper publishers are likely only going to get a tiny fraction of their readers to pay.
Take Gannett, for example. The newspaper chain is the largest newspaper publisher in the U.S. as measured by circulation, with more than 81 daily papers, and it has been betting heavily on paywalls to drive additional revenue at its various properties. So after two years or so of trying to push its paywall strategy, how many of Gannett’s newspaper readers have been convinced to sign up for digital access? According to Mutter, that number is a little over 2 percent.
People pay for entertainment, not news
When it comes to the broader market of people paying for access to media content, Mutter notes that even the New York Times — which has had a remarkable amount of success with its digital-subscription plan, with almost 35 percent of its total readership paying for online and mobile access — pales next to a giant like Netflix, which has approximately 40 times more subscribers than the NYT:
This might seem like an unfair comparison, since Netflix specializes in entertainment content and not news, but I think Mutter’s point is a good one: plenty of people are willing to pay for movies, TV shows and music, but a dramatically smaller number of them are willing to pay for news. Why? In part, because those other forms of content are, well… entertaining. News, in most cases, is not. Many consumers are more than happy to watch or listen to the same TV show, movie or song multiple times — something that almost never happens with a news story.
“Given their importance and power, you have to wonder why the Journal and Times aren’t doing better. But the simple answer may be that most consumers would rather pay for movies and music than for news, which is widely available for free at any number of sites ranging from Yahoo and Google News to Huffington Post and the Drudge Report.”
Find other things to charge for
For Gannett — which Mutter argues is large enough to be a rough proxy for the U.S. newspaper market — most of its titles are getting low single-digit numbers of people to sign up for their paywalls. Some newspapers appear to have decided that putting a wall around their commodity news is a bad strategy altogether: the San Francisco Chronicle essentially dismantled the paywall on its news site earlier this year, and is trying to develop a separate site with more unique content.
Mutter’s analysis fits with the results from a global survey of people’s attitudes towards paying for news that the Reuters Institute for the Study of Journalism did earlier this year: it found that on average about 5 percent of people were paying (although in certain countries that number was as high as 20 percent), and that less than 15 percent of those surveyed said that they could ever see themselves paying for online news content in the future.
One possible solution to this problem, as Ken Doctor has pointed out, is to stop trying to sell just access to the news and think of other things you could sell — such as access to your journalists on special topics, events and other types of content.
Post and thumbnail images courtesy of Shutterstock / Voronin76