3. David Brauchli, CCO of Piano Media:
“Most people believe news on the internet ought to
be free, but if this continues to be the case, most
media will die and this will directly affect the
democratic societies we live in. Therefore not only
is it in the interest of the media to charge for their
premium content, it is also in the interest of the
consumer.” (D. Brauchli, personal communication, August 15,
2012).
4. PEJ’s study The Search for a New Business Model in
March 2012, found
newspapers process of building digital revenue was
painfully slow: “shift to replace losses in print ad
revenue with new digital revenue is taking longer and
proving more difficult than executives want.”
Digital gains don’t make up for print losses: every one
dollar gained in digital advertising income meant
seven dollar loss in print revenue.
Source: PEJ, The Search for a New Business Model,
http://www.journalism.org/analysis_report/search_new_business_model
5. Source: PEJ The Search for a New Business Model,
http://www.journalism.org/analysis_report/search_new_business_model
6. Source: PEJ, The Search for a New Business Model,
http://www.journalism.org/analysis_report/search_new_business_model
7.
8. In November 2012, Google returned 2.6 million
search results for newspaper paywalls whereas
Google Scholar gave 484 search results for the
same term.
So far academic research on paywalls has
concentrated on the question: Will they pay?
Most of the research so far has concluded that
newspaper audience is not willing to pay for
general news content (Chyi 2005, 2012).
Paywalls are a recent phenomena and therefore
research around the topic has just started to
emerge.
9. There has been rapid increase in number of
paywalls in past couple of years, over 300
newspaper paywalls in the US alone.
It is estimated that by the end of 2012 20% of
US’s 1,400 dailies will charge for their digital
content.
Major newspaper groups such as News
Corporation, New York Times Group, Pearson,
Gannet and Axel Springer have introduced
paywalls.
10. Paywall is a system that prevents Internet
users from accessing website content without
paid subscription.
Different kind of paywalls:
Hard – no free content
Soft – some free content
Metered – restricts number of free articles
Freemium – some content free
Premium - charging for premium content
11. The research undertaken analysed different paywall
models, and how their impact on media corporation
revenues in the US and UK, Slovakia, Slovenia and
Poland, Australia, New Zealand and Finland.
The analysis was based on data collected from annual
reports, market announcements, press releases,
corporate websites and personal communication.
Major challenge: lack of transparency in media
corporations disclosure and (non)comparability of
figures
12. A metered paywall model was pioneered by FT – it
introduced a paywall in 2007, 10 free stories a month
This year the number of its digital subscriptions exceeded its
print circulation first time, it now has around 300,000 online
subscriptions
In the US, a standard FT online package costs $US 300 per
year
Roughly speaking paid online content brings 13% of the FT
Group’s annual sales
Problems: In November 2012, it brought down paywall on its
highly influential blogs – so far papers philosophy has been
that “if the content is of value, it shouldn’t be free”; internal
problem - bloggers might feel undervalued
13. The New York Times Group launched its metered
paywall for The New York Times online
NYTimes.com in March 2011, allowing its readers
to view 10 articles each month at no charge
In July 2012 it had 532,000 digital subscribers ;
cheapest online package US$180 dollars a year
NYTimes.com’s revenue from digital
subscriptions presents roughly 7.2 percent of the
total annual circulation revenue
Problems: discounts, paywall easy to bypass,
articles available via search engines and social
media
14. Cable TV based model introduced in Slovakia, Slovenia
and Poland
Subscribers pay a monthly fee to get a package of
content from various publishers available behind the
paywall
Cheapest subscription fee in Slovakia is US$59 per year
– gives you an access to the content of nine publishers
Gives audience a relatively easy access to multiple
content via one payment system
Problems: revenue split between Piano Media and
different publishers - Piano Media takes 30 percent of
revenues; need high volumes of regular readers to
create substantial revenue out of the system
15. Rupert Murdoch’s News Corporation introduced hard
paywalls for its UK based The Times and Sunday Times in June
2012 – no free articles
The Times and the Sunday Times have combined digital
subscription of 233,073 copies
The cheapest subscription package for The Times is $US154 a
year
The revenue from two papers combined subscriptions
represents around 8.9% of News Corporations annual
publishing revenue
Problems: paywalls brought down for major events, such as
Queens Jubilee – the business model is unsustainable;
softening of wall: readers can read couple of sentence for free
via Google search (none of the content was available via
Google earlier on)
16. Rupert Murdoch’s News Limited launched a freemium
paywall for The Australian in October 2011 – some content
on site free (mainly provided by news wires)
Charges for premium content such as analysis
Annual digital pass US$147 which gives an access to news
content via web, tablet and smartphone
The Australian has 27,796 digital only subscribers and
3,445 print & digi subscribers
The revenue created by digital subscriptions represents
0.67% of News Corp’s annual publishing income
Problems: visitor numbers to the site has plummeted,
plenty of the subscriptions included in figures are trials
and offers
17. The Australian Financial Review (AFR) and the National Business
Review (NBR) are charging for what they call premium content
In Australia, AFR was last December forced to cut its annual
subscription price from US$1188 to $US709; it has 20,000 digital
subscribers
With this subscription base it would make roughly $14 million
revenue which represents 28% of Financial Review Group’s
circulation revenue - this might be misleading
In New Zealand, NBR has 3,000 individual and 165 corporate
digital subscription, making US$0.57 million out of its paywall
Problems: the way these companies disclose information about
their digital only subscriptions makes calculations challenging;
high pricing which might prove unsustainable
18. Sanoma, the leading media group in Finland, launched a
metered paywall in November 2011, offering 20 free articles
a month
It charges annual fee of $US151 for an access to its website,
mobile apps and digital newspaper
The main newspaper Helsingin Sanomat has already 130,000
readers with a digital access
Sanoma’s news division share of the corporates digital
revenue is around 12%, expected to be this year 14%
The company has sold bundled packages = print + digi,
successfully and around 33% of its readers has bundled
package
Problems: with already such a high number of digital
subscribers, the uptake in digital only packages might be
limited
19. Annual subscription in Number of free articles per month
Company US$ (cheapest fee)
NYTimes.com 180 dollars 10
Piano Media (in Slovakia) 59 dollars 0
Financial Times 300 dollars 10
The Times 154 dollars 0
The Australian 147 dollars 0
AFR 709 dollars 0
Helsingin Sanomat 151 dollars 20
20. Company Number of digital
subscribers
Wall Street Journal 537,000
Financial Times 300,000
The New York Times 380,000
The Times 131,000
The Australian 40,000
Australian Financial 20,000
Review
National Business Review 3,000
Helsingin Sanomat 130,000
21. Digital subscriptions present roughly 10% of news companies total
circulation/publication revenues , and therefore don’t offer a viable
business model in a short term.
The digital subscriptions numbers provided by news organisations are far
from transparent, and some of these figures include cheap trial
subscriptions, and possibly some of them include bundled print and
digital packages, making calculations challenging
Many newspapers have been forced to lower the price of their paywalls
in order to attract more subscribers – the impact of this needs to be
further assessed
Some of the news companies have recently softened their paywalls in
order to gain wider audience: for example, The Times in UK has made
some of its content available on Google search - it is too early to say if
this has given a boost to its digital subscriptions
22. The main question is how sustainable the online news
paywalls are: it is paradoxical that their come down when
major news events occur – as seen in case of Queens
Jubilee in the UK, and Hurricane Sandy in the US.
Even the bigger question is will the people pay for a
general news content in a longer run?
The recent study of NYTimes.com by Cook & Atari (2012)
suggest that people are willing to pay for online news if
they are offered compelling justification: such as that the
news company will go under without online contributions
The increasing digital subscription numbers seem to
suggest that readers are willing to pay for general online
news content – but more accurate data is needed to asses
this
23. Paywalls might provide stable extra income, but
at the current levels their are not producing
enough revenue to rescue failing news
organisations.
Paid content has implications for democracy and
public sphere: what about if all the important
political and business decision are hidden behind
paywalls?
Charging for online news content might lead to
digital divide between those who can pay and
those who can’t.
24. Paywalls are rapidly emerging, and we might
be entering to a paid content era.
But as David Brauchli, CCO of Piano Media,
puts it: “any money they [publishers] get
from subscription right now is icing on the
cake. We hope that changes over time, but
for now, this is where the industry is.”
