Saturday 24 June 2017

Steve Dempsey: The evolution of the paywall - Are they getting less leaky?

'With the rise in ad-blocking, declines in print and also in online-advertising revenues, news outlets are trying to get more consumers to pay - and to get them to pay more.' File photo: Depositphotos
'With the rise in ad-blocking, declines in print and also in online-advertising revenues, news outlets are trying to get more consumers to pay - and to get them to pay more.' File photo: Depositphotos
Steve Dempsey

Steve Dempsey

Getting consumers to pay for news content online is tough, especially in English-speaking markets.

A recent Reuters Institute Digital News Report found that, on average, 9pc of English-speaking consumers claim to pay for online news content or have accessed a paid-for online news service in the last year.

But there are some interesting quirks.

In countries where paying for access to online news is relatively common, the amount paid is relatively low. So while 20pc of Polish consumers pay for news, the average amount they pay is just £9. Compare that with the UK, where only 7pc pay for news, but shell out a whopping £82.

In Ireland, we prefer to pay for news on a one-off basis rather than ongoing subscriptions, and 9pc of us claim to have paid for news, paying an annual average of £28. In the US, 9pc also pay, but the average amount is £62 per annum. The press in Scandinavia has had great success by offering consumers print-and-digital bundles. In Norway, for example, 27pc of consumers pay for online news, spending an annual average of £41.

With the rise in ad-blocking, declines in print and also in online-advertising revenues, news outlets are trying to get more consumers to pay - and to get them to pay more.

But before they look for cash, some publishers are looking for data. Washington Post readers who arrive to the site from social media have recently found that the publisher is asking them to log in, or give their email address, and sign up to the paper's 'Post Most' daily newsletter. Mind you, the Post has had a leaky paywall since 2013. However, until recently, stories accessed through search or social media didn't count against the paywall, but that loophole is closing it seems.

And other publishers are closing similar loopholes and backdoors, too. The Wall Street Journal has experimented with closing a similar gap in its paywall that allowed readers to find stories by Googling the headlines. At the Global Editors Network Summit in Vienna last week, Rainer Esser, general manager for Die Zeit, announced what he called a "charming paywall". All unique content from the paper and online editorial team will soon be put behind a paywall - but there'll be a set number of free stories. After the reader has reached their quota, they'll be prompted to sign up for a free trial for a set period. And once the free trial has expired, they'll have to pay. It's an incremental approach.

A more radical approach was announced by The New York Times at the Cannes Lions Advertising Festival last week. CEO Mark Thompson revealed that an ad-free online subscription offering is on the way.

Thompson said that readers need to realise "the journalism they enjoy costs real money and needs to be paid for".

This follows recent announcements that The New York Times may bar ad-blocker users from seeing any of the newspaper's content. An outright ban on ad-blocker users may well need to be part of this new subscription; how else could the New York Times prevent users from signing up for the current $9.99 subscription offering and using ad-blocking?

It's a strange plan, born of either big-brand hubris or big balls. And it's one that probably wouldn't work for lesser publishers who lack the size of audience to allow them to decrease their impressions for advertisers in return for small gains in subscription revenue.

So how do we square the publishers' desire to make people pay with the research that indicates they won't?

There may well be a two-tier net for publishers emerging. Premium brands that create unique and scarce content - whether through excellent journalism, by creating content for a niche audience or in a specific language - may well be able to successfully charge users for access to content.

The flipside is that any publisher who lacks a premium brand - built around a sense that it offers news and stories of importance that you won't get anywhere else - is going to struggle.

And in certain markets (I'm thinking English-speaking, general news sites - and yes, that's most news sites right here in Ireland), publishers are going to struggle to make people pay. Why would they when there are endless free news outlets, and also Facebook and Twitter giving them targeted, personalised news?

Having given away their content for free, and over-relied on an 'advertising-only' model, many publishers are now going to find it hard to make readers pay.

Sunday Indo Business

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