Tear Down That Paywall! Publishers Can't Afford to Repel New Readers

By Mutter, Alan D. | Editor & Publisher, December 2015 | Go to article overview

Tear Down That Paywall! Publishers Can't Afford to Repel New Readers


Mutter, Alan D., Editor & Publisher


The newspaper publishers who put paywalls on their websites in the last few years should declare victory and tear them down before the barriers become more trouble than they are worth.

It's true that paywalls slightly ameliorated the 40 percent dive in the industry's aggregate revenues in the last decade. But the continued use of pay systems is bound to limit audience growth at a time when hilly 79 percent of the traffic to the typical news site comes from casual visitors, instead of people navigating directly to NewspaperSite.Com.

More on that in a moment. First, the background:

After giving away their content for free for more than a decade, a growing number of newspapers in the last few years began putting paywalls on their websites. In all, about 450 of the nation's 1,300 papers operate paywalls, according to Meres & Technology magazine.

Publishers opted for paywalls, in part, because they wanted to emphasize the value of the content they invest in producing. Even though one of three newsroom jobs has been eliminated by expense cutting in the last decade, newspapers still put more journalistic feet on the street than any other medium.

The primary reason publishers installed paywalls was to help offset a catastrophic collapse that took industry sales from a record $60 billion in 2005 to an estimated $34 billion in 2015. (The revenue statistics cited in this article are from the Newspaper Association of America. After publishing detailed data since 1950, the trade association stopped issuing sales reports as of 2013, requiring folks like me to project performance in subsequent years from the financials of the publicly traded newspaper companies).

When publishers launched their paywalls, they hoped to attract bazillions of new customers itching to pay for digital content. Unfortunately, that didn't happen. In but one example, the Gannett Co., the biggest newspaper publisher in the land, reported awhile back that it had acquired fewer than 60,000 digital-only subscribers--a sum equal to about two percent of the 3 million print copies in sold on an average day.

Yes, the Wall Street Journal and New York Times each has about 1 million digital-only subscribers. But they are unlike the typical newspaper in that they are mission-critical reading for the international elites in government, business and academia, whose readers for the most part pay with the boss's credit card. To put those achievements in perspective, 1 million paid readers represents a puny penetration of 0.03 percent of the 3 billion Internet users in the world. Further, 1 million paid subs pales against the 65 million subscribers of Netflix and the 20 million subscribers at Spotify. …

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