Will the Internet audience accustomed to free milk be willing to buy the cow?
The Journal Sentinel recently disclosed it expects to erect some form of pay wall in the coming year. The paper already has a limited pay wall, imposed for its archived stories older than 14 days — a widespread industry practice. (The archive fee is waived for 7-day-a-week subscribers.) Daily access though is free, as it has been for many daily newspapers across the country.
That’s changing though. The New York Times helped lead the way, creating what appears to be a fast-growing model: Visitors to the Times website can read 20 articles a month for free but must subscribe for unfettered access. The change, which began this year, was implemented several years after the Times dropped its “Times Select” paid access model. That earlier approach had turned the newspaper’s vaunted stable of op-ed columnists into premium content, requiring a “Times Select” subscription to read them online.
Even The Onion is preparing to charge for content — and that’s no joke.
Necessity has given rebirth to pay walls. For years, editors and publishers have been grappling with how they could put a tourniquet on hemorrhaging revenues and bemoaned the culture of content-for-free that had grown up on the Internet.
There have been exceptions. The Arkansas Democrat-Gazette and its sibling paper, the Chattanooga Times Free Press, both owned by Walter Hussman, walled off much of their content from anyone but paying subscribers years ago, and while circulations sank elsewhere, held their numbers basically flat, notes Ken Doctor, a newspaper industry veteran who now studies the business side of journalism in the digital age.
Then, says Doctor, author of the book Newsonomics, at a San Diego industry conference in 2009, heavyweights like Rupert Murdoch and William Dean Singleton drew the battle lines: Somehow, publishers would have to figure out how to charge for content.
By that time it had become clear that, despite the growth of digital advertising, advertising alone wouldn’t restore the industry’s profits.
“The U.S. newspaper industry makes about $3 billion a year in digital advertising,” Doctor told Pressroom Buzz in a phone interview last week. “But they’ve lost about $20 billion a year in print advertising.”
(Murdoch’s role in that epiphany is especially interesting: When his News Corp. first made its run at Wall Street Journal publisher Dow Jones, he famously talked of dropping that newspaper’s pay wall. Once he got his hands on it, he quickly changed his mind.)
Despite the desperation for a solution, the way forward looked as murky as ever. Then came the iPad.
“We knew it was coming,” says Doctor of Apple’s new version of the tablet. “But we didn’t know quite what it was.” Even when it was unveiled in January 2010, publishers weren’t sure what to make of the gadget.
It was about the same time that the Times announced that it would start charging for content online — but probably not for about another year. But the paper kept vague about its plans and model.
Then the iPad took off. “It was one of the fastest-adopted consumer devices ever,” says Doctor. “This changed the Times’ thinking. The iPad was a transformative reading experience.”
It was something else as well. The iPad from the start borrowed its revenue model not from the everything-is-free Internet, but from the incremental payment business model of the MP3 player and the smart phone. Users who turned up their nose at subscribing to an Internet news site didn’t think twice about spending a few bucks for an “app” that they downloaded to their smart phones — games, guides, and more.
“People are willing to pay for mobile,” Doctor says. People are spending money on products in the form of apps. So, he continues, news industry execs started asking themselves and each other, “might they spend money on news products delivered through apps, even though, counterintuitively, the same products are delivered online and have been for 15 years?”
Different publications tried different approaches, from an annual subscription model to a one-time charge for an app that might be limited to people who already had a print subscription. When the Times unveiled its pay wall early this year, it came up with tiers of pricing, from a simple conventional web access to an “all-access” model that includes tablets and mobile phones.
In short, the iPad and its fellow tablets did something that publishers up to that point thought might be impossible. Until then, Doctor says, “they didn’t really see how they were going to change consumer psychology after 15 years and get people to pay for something that they’d been getting for free.”
Suddenly, the tablet showed that it could replace the ink-on-paper newspaper for some readers — and that they’d pay for it. “It’s a gift from the Apple gods,” he jokes.
So does that mean the industry’s now out of the woods?
Not quite. There are still an almost infinite number of unanswered questions — about the role of advertising revenues going forward, about where the tipping point is in the mix of digital and ink-on-paper readers and how much you end up charging people in each category, and whether, or when to drop print altogether.
“If we flip the switch and go wholly digital,” Doctor notes, “you can cut a hell of a lot of costs out of your operation.” But many readers may never be ready for that.
Still, the tablet revolution is the first occasion for optimism in the business in years.
“It’s a reprieve,” Doctor says. “It’s the first time where we’ve really seen the emergence of a clear business model and a route to the future. It’s a clear route — and a year and a half ago there wasn’t one.”
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Speaking of The Onion: The satirical weekly has its serious side, in the form of the arts and entertainment website The AV Club — and two items by Matt Wild caught my eye in the last week. One was an incisive media commentary about WTMJ-TV’s coverage of the violence at the State Fair. The other was Wild’s trenchant analysis of fears in Bay View about plans for an adult day care center there. Kudos to Wild on both.
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Not a Recession: Ezra Klein at the Washington Post interviews a scholar who argues persuasively that what we’re going through isn’t just a recession. Economics reporters, take note.
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