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More than 350 North American Pubs Using a Paywall, But do They Work?

By Scott Olson on Thu, Dec 06, 2012 @ 01:31 PM |


News flash – print ad revenues at newspapers are falling and have been for 25 consecutive quarters. Oh wait, you already knew that, at least on some level. In an effort to reduce some of that pain, more than 350 North American publications have turned to the paywall to cure what ails them. The question remains, however, is that the right model for replacing revenue to stabilize the industry? Depending on who you talk to, you’re going to get different answers.

For instance, according to a November 28 article from Media Bistro, USA Today publisher Larry Kramer doesn’t feel his publication is ‘unique enough’ for people to pay for it. Kramer was quoted as saying, “I think we would lose more than we would gain.” Clearly he understands there is cost behind such a model and isn’t convinced those costs could be recouped by trying to get his readers, who are already enjoying the USA Today content for free, to all the sudden pay for it.

On the other side of the coin, you have investors who are watching every move the papers make in an effort to gauge their long-term viability. In October, the Wall Street Journal published a story in which Evercore Partners analyst Douglas Arthur said, “The market is starting to reassess the death of newspapers based on the success and aggressiveness with which some of the major newspaper brands are implementing digital paywalls.” That whole reassessment thing is great for any business built on newspaper advertising and relationships with publishers.

Like the rest of the publishing industry, however, the paywalls are still figuring themselves out. For instance, the Financial Times considered putting its most popular blog behind a paywall. A blog, behind a paywall? That just sounds like a bad idea. And it turns out it was because the plan didn’t last and Financial Times ditched it because they recognized, regardless of their thoughts and feelings on paywalls, blog content is not something people are willing to pay for. They’ll just find a different blogger.

This is by no means the end of the story. With only, but already, 350 publications moving to this model, all with different methods for implementing the paywall, much is yet to be decided. Some models give readers access to a limited number of stories each month, others are included with a paid print subscription and some sites completely lock readers out until they have a username, password and a credit card number of file.

So what’s the best method? That is still to be determined. Paywalls are coming up and down on a regular basis, for instance when a natural disaster (Sandy) hits a certain area and news, in any format, is crucial to readers. In the end, what’s going to drive what publications decide is their ability to deliver their content to their readers in the way they’re willing to accept it, either paid or free.

The key is for publishers to determine what method they’re going to use to deliver the local content readers go to newspaper websites and newspapers for in order to stay up to date. In fact, coming full circle to USA Today, the local content, and lack of it in that publication, is the exact reason they’re staying away from a paywall model.

What do you think? Does the paywall make sense as publications are trying to recoup revenues lost in print and bring advertisers into their digital versions? Or are they better off giving their online content away free of charge and moving away from a subscription-based model to an advertiser-based model? In due time we’ll know, but in the meantime, if you’re looking for the benefits of local advertising, check out our recent eBook.

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Scott Olson is the director of marketing at Mediaspace Solutions. His career has spanned marketing positions in the non-profit, software and utility sectors providing various marketing experiences.You can connect with Scott on FacebookGoogle+Twitter or LinkedIn.

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