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Papers owned by public companies join the parade

Five years ago the notion of newspapers charging for online content was dismissed by many as an unworkable strategy.

Today it’s become an industry norm.

Fully 70 percent of the 416 publishers interviewed in a recent survey said their daily newspapers had adopted some form of paid content model. The survey, the annual Publishers Confidence Index conducted by the Reynolds Journalism Institute and the Missouri School of Journalism, is the largest of its kind: respondents represent 30 percent of all American dailies.

A similar survey of publishers in 2011 found that 41 percent were charging for online content; another survey in 2012 found that 47 percent of respondents were charging, and that many were about to launch paid-content models.

In the most recent survey, conducted in late 2013, more than half (55 percent) of those who are not now charging said they plan to launch a paid content model in the coming year.

In the early days of the paid content movement, smaller, privately held newspapers led the way. In early 2011, 46 percent of those papers with average weekday circulation under 25,000 were charging while 24 percent of those over 25,000 were charging. But in the most recent survey there is no statistical significance in the difference between small, medium and large newspapers.

When asked what they had learned by asking users to pay for online content, a number of publishers offered answers like this one from a small family-owned daily in the Southwest: “I’ve learned over the past 15 years if you give it away for free, they’ll take it. And when it comes to local news, people are willing to pay for quality local journalism.

Another publisher of a community daily in the Northwest said: “It’s tough to get people to pay, but we were leaving money on the table by not charging people. I’ve learned we need more content online and different kinds of content. We’ve had less stops in print after the paywall than before and I attribute it to people no longer being able to get the content for free online.”

The most common sentiment of all was expressed by numerous publishers of newspapers of all sizes, types and regions: “We should have done it sooner.”

Ownership was a significant factor in variances in implementing paid content models. In the survey, 82 percent of those newspapers belonging to publicly traded companies are charging, while 76 percent of single-property independent papers and 64 percent of papers in privately held groups are doing so. This is a change from previous studies. Two years ago, papers held by publicly traded groups lagged well behind privately held companies in adopting paid content models.

The survey shows that most (60 percent) of the papers charging users for online content are using a meter limiting the number of free views for a certain period of time. Larger newspapers tended to favor the metered approach — 81 percent of those with circulation greater than 75,000 use a metered method, as did 78 percent of papers between 50,000 and 75,000 and 75 percent of those with circulation between 25,000 and 50,000. Of those with a circulation size of less than 25,000, 52 percent used a meter.

Respondents with metered systems were asked how many stories users were allowed to view for free before being asked to subscribe or pay. A little more than one in five (27.5 percent) allowed five or fewer free views in 30 days; fully 70 percent allowed 10 free views or less in 30 days.

The publishers were asked how their online traffic was affected when they began charging. One third (33 percent) saw a drop in traffic, while 32 percent said traffic stayed the same. One in four said traffic increased; one in 10 said they didn’t know. Of those who saw a drop in online traffic, more than two-thirds (69.9 percent) said the traffic drop was 20 percent or less. Many volunteered that traffic numbers returned to earlier levels within the first year after implementing the pay model.

Publishers also were asked about how print subscriptions changed since they implemented a paid content mechanism. Forty-three percent reported no change; 39 percent saw a decrease while 9 percent cited an increase. Nine percent didn’t know. A number of publishers citing an increase said they had offered a subscription option that tied one or more days of a print subscription to an online subscription.

Pre-launch activities

Publishers who reported having paid content models in place were asked about things they may have done to prepare for the launch.

The majority (71 percent) did not survey their audience or conduct focus groups before implementing a pay mechanism. Most (72 percent) said they did no testing within a smaller audience or market. The vast majority (85 percent) consulted with other newspapers, and nearly three-fourths (74 percent) said they consulted with experts in the newspaper industry before launching.

Changes made at launch

Publishers with newspapers that charge were also asked about other changes they might have made when the pay model was introduced.

Three in five (59 percent) said they did not increase the amount of news content offered online, although about the same percentage (61 percent) said they improved either the content or presentation of the news content when they launched. Two-thirds (67 percent) said they improved the overall user experience when they launched. Seventy-one percent said they promoted the change extensively.

Collecting user data

While the vast majority of newspapers (90 percent) charging for content collect contact information from digital users, most respondents are collecting or using little other data. Only 26 percent track demographic data such as age and gender; only 23 percent say they are collecting information about interest in various types of news from their digital readers.

Circulation size and ownership type was correlated to the collection of information about news interests. Of the newspapers in publicly traded groups, 34 percent collected information on individual news interests, compared to 23 percent of the independent single properties and 18 percent of those in privately owned groups. Of newspapers with circulation of 75,000 or more, 30 percent collected such information, the same proportion as those between 25,000 and 50,000. Of newspapers between 50,000 and 75,000 circulation, 44 percent collected such information. Of those newspapers under 25,000 circulation, only 19 percent collected data on news interests.

Strategic plans for growth

Publishers also were asked, “Do you have a plan in place to grow your digital audience following the implementation of your paywall?” Four in five (82 percent) said “yes.” Of newspapers with more than 50,000 circulation, 95 percent had a plan in place, significantly more than 79 percent of those whose circulation was less than 50,000. When asked to describe their plans, an overwhelming majority responded by mentioning promotional efforts.

The Publishers Confidence Index is funded by the Houston Harte Endowed Chair at the Missouri School of Journalism. Telephone interviews were conducted by the Center for Advanced Social Research. Faculty members of the Missouri School of Journalism crafted the questionnaire, with input from Tom Rosenstiel of the American Press Institute.

Next Monday: New products and new revenue

Michael M. Jenner  
 
Professor and Houston Harte Chair in Journalism


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