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The paywall experiment

June 25: Earlier this year, critics scoffed at Newsday’s unsuccessful attempts at establishing an effective paywall. And it didn’t go unnoticed when the Valley Morning Star, a mid-range market paper based in Texas, tore down its paywall less than a year after it went up.

Despite these failings, several newspapers are going forth with plans for their own pay models using the paywall dealer Journalism Online. Announced last year, the company works by allowing website producers a variety of charging options, while providing the reader with a common login across all other sites connected with Journalism Online.

MediaNews Group will join the supporters of paywalls when the Chico Enterprise-Record and York Daily Record re-launch their sites in July. Using Journalism Online as a vendor for its pay system, the two papers will allow readers a certain number of article clicks before a paywall comes up. However, not all content will have a price tag.

“It was surprisingly easy to come up with a philosophy for what goes behind the wall and for what stays in front,” said Howard Saltz, vice president of content development for MediaNews Group. “We came up with those pretty quickly, there wasn’t a lot of debate – we would put behind the wall the kinds of things that only newspapers do and what newspapers employ professional journalists to do.” This means investigative news, enterprise, analysis and columnists. What stays in front of the wall, he noted, is content that is online-oriented, such as breaking news, blogs, comments, social networking, video, and searchable databases and calendars.

To regain any lost traffic as a result of the paywall, Saltz noted new content was created that could be accessed for free. Aggregated content will be a new part of the website experience, while geotagging and mapping functionalities will allow readers to create personalized experiences. It’s a win-win situation for the papers, which were able to create new content without actually incurring cost by hiring more reporters. “I think these create better Web products while giving people a reason to buy the premium content,” Saltz said.

Meanwhile, News Corporation, one of the biggest proponents for paid content, recently announced it would invest in Journalism Online. The Lancaster New Era and Intelligencer Journal will also use the service, but only on its obituaries – only readers from outside the paper’s circulation area will be subject to the paywall. “I think experiments like that will be interesting for a number of reasons,” said Bill Mitchell, head of entrepreneurial and international programs at the Poynter Institute, one of those reasons being that “it isolates the content for experimental purposes.” Other papers expected to go behind paywalls, not necessarily using Journalism Online, include Gannett’s Tallahassee Democrat in Florida, The Spectrum in Utah and The Greenville News in South Carolina.

Outside of the U.S., News Corp is expected to put the Sunday Times and Times of London behind paywalls starting next week. The papers, which previously shared one website, now have two dedicated sites that require readers to register before viewing content. Although the content is still free, MediaWeek reported that the two sites’ combined market share of UK Internet visits to media websites has dropped 1.81 percent since putting up the registration wall.

Mitchell believes that there must be added value to a site if a paywall is going to be successful. “The Wall Street Journal has the advantage of selling content that people believe they need in order to do their jobs. That is probably one of the strongest appeals for paid content, but there is precious little content that falls into that category,” Mitchell said. So the metered approach Journalism Online provides is significant, he noted, since publishers can decide to adjust how many clicks it takes before the paywall goes up, under a one-size-doesn’t-fit-all philosophy.

“You’re going to want to be able to turn the dial, be able to control free or paid sections of your site with the kind of flexibility Journalism Online is building,” he said. “All that said, there is no way to know which of these experiments are going to work but these are clearly experiments that need to be tried.”

Dan Frommer, deputy editor of Business Insider, doesn’t see it the same way. Although he agrees that paywalls work at news organizations that provide niche information, like the Financial Times and Wall Street Journal, paywalls in general don’t have much of a future. “It’s too easy to freely share information on the Internet to convince enough people to pay for it,” he said in an e-mail interview. “People are barely convinced to pay for music, which is much harder and costlier to share than text.”

But Saltz believes it’s a worthy endeavor and has stated publicly that he doesn’t believe the sites will lose traffic. “There’s the potential the paywall will change things, and the potential it won’t, but we should give it a try,” he said.

Mitchell shares the sentiment: “News organizations are going to try a lot of things, most of them won’t work when it comes to paid content, but I bet there will be some surprises when it comes to things that do,” he said. “I think where it will end up will be a kind of hybrid approach, where it will come to several different kinds of approaches – organized donations, partnerships with other news organizations and other universities. I think the days of relying on one or two revenue streams are primarily over.”

— Katrina M. Mendolera

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