Her conclusions, which were reported in March 2009 by the Newspaper Association of America, essentially boiled down to this: once a newspaper put all its content behind a paywall, online subscriptions dropped dramatically and those subscriptions did not come close to making up lost advertising revenue. The advertising projections, she explains, were based on “very conservative,” pre-recession numbers. “It’s hard to say that putting in a paid model for content would pay on its own,” she says.
But her results were not all that encouraging for the free-content crowd, either—those who advocate an advertising-only model despite the fact that revenue for online ads, though rising, is a fraction of what it is for print.
The online scenario that worked best, she concluded, was a compromise—combining free and paid content, at a percentage of 80 to 20, free to paid. But, she cautions, “there has to be something that people are willing to pay for.”
Could that “something” be local news? Wang built her analysis on numbers from the NAA, the media buyers AdPerfect and Centro, as well as from Borrell Associates, a Virginia consulting firm whose president, Gordon Borrell, had for years preached that publishers were wrong if they continued to believe that local news as currently constituted would sell.
Borrell had begun his career as a reporter for The Virginian-Pilot, and so came to his conclusion with an understanding and empathy for the work reporters do. The problem, as he saw it, was that newspapers assumed they could continue to sell what he regarded as a tired and tedious product in a new medium simply because they had done so well selling it in an old one.
Borrell had issued his first comprehensive study on paid content shortly after the 9/11 attacks, a time when the public was devouring news, and so a moment when the prospect of online revenue would be running high. He surveyed nearly 1,900 online-newspaper readers and discovered that while people were willing to register for sites—a necessity in attracting advertisers—and might be willing to pay for some news, they were not about to start paying for general online news they had become accustomed to getting for free. He had thought at the time that they might, one day.
But now, eight years later, he saw no evidence of that happening. Readers simply did not value local news enough to pay for it. Borrell found only about 12 percent of most markets went to the Web for local news.
They still bought newspapers, though in diminishing numbers, and quite often not with the same imperative that drove Borrell’s one-time newsroom colleagues. While journalists envision people tossing out the coupons to get to the news, many readers perform the ritual in reverse—tossing the news to get to the coupons, a practice confirmed by an NAA study that found that fully half of all readers bought local papers for the ads. Such, Borrell concluded, was the fate of a product that, in the eyes of its intended audience, was “not that compelling.”
But wait. Hadn’t the industry been pinning its hopes for well over a generation on local news, on bringing to suburban readers targeted versions of the traditional mix of local politics, cops, fires, courts, and the occasional strange doings that used to fill the big-city papers that everyone in town read? And hadn’t the mix grown to include dispatches on schools and zoning and features of local interest? And hadn’t some of that work been of consequence, hadn’t it won awards and allowed publishers to speak of their “watchdog” role and to suggest, channeling Jefferson, that their work kept the citizenry informed and enlightened? Not that compelling?
Or did Borrell have a point? Was it possible that the self-satisfaction with which news organizations regarded themselves and their role had been undermined and diluted? The news purists had been warning for years of the danger of a culture in which publishers cheapened the value of their content with cutbacks intended to satisfy investors and media analysts. But no one had paid them much mind, because even in a diminished state the product still sold. If you could do it on the cheap, why not?