Ad Age Shows Paywalls Preserving Print Circulation

Advertising Age looks at small-paper paywalls and finds that they’re having some success—at least in staving off print declines.

I’ve argued that newspapers have got to charge online one way or another (I favor The Wall Street Journal’s hybrid approach) to try to preserve lucrative print circulation, something Walter Hussman of the Arkansas Democrat-Gazette has been preaching for many years. The argument is that it makes no sense to give away one product that makes you less money and charge for another that makes you more. To top it off, newspapers have, bizarrely, made their free product, the one that loses them tons of money, better and more comprehensive than the one they charge for. You can’t get video, say, on your newsprint Des Moines Register.

Indeed, Hussman’s Democrat-Gazette, a major metro paper that charges six bucks a month, saw its circulation skyrocket over the last six months. Okay, it only went up 2.7 percent, but in newspaper-land these days, that counts as something of a quantum leap.

Would its circ have risen if its Web site had been free? That’s a “no.” Hussman has some innate advantages, but they have been overemphasized by pay critics. His paper was up while his peers were down another 8.7 percent.

It’s also worth noting that the only other big paper to post a circulation increase is The Wall Street Journal, which charges online, on mobile, and on iPad/Kindle.

Nat Ives focuses on smaller papers like the Norwalk Reflector, El-Dorado News-Times, Lima News, and the Key West Citizen, which saw circulation gains or declines that were slower than their peers’. For instance:

Ohio’s Norwalk Reflector reported a 2% increase in Monday-through-Saturday paid circulation, to 8,898 in the six months ending in March from 8,722 in the six months a year earlier. That total includes 497 online-only subscriptions, up from 242 a year earlier.

Since February 2008, the Reflector has been restricting full online access to print subscribers who can currently sign up for $124.80 per year, or online-only subscribers who can currently sign up for $34.95 per year. Back then, the Reflector had been reporting circulation declines, a 3% drop to 8,866 for the six months ending in March 2008.

It’s true that some of the recent circulation growth has come from cheaper online-only subscriptions, and that print advertising remains the most lucrative revenue stream for newspapers, but the Reflector’s print base might be smaller still without the wall. “We absolutely believe our print circulation would be lower if we were providing full, free access online,” said Andrew Prutsok, its publisher. “I couldn’t say how much.”

This is, of course, not a panacea. AdAge reports that the Valley Morning Star took down its paywall in April after less than a year. But it’s clear that there’s some yet-to-be-quantified benefit to print circulation from a Web paywall.

And print is still far and away the dominant revenue source for newspapers.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.