Missing the Paywall Point

What do the Irish News and the Guardian teach us about paywalls?

The Guardian’s Roy Greenslade thinks we should take a lesson about paywalls from the Irish News, a 45,000-circulation daily that charges (a lot) to access its work on the Web.

If you click on the Irish News website up comes a page demanding that you pay for access to a digital edition. There is a choice: £5 for one week’s editions, £15 for a month’s and £150 for a year’s.

The result? According to journalism.co.uk, since its launch in December 2009, the News’s site has secured just 1,215 paid subscriptions: 525 weekly, 370 monthly and 320 yearly.

In other words, whatever positive gloss one tries to put on those figures, they are pretty pathetic. They are miniscule when compared to the print sales, representing a tiny fraction of the paper’s total readership.

Yes, those are awfully small. But Greenslade would have you think that digital revenue is the point of the paywall and so the dearth of it means it’s a failure. That’s not necessarily true.

Look to the Irish News itself for why it put up the wall (emphasis mine):

“When the paper was available for free, apart from the cost of running the website, we were losing readers of the paid for paper to the free online model, which was economic madness. Now readers have a clear and equitable choice, pay for a printed newspaper or pay for the same paper online,” Liam McMullen, systems and resource manager, told Journalism.co.uk.

So, what the Irish News is doing is trying to shore up its print edition—you know, the one that brings in almost all the revenue—by not giving it away for free online. Which makes sense. Giving its stuff away and accelerating its demise while hoping that the magic Internet fairy comes up with a business model does not.

Does the preserve-print-circulation strategy work? Despite the collapse of the Irish economy, the News’s circulation declined just 4 percent from a year ago, as Greenslade notes. The all-free Guardian’s, by contrast, plunged 16 percent.

That doesn’t much matter if the News’s print edition doesn’t make money, and I don’t know if the Irish News is profitable or not (I’ve got a question out to the paper and will update if they reply). (UPDATE: The Irish News tells me that they are indeed profitable, but they don’t release specific figures.)

But I do know the last number I can find for the anti-paywall Guardian’s profit-and-loss statements had the paper (and Sunday sister) losing about $150,000 a day—$52 million a year. And it has one of the most widely-read news websites in the world.

I don’t favor an all-or-nothing paywall (I think the Journal’s leaky-paywall strategy is the best—or should I say: least worst—option). But if you’re going to draw lessons from one, you’ve got to look at the whole revenue picture, not a sliver of it.

Digital is the future, we all know. But the future doesn’t much matter if you die first.

Further Reading:

Newspaper Readers Buy Papers For the Content: You’d think that would be obvious. Plus, the Walter E. Hussman Jr. Theorem.

Ad Age Shows Paywalls Preserving Print Circulation.

The Chasm Between the Value of Print and Web Readers: A person buying the paper brings twenty times the revenue of an online reader.

Loyal Readers and Junk Traffic: The bottom 75 percent of newspaper Web visitors provide just 14 percent of page views.

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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 rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.