Meanwhile, a stat that should alarm publishers and paywall advocates is the low, low conversion rate of unique visitors to paid subscribers. Here are stats provided by Ken Doctor: “The New York Times broke the 1-percent barrier last year, 390,000 subs compared to 33 million U.S. unique visitors. The Commercial Appeal is at .8 percent; The Star Tribune is at .25 percent with its four-month initiative. The Columbia Tribune is at .2 percent.”
There is just no clear evidence so far to indicate that paywalls—even for the most successful general-circulation paper, The New York Times—are doing anything to help stop the bleeding. Newspapers continue to pile up losses while putting their hope in a savior that shows no evidence of being able to work miracles.
Metered paywalls—the fad paywall of the moment—set a limit on the number of stories (10 or 20) one person using one browser on one computer can access in a month. Typically, coming to an article from a third-party link, such as a tweet, Facebook status update, Google News search, or blog post, does not count against your monthly quota.
Following the @nytimes account on Twitter, as 5.2 million people do, is just one way to avoid the paywall. Another route: Use multiple browsers. Since the metered paywall is cookie-based, and each browser keeps its own cookies, every time you access a metered site from a different browser, the quota counter resets to zero. If you install Firefox, Safari, Internet Explorer, Chrome, and Opera on your Mac, for example, you’ve upped your New York Times quota to 50 stories a month.
If you own an iPad and an iPhone, that’s 20 more stories per month. If you have a home computer and a work computer, that’s 20 more. Does your spouse have a computer and do you share it? Ten more stories.
Of course, you don’t need to hog that much hard-drive space or own all those devices. It’s an easy matter to wipe your cookies from your browser settings and start over. There are now third-party apps that will automate this process for you.
This isn’t an argument for defeating the New York Times paywall or any other metered site, simply evidence of how easy it is to defeat if for someone who didn’t want to pay for news.
Supposedly, for this porous metered system, The New York Times paid $25 million.
I’ve not been able to come up with any information on what Press+ charges. At a minimum, we can assume the company takes a cut of every subscriber payment, and vendors of this scope also typically charge a substantial implementation fee.
So when newspaper X says it has 25,000 subscribers at $10 per month, that isn’t $250,000 in pure newsroom-sustaining revenue. It cost the company a sum of money to acquire and keep those subscribers.
And, of course, there’s marketing. Supposedly, the Dallas Morning News is spending $4 million annually to market its paywall. If newspapers aren’t marketing their paywalls, they will convert a lot fewer people into subscribers.
I worked my way through college telemarking for the Los Angeles Times and the San Diego Business Journal. Every large newspaper I’ve ever been associated with either had telemarketers or outside sales teams trying to find new subscribers. Circulation directors also spent a lot of money on direct mail, billboards, radio, and television.
As much as circulation directors want to increase the number of subscribers to their products, the truth is, they do well to just keep replenishing the leaky bucket with sand. It’s a constant battle against churn.
The cost of gaining a new subscribers involves marketing, a sales-rep commission, salary for the manager, and the discount offered to the new subscriber “just for trying” the paper. Once the subscriber is acquired comes the expense of retention—more marketing, more incentives.
The subscriber business is an expensive business.
Why do paywall advocates think it will be any different online? There simply isn’t going to be that much profit left over from subscription fees to generate any substantial change in the fiscal outlook for newsrooms.