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.
The fact that paywalls are porous will only make the job of acquisition and retention that much more expensive.
Simon is dismissive of the notion that the journalism itself has always been essentially free, writing: “But ‘readers never paid for the news’ is simply and utterly wrong. Until the Internet, they always paid for news. And pay for it they did, sometimes at a newsstand, sometimes on Sundays, sometimes weekly. But we all paid.”
As for who paid what for print news, in a survey last year, 85 percent of newspaper subscribers said they bought the paper for local news. That means 15 percent of the buyers didn’t care about local news. In the same survey, 67 percent said they wanted coupons in their newspaper, meaning for some percentage of people local news isn’t enough. Obituaries—not exactly the kind of high-end journalism Simon champions—is also another big reason people subscribe to a newspaper. Then there are sports, classifieds (always a big driver of readership), and Dear Abby (or the ilk).
A newspaper has always been a package, and that’s how it derived its economic value. If all a newspaper has is local news, it might woo droves of readers, but arguably not enough to make the newspaper profitable able to pay professional salaries to a lot of professional staff.
Paywall schemes disaggregate content and remove it from its traditional package. That diminishes the value of the subscription.
The need for a bundle to enhance the value of the subscription is a problem for paywall advocates. The financial truth of the matter is that a paywall reduces the subscription exchange to a single, discreet asset: news stories. There is just no evidence in the history of American journalism that a critical mass of readers will pay a substantial fee for just news articles.
As one of my heroes, Walter Lippman, pointed out in 1920, “Nobody thinks for a moment that he ought to pay for his newspaper.”