Newspaper paywalls: Lessons learned

Posted on November 7, 2011


News sites have launched a variety of different online paywall models this year, some with more success than others. There’s no one way that works for every local market, but a few best practices are emerging for any news publisher to consider before charging for digital content.

In the last month, we’ve looked at how traffic was affected by paywalls that were launched this year, and we’ve also talked to several publishers that put up paywalls, including a few that managed to avoid major traffic damage and even improve revenue. What have these publishers learned that could help other sites considering paid content? Here are some tips.

Analyze revenue potential
Publishers should plan for some decline in traffic when they put up a paywall. However, lower traffic doesn’t have to translate to declining revenue and hasn’t for many publishers.

For instance, the Dow Jones Local Media Group launched metered paywalls in the last year in several local markets. Going in, the question for Dow Jones and most media companies is: Could it make up for declining pageviews brought about by charging for content by attracting new digital subscriptions?

Sean Polay, director of deals/mobile at the Dow Jones Local Media Group, looked at how people consumed content on the site and found “a loyal set of audience that was generating most of the traffic.” Three-fourths of visits were being generated by one-third of the audience — a group they hoped to convert to subscribers.

In the first paywalls Dow Jones put up, the company anticipated a drop in Web traffic of about 50 percent — but no major ad revenue impact thanks to an initiative to increase the sell-through rate of their advertising. “We were able to declare success because of the amount of traffic that we lost was only 30 percent, despite our allowance for 50 percent,” he said. Dow was actually able to increase revenue on display advertising, and the revenue it used to receive from remnant ads was replaced by revenue from subscriptions.

Polay said Dow is focused on converting free registrants to the site to subscriptions through email marketing campaigns. The first goal is to convert anonymous visitors to registrations and then make those registrations subscriptions.

Publishers also see the opportunity to sell advertising behind a paywall at higher rates, now that advertisers can count on a more engaged audience. Engagement metrics such as unique visitors and how much content is shared are becoming more important to advertisers anyway, noted Jason Collington, Web editor at the Tulsa World, which launched a metered paywall in March.

Research, research, research
An important lesson from Polay and other publishers is to go into the paywall decision armed with data. “We did not go in blind,” said Collington. The newspaper’s market research department (which not all newspapers are lucky enough to have, he noted) used three or four years of Omniture behavioral data to develop its metered model. “We went into this with a lot of information just like any good decision,” he said.

John Winn Miller, publisher of The Concord Monitor, which launched a metered paywall in May, also found it was important to look for the best practices from what other papers wrere doing and be rigorous about having data for every opinion.

Stay flexible
Your paywall might need some fine-tuning after it launches; like any new strategy, all the research in the world will still not make it possible to predict exactly how it will be received.

Since rolling out paywalls earlier this year, Polay said Dow Jones is still experimenting with pricing models to adopt across the company and is willing to adjust depending on the market. For instance, Polay said they added a different pricing level for Cape Cod Times (in Massachusetts) because the audience is so seasonal. For a smaller price, readers can subscribe to a “basic online” to read 50 articles a month rather than the “premium online” for unlimited access.
The Augusta Chronicle, which launched a metered paywall last December, started by offering 25 free articles a month and planned to watch the reaction from the audience while tightening the meter.

“We wanted to begin with a more liberal meter to help introduce the idea to the community and then tighten the meter as part of the strategy to ultimately charge for premium content,” said Alan English, the newspaper’s executive editor.

Invest in the content
It might sound obvious, but it can’t be overlooked: Publishers have to offer readers something worth paying for before they even think about putting up a paywall.

The Concord Monitor, for instance, rolled out a complete redesign of its website shortly before the paywall, focusing on a more usable design and better local content. The paper also only puts local copy behind the paywall, since readers can’t get that type of content elsewhere.

Miller noted that he was initially wary about reader acceptance of a paywall; after all, the statewide newspaper the Monitor competes with isn’t behind a paywall. “Typically if you’re in a competitive market you’re afraid to do anything,” he said. Largely because of the newspaper’s research and preparation, the Monitor went forward with the paywall and the newspaper is enjoying a year-over-year online revenue boost.

The Tulsa World began a local content initiative a few years ago, revving up production of unique local content so that the website is updated 80 to 90 times a day. Collington said it’s important for newspapers to start with content before putting up a paywall.

“It doesn’t matter how you want to charge your audience, you have to have the content before you can start thinking about charging,” he said. “There has to be a value there.”

Communicate with the audience
Polay said publishers should make sure they simplify the presentation of paywall options and be upfront with their readers before launch. Dow Jones ran a six-week notification campaign with online and offline messaging to readers before putting up any of its paywalls.

“We feel that helped us mitigate some of the customer service time,” he said. “We wanted to get all the negative reaction out of the way so by the time we implemented it, people said ‘oh that’s old news.'”

After launch, it’s still important to listen to the audience reaction. For instance, Polay discovered that putting obituaries completely behind a paywall was a mistake, as that aspect of the paywall received the most negative feedback. “The audience immediately was upset that they had to acquire a subscription to access obituaries,” he said. Now obituaries are part of the metered model.

Continue to tweak the model
After putting a paywall up, the work is not done. Not only are publishers monitoring how it’s working and listening to their audience to adjust, they’re also evaluating the next step to create revenue. For instance, not all publishers have figured out how mobile fits into the paywall, especially as they continue to roll out new mobile products.

Publishers are also still testing pricing models. English, from the AtlantaThe Augusta Chronicle, which launched a metered paywall last December, stressed that the strategy is still evolving and it’s too soon to judge whether paid content iniatives are working.

“Our goal is to experiment and understand the behaviors people have when they encounter paid content online and evolve our strategy based on what we learn,” he said. “We believe our content has value but we also understand that the world is filled with both free and paid content from news organizations in many different forms. We’re trying to find the right mix for our community that also brings in enough revenue to support the journalism we do.”