My thoughts on newspaper paywalls

Online newspaper paywalls were a subject I found interesting in May 2012. I thought the newspapers had reason to try charging, but as a reader I also wanted a solution suited to my wide-ranging media consumption.

Online newspaper paywalls needed testing in practice

I was sceptical about merely asking people whether they’d pay for something they’d previously had for free. I wanted to see what they actually did once charging began.

I imagined a gradual model with some free articles and payment after that. That way, I thought newspapers could test prices and access and see how readers responded.

I considered both subscribers and occasional readers

I thought paying subscribers might find it unfair if others got the same content for free. That was my interpretation of a possible problem, not a measurement of subscribers’ reasons for staying or leaving.

I read articles from many newspapers myself. I found them through Twitter, among other places, and preferred to avoid managing a separate subscription with each publisher.

One subscription across publications was my preferred idea

I’d read a proposal to bring access together, a little like a shared music subscription service. I couldn’t remember the author’s name, but thought the idea made sense from my own perspective as a consumer.

I imagined dividing the payment according to what people read. I also said I didn’t have a full grasp of all the practical and competition-related issues.

My prices, proportions of readers and expectations in the video are examples and guesses from 2012. They don’t describe online newspapers’ current subscriptions or documented results.

Yes, I’d try online newspaper paywalls too

There’s lots of debate about paywalls, which several newspapers apparently want to introduce at roughly the same time. I start the video with a sarcastic remark about the Danish Competition Authority. I’m also outraged that commercial media companies receive taxpayers’ money while foreign owners can take money out of the business. I mention Mecom in England and Bonnier in Sweden.

But that isn’t really what I want to discuss here. Looking at it purely as a business, would I introduce payment if I were behind Berlingske, Politiken, Jyllands-Posten, Ekstra Bladet or BT? My answer is an unqualified yes.

I don’t believe the prophets of doom saying everyone will simply go to the BBC or Danmarks Radio instead. In the long run, I expect many will end up paying. That’s my assessment in May 2012.

Don’t just ask people whether they’ll pay for something free

I think many surveys approach the question wrongly. If you ask whether people want to pay zero, DKK 25 or DKK 50 a month for something they’ve had for free, naturally they answer zero. They hope their answer will persuade the provider to keep it free.

So I think those questions can be useless. What’s interesting is behaviour when charging actually begins. You need to get started and see what happens. You’ll find more of my experiences of building a business in Iværksætter til jeg dør.

I expect newspapers will gradually restrict much more of their content. I even say that in a few years you won’t be able to read a single article at Politiken or Berlingske without paying somehow. That’s my very confident prediction back then, not an account of the later outcome.

Start with 20 free articles and watch the response

I think the gradual model Politiken seems to be considering is smart. Instead of shutting the lid completely at once, you can start with some free articles. I use the image of boiling a frog slowly: A sudden change can trigger anger and protest, while small changes can get people used to paying.

Let’s assume there are 20 free articles a month. I guess perhaps 95 per cent of readers wouldn’t reach the limit at all, while the five per cent most avid readers might also be the most willing to pay. Those are illustrative calculations, not measured proportions.

I shop around between media myself. I come across a Politiken article on Twitter, read something at Berlingske and drop by Børsen. Others find things through RSS and Facebook. I imagine many have that habit rather than only reading one newspaper.

Subscribers may feel they’re paying for the freeloaders

There’s also a sense of fairness. I start with a subscription costing around DKK 4,000 a year. Why should a subscriber pay if everyone else gets the content free on a good digital platform? I say the newspapers have pissed on their subscribers that way.

Perhaps some stop subscribing even though they like the newspaper and actually think the product is worth the money. What they dislike is the feeling of paying for those who contribute nothing.

I describe an experiment with two people and some money, but admit I don’t remember exactly how it was conducted. Imagine one person gets DKK 100 and can propose splitting it 50–50. If instead they propose DKK 80 for themselves and DKK 20 for the other person, the other can reject it so neither gets anything.

The fascinating thing is that people can turn down DKK 20 they wouldn’t otherwise have had to prevent an unfair distribution. I use the story to explain my thought about subscribers’ reactions. I don’t give a precise reference for the experiment.

I also draw a political parallel with the Karina debate of the time. I retell the outrage over someone receiving around DKK 16,000 a month while also being described as poor. I use the image of a new leather sofa as part of my polemic. That’s my portrayal in the 2012 debate, not evidence of that particular person’s finances or purchases.

The point is that people may react less to the size of the amount than to whether the distribution feels fair. So I imagine paywalls might also bring some core readers back. That won’t necessarily solve print newspapers’ decline, but might slow it.

Prices, article limits and advertising can be adjusted

I guess an initial payment model might cost Politiken three or four per cent of its readers or page views and provide a little new income. In my assessment, DKK 25, DKK 50 or DKK 100 a month from a few readers is peanuts for a big media company. In my polemical comparison, a couple of million a year amounts to a few expensive advertising salespeople.

But the intention may be to tighten the screw and learn from the response. First 20 free articles, then 18, perhaps ten later. At the same time, the price might rise slightly, for instance from DKK 25 to DKK 27 a month.

If you lose too many readers, you can go back to 15 articles and add extra ads to some of them. I mention a video ad for Danske Bank as a hypothetical example of something you have to watch before gaining access. There are lots of controls to adjust.

I expect they’ll try to get as many paying readers as possible while keeping as many eyes as possible for advertisers. And I think it can work.

A Spotify for newspapers would suit me better

I’ve read a very clever blog post with a proposal I agree with. Unfortunately, I can’t remember the author’s name. At the time, I pointed to one of the people I’d just started following on Twitter so others could find him.

The idea was for newspapers to join forces on something like Spotify. I don’t want to pay DKK 25 to Politiken, DKK 30 to Berlingske and DKK 20 to Børsen and manage all those little agreements. It’s too much hassle.

As a consumer, though, I could imagine paying DKK 100 or DKK 200 a month for unlimited access across publications. The money could be divided according to usage. If 30 per cent of my reading came from Berlingske, they could get 30 per cent of the payment, put simply.

I don’t know what the competition authorities would say or whether there are other problems I can’t foresee. I’m looking at the idea from the consumer’s side.

I’m a media consumer, not just one newspaper’s reader

It annoys me when a link from Twitter or an RSS feed lands on half an article at Børsen or a locked page at the New York Times. I also mention LinkedIn’s attempts to get users onto a professional profile. I know the irritation is intended to make me pay.

But I’m interested in many different things. I listen to P1 in the morning, perhaps P3 or P4 on the way home. I read Berlingske, Jyllands-Posten and Børsen. Sometimes I drop into BT to read a crazy story too, even though I poke a little fun at myself for it. I’m no better than most.

I want to pay fewer organisations, not twenty different ones. So I think newspapers should listen to the blogger’s proposal. Perhaps you can get people to pay DKK 199 a month for one combined subscription.

That still won’t rescue all the media companies’ finances. Around DKK 2,400 a year divided between many publishers is different from the DKK 4,000 one newspaper previously got from a subscriber. Something needs to happen with costs too.

Newspapers need to run a business like other companies

I’m harsh about media companies’ self-image. I criticise expensive addresses near Kongens Nytorv and Rådhuspladsen, taxis, high salaries, long holidays and other perks. Those are my broad, polemical descriptions, not an examination of every media company’s accounts.

It outrages me if the fourth estate sees itself as above ordinary business realities and expects the state to pay. I admit to feeling a touch of pleasure that reality is now catching up with newspapers too.

A newspaper is a fucking business, I say. At SPAMfighter, we’re not protected from competition on the world market either. I caricature a Chinese company with extremely low costs that can sell software for DKK 0.25, while I might need to charge $20 to make a business of it. It’s an imagined illustration of the competition independent businesses live with.

I also compare it with booksellers’ old argument that without their monopoly and around 40 per cent margin, authors would starve. I challenge that story and joke that some booksellers might just have to eat less caviar. My final point is that the debate also concerns profit and owners’ interests, not just protecting democracy.

Also read about the difference between free access and a paying audience.

Is it a good idea, how will it go, what’s their strategy… I’ll get into all of that, with a little "colourful language" thrown in 🙂 Best wishes, Martin