They say old habits die hard. Not so, apparently, when it comes to consuming news. Who picks up an actual newspaper dropped outside their front door every morning? Who watches the 6 p.m. news anymore? Most of us are online at work, every day, and can check news sites anytime. Even those not online at work have access to online news sites through their smartphones. Earlier this month, the Pew Research Centre’s biennial report on American news consumers showed that online news consumption has skyrocketed and now exceeds radio and print media, trailing only TV news. The report also noted that TV is experiencing a slow decline, while online news is rapidly ascending. Notably, the former is failing to engage younger consumers, while the latter has them captured, arguably enraptured.
What does this mean? There’s a stampede of media outlets moving away from free content. The Globe and Mail newspaper has announced a “pay wall,” followed shortly afterwards by an announcement by the Toronto Star that it will put up a pay-to-read system online in 2013. Postmedia Network Canada Corp. also has a program in place. And readers are reacting, as the Star’s Rosie DiManno wrote.
Still, it will be a struggle. My online experience running www.pgatour.com for two years as Managing Editor was that we could sell millions of dollars worth of actual hard goods, such as golf balls, golf shirts, golf clubs and other equipment, but we struggled mightily – and mostly failed – in trying to sell editorial content. There is so much free content online that users will typically go elsewhere when faced with a pay wall. In that sense pay walls can actually defeat what some consider the main purpose of an online news site, which is to attract online advertisers. If the number of eyeballs on those sites is cut dramatically, that translates into fewer people seeing online ads, and less money news sites can charge for those ads. Consider also that the economics of online still aren’t adding up. The Project for Excellence in Journalism (based on data shared by 121 private newspapers) reported last year that for every $1 newspapers earned in new digital advertising revenue, they lost $7 in print advertising revenue.
The New York Times now has almost half a million paying customers on its online site, and is beginning to tighten up access to a limited number of free stories – placing its big bet squarely on a pay model. It is considered a relative success, and is held up by advocates of pay walls. Ditto the Wall Street Journal. Not so for newspapers in smaller markets in the U.S., where on average less than 20 per cent of newspaper subscribers have flipped to an online payment system. In Canada it is still too early to evaluate outcomes.
From your perspective as a current or future FH client, what pay walls mean is a potential shift in how you reach your audience. That will cause some rethinking about how and where we want to see coverage. The old rules may no longer apply. On the other hand, today we experience the reality that serious news about serious subjects can sometimes be difficult to place. Many journalists I know argue that their media companies (in a pay wall-free world) have been trying to maximize page views online (to maximize online advertising revenues) by posting salacious stories about celebrity meltdowns, or funny videos, or the latest story on Honey Boo Boo, over “real” news. The more click-throughs a story gets, the more prominently it gets placed on the online site.
Will pay walls save media companies? Will pay walls save journalism? And if so, what will it mean for communicators? The jury is still out. Stay tuned.
Bill Walker is the general manager of Fleishman-Hillard’s Toronto office and can be contacted at Bill.firstname.lastname@example.org.