Will Pay Walls Help or Hurt Newspapers?

Some visitors to Cincinnati.com were surprised over the weekend to learn they would no longer have unlimited access to news and features on the website, due to Cincinnati Enquirer rolling out its new metered pay wall.

20 Percent of Newspapers Now Have Pay Walls

Parent company Gannett announced earlier this year that it would begin using paid-subscriber models on its 80 newspaper websites by the end of the year, joining dailies like Los Angeles Times, The Boston Globe, Minneapolis Star Tribune, Arizona Republic and The Columbus Dispatch. The New York Times raised eyebrows when it limited access to its site to paid subscribers in 2011, but now reports that the pay wall has grown circulation revenues by 8 percent through June 2012. The pay wall has also partially offset print declines, as many subscribers opt for print-and-digital packages.

The strategy of a metered pay wall is that traffic doesn’t nose dive and therefore sabotage ad revenue, which is tied to site traffic. The Gannett papers will be in line with this strategy since much of the site will still remain open and free to casual readers. The home page, section fronts, classifieds, obituaries and affiliate sites like Cars.com and HomeFinder.com will all still be accessible. And users can still read a limited number of articles before the pay wall kicks in.

Will Readers Adapt or Leave?
Will charging for online access drive readers away? After all, there is still plenty of free content available online. More and more papers are gambling that it won’t. Minneapolis Star Tribune, for instance, has reported only about a 12-percent decline in page views since it began charging for access, but the revenue from new digital subscriptions exceeds revenue lost by declining traffic — by a lot.

A Calculated Risk
Some newspaper executives have been grousing for years about giving their product away for free and say the paid-subscriber plan is less about adding digital subscribers and more about taking away reader incentives to ditch their print subscription for free online alternatives.

Let’s face it, at this point in time — with circulation and ad revenues in decline — newspapers can’t afford to play it safe. A metered pay wall strategy that can generate new circulation revenues, and maybe even re-energize the print product, is a chance worth taking.

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