The newspaper industry is shifting from traditional print models to digital as the internet changes how news is consumed and distributed. Newspapers now face declining print circulation and advertising revenue. As a result, newspapers are moving online and implementing paywalls to charge for digital content access. The New York Times has found success with its soft paywall, gaining over 640,000 paying digital subscribers. However, paywalls still have loopholes that limit their effectiveness as a long-term business solution for newspapers in the digital age. The future of the newspaper industry remains uncertain as it continues navigating this digital transition.
2. Focus
How the business model has changed
Why the business model has change
The internet
Paywalls
The New York Times
3. Background
1702 – the first English daily newspaper was published
called The Daily Courant
1830 – number of newspapers published in the US is 715
1856 – first full newspaper ad published in the New York
Ledger
1870 – 5091 newspapers published in the US
Early 20th century - radio and TV news became more
influential
4. Background continued
1933 – war between newspaper and radio industries –
American newspapers try to stop radio broadcasts
delivering news – unsuccessful
1954 – more radios than newspapers
1967 – digital production processes of
newspapers, including use of early computers
2007 – 1456 Daily Newspapers in the United States
2009 – worst year in print advertising revenue – big shift
with newspapers moving to online
5. Very basic newspaper business model of
old
Journalists employed to find and write-up stories –
outgoing
Papers sent to print – outgoing
Newspapers advertised – outgoing
Copy sales revenue – retail and subscription
- incoming
Display and classified ads - incoming
7. Problems the old business model faces
Increased competition from other formats – radio &
TV – still have many viewers/listeners
Economic recession – double dip since 2008, not
much investment, people not willing to spend
Broadband subscription increasing – June 2012 –
estimated population of the US 348,280,154 – of
this, there were 273,785,413 internet users
Hard to find exclusive stories – news breaks out on
social media
8. Internet competition – the big one
News is available everywhere – big corporations like
Microsoft and AOL now provide news, for free.
Blogs provide specific news to audiences
Example – TMZ broke the news of Michael Jackson’s
death
http://www.tmz.com/2009/06/25/michael-jackson-
dies-death-dead-cardiac-arrest/
9. Switch to online
Online is becoming the format to read news
Online magazines are constantly been set up, as
well as iPad and other tablet and mobile devices –
The Daily (later pulled)
In the US, 65% of people aged 18-29 get their news
from the internet
28% of people from the UK and US access news via
their mobile every week
10. Switch to digital continued…
The shift is taking place at different rates – varying
business ideas and models – US far quicker to
embrace and share content than UK
Moving online can build greater online audiences
and can use cookies to target content and
advertising
11. The problem with the internet
Most readers spend far less time online – larger
audience does not mean larger revenue generation
from advertising
Difficult to cash in on innovation
12. Why don’t audiences pay for content?
People don’t want to pay for content on the
internet – nothing physical, hard to adjust
In the UK – only 4% of people said they would be
willing to pay for their news website
The news will always be accessible somewhere else
for free
People in the US are far more willing to pay –
again, different speed of shift
13. Paywall
What are they?
Hard paywalls – The Times (UK) / Wall Street
Journal
Combination – The Boston Globe
Soft – The New York Times, Financial Times
14. Does it work?
The Times (UK) and Wall Street Journal both very
secretive
NRS Padd survey found that The Times have nearly
8 million print followers but only 675,000 online
readers
The Times often makes things free for big events –
e.g. Queens Jubilee
Financial Times fairly successful - first half of 2012 –
more people paying for digital than print
15. Case Study - New York Times
Founded in 1851
America’s most popular newspaper site
Largest local metropolitan newspaper in the United
States and third largest newspaper overall
First implemented the ‘TimesSelect’ subscription
program back in 2005 – similar to paywall
17. The New Paywall
Implemented soft-paywall strategy in March 2011
Allows visitors to access 10 articles per month
before prompting them to subscribe
Their success far exceeded people’s expectations
Have reached 640,000 paying subscribers recently
18. The New Paywall
The company is expected to make more money
from subscriptions that from advertising
Douglas Arthur, analyst with Evercore Partners
estimates total subscription sales will top $768.3
million this year ($52 mil. More than advertising.)
19. The New Paywall
Barclays analyst Kannan Venkateshwar estimates that the paper will have more digital
than print subscribers in a few years
20. Underlying Problems with Paywall
“When we launched our digital subscription plan we
knew there were loopholes to access our content beyond
the allotted numbers of articles each month. We have
made some adjustments and will continue to make
adjustments to optimize the gateway by implementing
technical security solutions to prohibit abuse and protect
the value of our content” – NYT cooperate
communications Vice President Eileen Murphy (Feb.
12, 2013)
There are still plenty of ways to avoid paywall (Google
chrome incognito mode, Firefox Private
Browsing, clearing cache etc.)
21. The New York Times conclusion
Although the paywall for The New York Times
seems to be working, we feel that it is only a short
term solution
The New York Times also has a long way to go to
close all loopholes in order to increase growth and
revenue on its website
22. The future…
The shifting model leaves uncertainty for
Newspapers and their future
http://www.telegraph.co.uk/finance/newsbysector/
mediatechnologyandtelecoms/media/9614953/Gua
rdian-seriously-discussing-end-to-print-edition.html
23. What the theorists say?
“By understanding identity and the relevant
relationships, journalists can create a platform for
their work that will have a meaningful impact in the
Web 2.0 era.” – Rachel Davis Mersey
“"Fifteen years after the commercial debut of the
Internet, publishers on average still depend on print
advertising and circulation for 90 percent of their
revenues. Stop the presses and newspaper
companies are out of business. It's just that simple.”
- Alan Mutter