The coming of paywalls to N.C. journalism

Update below.

The News & Observer has announced that it is instituting a paywall on Dec. 19. It’s no surprise; expect the Charlotte Observer to do the same. (Here’s why.)

The N&O — as with other McClatchy papers — is bundling a price increase for subscribers, too. “The cost of renewing a subscription will include the digital package, and will amount to an increase of $2.46 every four weeks or $32 a year.”

For people interested in state government, this will be a blow, particularly for those of us who can’t get home delivery of the paper. We can subscribe to the digital edition for $69.95 annually, which seems a bargain. Still, I’ll be surprised if they don’t lose a lot of traffic. (I also expect this to be a boon to the N&O primarily competitor, WRAL.)
As soon as Charlotte establishes its paywall, visitors to the websites of the three largest papers in the state will have limited access to the papers’ journalism. Greensboro doesn’t have a paywall, but it doesn’t provide links to all of its content. Case in point, this wonderful story by Susan Ladd sends visitors to the subscription-based e-edition.
I’m not opposed to paywalls. I know better than most that good journalism costs money and must be supported with money. But paywalls have always seemed short-sighted to me. The newspaper industry has trained people that content is available online. I know. I was part of it and an advocate for posting everything online. And why not? I’m a journalist. I want journalism to be spread far and wide.
Now, of course, it is going to be difficult — impossible, I think — to train people to pay for it. It’s possible, if the papers add the bonus of relevant, unique content behind the paywall. That’s not mentioned in the N&O’s announcement. And if it’s not there, then subscribers are simply now paying for something they have gotten for free for years. It will be a hard sell.
I expect that papers will get a short-term revenue pop. They’re bundling it with the newsprint subscription AND they’ll get some new online only subscribers. But it won’t last that long. But after that, the people who will pay are not coming along. I’ve now asked three different classes of college students whether they would ever pay for news content. Very few say they will. And they aren’t now, unless required to by a professor. (Likely a cost borne by parents.)
Paywalls are working, though, with one group: investors.
I love newspapers and their journalism and pray for their success. I hope that while the paywalls are in effect, that corporate leaders are figuring out the longer-term strategy for financial survival. A generation is coming up — one is actually already here — that is not going to pay $70 a year for content that is likely free a few clicks away.
Other smarter takes here, here, here and here.
Update: Mashable looks at the paywall trend with an insightful post.As you’ll see in the infographic (presented by bestcollegesonline.org), some papers lost large percentages when switching over to paywalls — upwards of a third of their website traffic. Counterintuitively, others did much better. And, some sites have failed miserably when attempting to charge for their content.”
(Thanks to Dioni Wise for the pointer.)

8 thoughts on “The coming of paywalls to N.C. journalism

  1. Having seen the news industry from the corporate side for 11 years, I can tell you that you shouldn’t bank on investors being wild about anything. In 2001, they were positively nuts for “convergence” of TV and print, and soon Media General’s stock was over $70 a share (it’s currently barely above $4). Within a few years, Wall Street shifted its focus to online, then video, then social, but revenue kept dropping, so stocks kept going down. Each time the analysts shift, the message from the executive suites moves with it but pretends it’s a steady trajectory, like the subtitle of Stephen Colbert’s book, “Re-becoming the greatness we never weren’t.” Or, to borrow from older literature, “We’ve always been at war with Eastasia.” Now it’s paywalls, because there’s an actual return on them, and the analysts are out of ideas anyway. Whatever the analysts think is the future, the publicly held media companies rush to embrace. But just wait: As soon as the number of online subscribers plateaus, and especially once the new revenue coming in from paywalls fails to offset declines in everything else, Wall Street will deem them irrelevant and an obstacle to building audience and influence — that will be the new thing. Then all the places that walled off their content will have to figure out how to rebuild their audience.

  2. I’ve been at this for almost 20 years. I’ve observed individual outlets achieve some success for some periods of time with paywalls, or some other variations of non-free content. (The $5-a-month TotalkFark section of Fark.com comes to mind.) But there are only three kinds of content that consistently have generated profits via paywall: sophisticated investment advice; gambling info; and pr0n. (And say what you want about the morality of pr0n; the industry led the way in advances in secure online financial transactions.)

    Obviously, the solution for news outlets that want to put their stuff behind paywalls and still get readership and be profitable is to put one or all of those categories of information behind the paywall with it. It would have to be quality stuff, of course, but I tihnk it could work.*

    *Yes, I’m kidding. But not completely.

  3. This would be fine if the N&O hadn’t pulled back so sharply on local reporting. I take home delivery of the N&O, primarily on principle (support your local paper), but when you turn the pages and count, there are maybe 6, at most 10 locally written stories in the A & B sections daily (I’m not really a sports fan). The rest is wire copy available elsewhere.

    If there were still robust coverage of Raleigh, the surrounding communities, strong beat reporting (um, what happened to those 5 health beat reporters they employed in 2005?), the new paywall rates would be a bargain. Without all that…

    And Andy, I’m with you, McClatchy should offer a package for their two big papers in the state.

  4. Interesting discussion.

    The N&O / CO combo is a good idea … reporting seems to be 50% redundant. But I wouldn’t subscribe to either given the quality of the local reporting. Political coverage is also lame, and editorial positions even worse.

    I subscribed to the N&O for 20+ years before the McClatchy takeover and really hated to cancel … but the value just isn’t there.

    The paywall may very well be for good short term profits, but as you suggest, it’s a losing strategy in the long term. In my view, it will only feed the downward spiral that started when the entire newspaper industry let the genie out of the bottle early on. Unfortunately for the profession, there’s no going back.

    I still subscribe to the NY Times (daily) and use it as my main source of news. Behind that is WRAL-TV. The combination of Laura Leslie and Mark Binker gave them a huge boost in my view … and a big loss for WUNC and GNR. I see WRAL as the net winner in all these paywall wars, a position strengthened by their best-in-state political coverage.

  5. Actually that infographic is anything but insightful. It is SLICK but shockingly bad. It’s references are several years old and most of the data including the number of paywall papers Lee and Gannett are way off, as is the revenue at the NYT. It implies that the NYT paywall is barely matching the online ads revs lost from the paywall- an out and out lie. It is really quite stupid.

  6. Pingback: Erecting a paywall? Make sure everything behind it is better than before | Media, disrupted

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