The News Limited paywall dilemma: how to avoid competing against yourself
Monash University’s Stephen King argues in a post first published on The Conversation that News Limited is betting on a future where its paywalled content does not originate from its print products.
You could almost feel sorry for newspaper owners. The internet is smashing their hard copy advertising revenue and they have yet to work out how to make money out of their online editions.
It is just over a year since News Limited moved its Melbourne Herald Sun tabloid to a “metered” online paywall model. Now News Limited has announced that the Herald Sun, together with Sydney’s Daily Telegraph, will be moving to a different pricing model later this month.
Interpreting the move
At first glance, it looks like the “freemium” model – where some articles are free to all readers and other articles are locked and available to subscribers only – has failed. Indeed, as more newspapers around the world move to a metered model, it could be argued that the industry is converging on a “winning” pricing strategy for the internet.
the ”local masthead” brand you and the PR talk about refers to community newspapers. Speaking only as a observer, expecting everyone in Sydney (to use an an example) to embrace the digital medium is Jurrasic logic (dinosaur looks up in the sky, sees a bright light, thinks nothing of it then … dead!!) The more blue collar the suburb is, the less likely they are to embrace a costly online model of reading the news (especially news that they don’t care about!). When people moan and fuss about their power bills, food bills, mortgage bills, school bills — do you think they will want to pay for a spanking new $900 ipad?
Metered paywalls will become the norm, yet after monitoring this for a while, I believe that it has issues. The simple fact is that mastheads are reaching out to a much wider audience than their traditional print circulation, you only need to look at the WSJ and New York Times to gain an awareness of their extended reach.
There is an issue with this metered model, and that is simply balancing their pricing model with the propensity of their wider audience demanding news from many sources. The price:demand ratio will come into play sooner than they think, and with ~20% or so of the world’s mastheads participating in a metered paywall offering, how substitution and loyalty will play out will be very interesting.