Business information written specifically for newspaper advertising departments

The Pay-Wall

Does it increase revenue or drive down subscriptions?
There are many pros and cons to adding a pay-wall to your paper, and many things should also be examined when deciding to do so. Issues of local demographics, current readership and other news competition in the area will and should have an effect on if you decide to add a pay-wall to your paper.

 

For this issue’s paper spotlight, and in addition to our classified retrospective, we are examining the affect adding a pay-wall can have on your subscription revenue. Although we wont be examining a specific paper to discuss their innovative ideas, we will be taking a critical look at a common move many newspapers are making that intend to replace the lost revenue from adding a full and free version of the paper online. In the past, people would have had to pay for a single issue or monthly subscription to take advantage of your newspaper’s content, however, with information being widely available, people are using their pennies elsewhere and getting their news for free.

There are many pros and cons to adding a pay-wall to your paper, and many things should also be examined when deciding to do so. Issues of local demographics, current readership and other news competition in the area will and should have an effect on if you decide to add a pay-wall to your paper. Although many papers are corporately owned, so the choice will likely be up to those at the top of a newspaper’s corporate owner, not the local managers themselves. If you are in a position to make decisions like these for your paper, below are some things to think about when deciding to, or not to, add a pay-wall to your online paper.

Local Demographics

The behaviors and demographics of your locale or municipality are important issues to discuss of you’re thinking about a pay-wall. If you live in a more urban area where the majority of your residents read the news on their smartphones, or at the office desks, you are likely to have a more engaged online population. In this case, adding a pay-wall will allow those most engaged with online news sources to continue to receive their news for you, with a subscription. On the other hand, these users are also likely to be Internet savvy, and may also navigate their news reading to another free source.

The pros and cons of this group are likely even. While this group is possibly more affluent than groups in other areas, and thus consider a pay-wall a small and convenient expense, you may also lose readers to free news sources. If you decide to add a pay-wall to your paper, think about ways to keep readers from this demographic by targeting deals towards web savvy urbanites.

Some areas, especially rural ones, will still have communities that get their news from either small local papers, or larger regional ones. These communities may not have universal Internet connections, and will likely desire and need a consistent and comprehensive news source. In this type of community, a pay-wall will probably function much more effectively — without loss of subscribers — as community members will be concerned with both local and national events, as well as want to take advantage of nearby offers and deals.

The pros and cons of this group will likely throw that scales in favor of a pay-wall. Since members of this group depend on access to their local news source, they will probably continue to subscribe to either your online or physical paper version of the news.

If you want to make the deal sweeter, think about some incentives to subscribers, like a discount on listing classified ads for goods and services.

Current Readership

Along with local demographics, current readership is another important issue to look at before deciding to add a pay-wall. Do your current readers already subscribe to a paper version of the paper? Or do you monitor your online readership with page views and IP addresses? If you have a consistent online readership base, you can add a survey to your paper’s home page to ask if they would consider paying for an online subscription, or would they find their news elsewhere.

You could also consider making local content exclusive, while leaving national and world news often to the public for free. Since this information can be found virtually anywhere, allowing it to remain free on your website, will keep your readership up, even if your readers don’t want to pay for exclusive, local content.

Like with urban demographics, the pros and cons with this group are about equal. However, this group will probably be more concerned with being engaged with an open discussion, than a top down decision. They’re already your readers, so they’re also likely engaged in the community. Make them part of the decision, and the odds will probably swing to your favor.

News Competition

What are the other news sources in your area? Yes, the Internet is everywhere, which means that there is effectively way for any news source to really dominate an area. It is important though to look at your local and national competition to help determine is a pay-wall is going to help or hurt your paper. Urban areas often have many different news sources for both the metro area as a whole, as well as small pocket communities. Where does your paper stand against these other sources? If you are competitive, and have a pretty robust readership in comparison to other sources, you may want to reconsider adding a pay-wall. Doing so could drive your readers to other news sources that don’t. Instead, be grateful for robust readership, and thy to boost revenue in other ways.

If your competitors all have pay-walls, you can throw caution to the wind, since you’ll likely pick up readers that other papers lost. Try to keep your subscription rate a little lower than other papers, however; people love a deal.

Rural areas will have less direct competition, but your paper is still competing with Internet news blogs and free online papers like USA Today. If you can offer a ton of locally relevant information, though, you’ll keep your readers eyes glued to your paper.

Deciding to add a pay-wall — when it’s actually your decision to do so — can be intimidating because you will have to inevitably weigh current readership revenue with the possibility of losing revenue. Make sure that when taking this important step to add dollars to your paper, that you don’t make any rash decisions, and carefully balance the pros and cons of each argument. Look at whatever metrics you can about your local demographics, current readership and other area competition, so you can make an informed and wise decision about your online paper. If you can, take the advice of your readers, since they will be the ones paying to read your paper.