Once More With Feeling: Nearly All General Interest News Paywalls Will Fail

Business Models

from the if-you're-not-one-of-the-giants dept

Just a few weeks ago we pointed out (for not the first time) that news paywalls for general interest publications did not seem likely to succeed outside of a very small number of exceptions: mainly three giant east coast newspapers which have established themselves as key news sources: the NY Times, the Washington Post and the Wall Street Journal (arguably the last one, with its focus on finance, might not even count as “general interest”). In that last post, we pointed out that even people who liked to pay for news tended to only subscribe to a single news source. That helps create a winner take all proposition where only a very small number (see above) can actually build a sustainable business model through an internet paywall.

And that means that even if you’re a pretty well known newspaper, falling outside the big ones, it means you’re going to be in trouble. Witness the LA Times failing paywall. As Nieman Lab notes, in terms of paper subscriptions, the LA Times used to rank above the Washington Post. But it didn’t make the transition to digital the way the Post did:

Digital subscriptions at the Los Angeles Times are way below expectations, and leadership, in a memo to staff, said the future of the paper could depend on solving the issue rapidly.

Whether due to unrealistic expectations or editorial and business failures, the Times is nowhere close to meeting its digital subscription goal. The Times had hoped to double its digital subscriptions from just more than 150,000 to 300,000 this year ? a number that would have to be doubled again, the memo said, to come close to covering editorial costs. But midway through the year, the Times is nowhere near that number, having netted only 13,000 digital subscriptions in 2019.

As the article notes, the LA Times basically missed the boat here, despite having a wealthy owner who could have invested a ton of money.

Of course, part of the problem here is focusing solely on paywalls as a solution. As seen by the three success stories, it can work, but in a winner-take-all kind of market, you need to be a winner, and the LA Times was not positioned to do that. And the LA Times hasn’t done much to distinguish itself as to why you’d want to subscribe to it rather than its competitors.

And it doesn’t look like the paper is going to figure it out any time soon. So far it’s plan seems to be wishful thinking:

In a memo sent to staff on Monday afternoon and obtained by Poynter, Executive Editor Norman Pearlstine and Managing Editor Scott Kraft wrote, ?Our future depends on rapid and substantial subscription revenue growth.? They added, ?Performance for the first half of the year ? has been disappointing.?

That’s the wrong approach. Subscription growth would be one way to increase revenue — but to do that you have to give people a reason to subscribe, and just doing the same things as those other newspapers isn’t going to cut it. I’m surprised that the LA Times hasn’t, instead, decided to buck the paywall trend and go in the other direction. Why not focus on opening itself up, building up traffic, and providing an alternative to the east coast papers who got all the subscribers by doing strong reporting, and then layering in other, better business models?

Unfortunately, the newspaper business keeps making the same mistakes over and over again and refuses to get creative. The possible demise of the LA Times is just one symptom of that failure to innovate.

Filed Under: journalism, news, newspapers, paywalls