Naspers’ three flagship Afrikaans language newspapers, Die Burger, Beeld and Volksblad, will soon be adopting a paywall model, requiring would-be readers to pony up a subscription fee to access their online sites.
In announcements (see the Beeld announcement here, Volksblad’s here, and Die Burger’s here), the newspapers explained that they would be launching new, redesigned websites and tablet apps, and would be adopting a “digital first” strategy, breaking news online first and prioritising online content. However, they also announced that, as part of this refocusing on digital, they would be adopting a paywall model.
Current subscribers will get online access included in their subscription fee, while non-subscribers can pay R99 a month for digital access, including the tablet app. Those who don’t want to pay can read 20 articles a month for free before being shut out by the paywall.
According to their announcements, they have chosen to implement paywalls because their online ad sales have been too modest to support their newsgathering activities, and their current model of “giving away their original content for free online” is not workable.
This is a common lament among newspapers these days. The basic problem can be summarised as “analog dollars, digital dimes”, or to put it in more South African terms “analog rands, digital cents.”
Essentially, as readers have transitioned from physical newspapers to online news, traditional newspapers have faced two problems – loss of audience and loss of revenue. Both problems are fundamentally the result of increased options online. A few decades ago, anyone interested in the news pretty much had to read whatever newspaper was available locally, supplemented by TV news. Now, anyone with an internet connection can access news from all manner of sources – the BBC, the New York Times (although it too has implemented a paywall), or their next door neighbour’s blog.
With this explosion of options, newspapers have lost their guaranteed audiences, and advertisers have expanded their channels for reaching audiences. The net result is that there is less demand for ad space on newspaper websites than there used to be for space in physical papers.
On top of this, companies also find it harder to charge high rates for online ads. Space in a newspaper is limited, but online space is, practically speaking, infinite. Thus, ad space in a newspaper is more valuable than ad space online. Furthermore, new metrics for assessing ad effectiveness and paying for ads have come with the internet, such as the pay-per-click ad model pioneered by Google (advertisers only pay for such ads when an internet user clicks on them), and such models tend to be a problem for newspapers. For example, the click-through rates on Google’s pay-per-click ads are very low – only around 2% of users click on ads. This is fine for Google, which serves billions of pages, but for newspapers with their small relatively online audiences, it’s definitely a losing proposition.
All of this makes a paywall model look very appealing to publishers. With a paywall in place, they can be guaranteed a certain amount of revenue and can make their online operations turn a profit.
At least, that’s the idea. But the truth is that very few newspapers have managed to make a success of a paywall model. It remains to be seen how successful Business Day’s model will be. Currently readers have access to a limited number of articles, afterwhich they have to register as a BDlive user, where they then have unlimited access at no charge. However, the publication has warned that “soon” they will only be able to view 15 free articles within a 30-day period and will then have to subscribe.
The problem, again, is options. What’s to stop a reader from just heading across to, say, Moneyweb and getting their news fix free?
In general, the papers that have made paywalls work are those that offer something unique in the news line. The Wall Street Journal, for example, has done OK with its paywall thanks to its focused, specialist reporting on business. Similarly, the New York Times seems to be making a success of its paywall thanks to its huge (and global) audience and unique investigative work and important op-ed pages. It’s possible that Beeld and its peers may be able to sell their regional news and use of Afrikaans as unique qualities that get people to subscribe. However, it’s almost certain that the papers will lose a lot of readers to free online options when the wall goes up.
Newspapers face many challenges as their industry is disrupted by powerful new technologies and so far, no one has stumbled on a formula that seems likely to work. South African newspapers are beginning to experiment with new online revenue models, but it’s not clear whether or not they will succeed. The only thing that is certain is that the news industry will face more disruption ahead.