Tag Archives: paywalls

What’s the average cost of a news article?

Media journalist Patrick Smith asks on this blog today How much is an article worth? His answer, as far as likely online readers are concerned, is very little.

This got me thinking. How much does a news article cost to produce? Journalism.co.uk is an online-only operation – a bootstrap operation as Kevin Anderson once called it – and obviously has much lower overheads than London-based national newsaper businesses. But if we could work out the cost-per-article for our own business, then that would at least provide a baseline guide to the likely costs to Murdoch et al.

Taking into account wages, expenses and a percentage of overall overheads (rent, bills etc), but discounting non-news-related administration, aggregation, tip of the days etc, we calculated the average cost of an article (feature, news story or blog post) to be around £37.00.

We have no intention of erecting a paywall around our news content, but if we were to, just to recoup that expenditure we would need 370 people to pay 10p each to read each article, or 3,700 to pay 1p each. In 2009, the average number of page views per article on our blog and main site was 440 (this includes all our aggregation posts, which probably skew the figure downwards slightly) but that means at current traffic levels we would need a model of 10p per article to be paid for by 84 per cent of our current readers.

Factoring in the much greater overheads of national newspaper publications, I would guess that the cost per article could be as much as 10 times the cost to us, perhaps around the £400 mark. I could be wildly off, and would be very interested to hear from anyone who has actually analysed this properly, but I think it is pretty obvious that there is a serious problem with the paywall model as a sole path to profitable news production.

Forbes.com: Circulation revenue is more stable than paywalls, says Scripps senior VP

“Based on our experience of publishing on the web for 15 years, paywalls don’t make sense,”says Mark Contreras, senior vice president for newspapers at US publisher E.W. Scripps Co and chairman of the Newspaper Association of America (NAA).

In this Forbes.com interview, Contreras refers directly to Scripps’ own experiment with a paid for sports website in Knoxville: “When we took the paywall down, the traffic ballooned and so did its revenue.”

Instead, growing revenue from circulation is preferable and a return to the 1940s newspaper industry model of 60 per cent of revenue from advertising and 40 per cent from circulation is happening, he suggests.

Audience is up. Our subscriber churn has never been lower. Today we have the most stable circulation base we’ve ever had. It’s generating, on a per-unit basis, more than it has in a long time. In some cases double digits.

Full interview at this link…

(Hat tip to @jayrosen_nyu)

PDA: Telegraph.co.uk will chase channels not web traffic, says digital editor

Telegraph.co.uk will move away from chasing high reader numbers online to focusing on “content, commerce and clubs”, says Edward Roussel, digital editor at the Telegraph, in this interview with PDA.

With the realisation that high web traffic figures does not guarantee a sustainable business model, Roussel says the focus will now be on developing channels. Part of this will be the work of Project Euston, the Telegraph’s new digital entrepreneurial unit led by Will Lewis, which has now been up and running for three weeks.

Euston is not a private club where only certain people can operate. It is designed openly. We have done it so that any one of our over 500 journalists who has a brilliant idea can apply for funding and other resource, and try to make it a reality.

The channel strategy will focus on creating content and commercial opportunities, such as shops and clubs, around niche areas and PDA picks up on the site’s existing gardening section, which carries a shop and drives readers to buy.

While there are opportunities to charge for access to certain areas, such as crosswords, by setting up clubs, Roussel adds that there are no immediate plans in place to go behind a universal paywall.

Full post at this link…

paidContent:UK: Guardian’s paywall warning ‘sounds like B.S’ to Murdoch

paidContent:UK has a report from yesterday’s News Corp. conference call in which CEO Rupert Murdoch brushed off a paywall warning made by Alan Rusbridger last week. Murdoch hadn’t read the Guardian editor’s Hugh Cudlipp speech but when asked what he made of its content, said: “I think that sounds like B.S. to me.”

In regards to paywall progression at the Times, Murdoch said:

“We’re looking at various alternatives – and I don’t think we’re ready to announce yet …We’re in the midst of a lot of talks with a lot of people that are coming to a head – and you’ll hear a lot more from us in the next two months.”

Full post at this link…

Lost Remote: Newsday’s 35 subscriber pay wall

Since Newsday, a newspaper based in Long Island, New York, put up its $5-a-week paywall three months ago, only 35 people have signed up. “That’s a gross of $9,100 per year for the site,” reports Lost Remote.

Full post at this link…

More on AllThingsD at this link…

Alan Rusbridger: ‘I worry about how a universal pay wall would change the way we do our journalism’

Guardian editor Alan Rusbridger strongly believes journalists should link to the specialist source. We’re rather fond of that approach here, so here’s his Hugh Cudlipp lecture in full. There’s a video interview at this link.

There is lots to pull out here, but key were his comments on pay walls – he doesn’t believe it makes commercial or professional sense:

[C]harging might be right for some bits of the Murdoch stable of media properties, but is it right for all bits of his empire, or for everyone else? Isn’t there, in any case, more to be learned at this stage of the revolution, by different people trying different models – maybe different models within their own businesses – than all stampeding to one model?

(…)

As an editor, I worry about how a universal pay wall would change the way we do our journalism. We have taken 10 or more years to learn how to tell stories in different media – ie not simply text and still pictures. Some stories are told most effectively by a combination of print and web. That’s how we now plan our journalism. As my colleague Emily Bell is fond of saying we want it to be linked in with the web – be “of the web”, not simply be on the web.

You can also hear Rusbridger talking about pay walls in Coventry two weeks ago: http://podcasting.services.coventry.ac.uk/podcasting/index.php?id=298

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Rob Grimshaw on the paywall backlash

FT.com managing director Rob Grimshaw, regular spokesperson for the paid-for content model,  has a real problem with the language used by critics of the paywall, he told Journalism.co.uk yesterday.

“It’s always put into pejorative terms.” he said, “It doesn’t happen to any other product: you don’t talk about restaurants giving people a bad user experience by giving them a bill at the end of it.

“It’s understood that something has been produced and it needs to be paid for; somehow with news content it has become a totally different argument,” he said.

It is almost regarded as a “sort of a criminal act to have the temerity to charge for some of our products,” Grimshaw added. “It’s something that we need to get away from.”

“We’re not a charity, we’re a company with shareholders: there’s nothing free about the information we produce – our editorial operation costs millions of pounds to run and we don’t see it’s odd to put a price on it. In fact, it’s probably the only way to run a reasonable business.”

Needless to say, he supports the NYT’s newly announced FT-style subscription model, scheduled for 2011: “Publishers need to get themselves out the hole and be a bit more bold and brassy,” he said.

Publishers shouldn’t, he added, be afraid to say their content has got a value. While he admitted the FT has a niche and affluent reader base for its subscriber model, he believes general news sites can do it as well.

“Our sense [is that] if other publishers do go for it, they will be able to build successful models.”

FT.com is not without its free content rivals, he said: “[W]e’re not short of competition – for every topic we cover on FT.com you can find a list of sites as long as your arm.”

“There are parallels between what we’re doing and what general news publishers will have to do as well. For me, the big thing is quality. It all comes back to quality. Whether it’s niche [or not] it’s got to be good”.

General news sites have the capability, brand and long heritage with which to build better quality sites, Grimshaw argued. They can be “far more compelling than one man blogging in a room,” he said.

“There are numerous ways that publishers can create sites which people are prepared to pay for because they are better than anything else that’s out there.

“I don’t see that the publishers are going to have trouble to get their users to pay for content.”

Grimshaw’s firm belief, as he has said before, is that newspapers cannot  live by advertising alone.

Citing IAB figures from last year (available at this link), he said it was paid-for search that took “by far” the bulk of the money: around 62 per cent; with 19 per cent to classified; and only 18 per cent to online advertising spend.

“It seems everybody in the whole world is trying to float their business on that [advertising model]. It’s just not big enough for every one of those businesses  (…) so something is going to have to give.

“Either publishers are going to find themselves in serious difficulties, or they’re going to have to come up with another way of making money.”

FT.com’s forthcoming content plans include a new Blackberry app, ‘one day pass’ subscriptions, and video for iPhone.

Read more about it on our main site.

SFN Blog: French news sites to erect pay walls

French news sites L’Express and Le Figaro will follow in the footsteps of the New York Times and erect pay walls for their websites.

A report from Le Monde suggests the new models could be introduced next month for Le Figaro and late this year for L’Express.

Full post at this link…

Felix Salmon: ‘Online subscription revenues won’t make newspapers profitable again’

Felix Salmon responds to John Gapper’s Financial Times column Charge for news or bleed red ink, in which Gapper suggests that while only a small number of New York Times readers may sign up for subscriptions under its forthcoming charging model, this would provide a significant revenue boost.

Salmon goes ‘through the numbers’ and writes:

With the New York Times Company making the best part of $300 million a year from online advertising, it’s hard to see that the extra revenue boost would really be worth it.

The point here is that with the powerhouse NYTimes.com site front and center, the New York Times Company as a whole is a major online media player, serving up billions of high-prestige page views and building strong relationships with every major online advertiser and media buyer in the country. Even under the most optimistic scenario, a majority of the NYT’s loyal readers will desert it when it moves to a paywall. And with those readers gone, media buyers are by no means guaranteed to stick around.

Full story at this link….

Daily Intel: New York Times to bring back pay wall?

Update: New York Times confirms it will bring in new charging system from January 2011.

Having already pioneered and seemingly abandoned charging for its website, is the New York Times about to introduce a new pay wall or Financial Times style metering system for its website?

According to the Daily Intel, a new access model will be brought in within a matter of weeks. (Note that in November last year a pay wall decision for the times was also scheduled for “within weeks”, but didn’t emerge.)

Full story at this link…

On paidContent.org, James McQuivey, an analyst at Forrester Research, looks at how paid content on NYTimes.com might work and what the Times should be looking at when building a wall.

But, McQuivey adds:

Notice that this advice is directed to NYTimes.com and nobody else. Because there is no other newspaper that we believe can pull this off at this time, even though a majority of newspaper editors are considering it.