Marketers debate strategy as paywalls become 'new normal'

The number of US newspapers using some form of online paywall is on the rise after several of the country's large dailies said they will adopt a pay-for-content model.

The number of US newspapers using some form of online paywall is on the rise after several of the country's large dailies said they will adopt a pay-for-content model. As the concept grows in popularity with local news outlets, media relations professionals are still debating its implications for their industry.

In one high-profile example, the Los Angeles Times will begin charging for access on March 5. The Milwaukee Journal Sentinel launched its digital subscription program in early January, including access to its mobile site and a soon-to-be-launched iPad app. Other newspapers that have launched a content firewall in recent months include The Dallas Morning News, the Minneapolis Star Tribune, and The Boston Globe.

“The digital revolution has hit larger papers the fastest and hardest, and that's where we're seeing most of the momentum with paywalls,” says Tom Rosenstiel, founder and director of the Project for Excellence in Journalism at the Pew Research Center, which estimates that 90% of newspapers are still without paywalls. “The reason for that momentum is due, in part, to the success of The New York Times.”

Earlier this month, the Times reported 390,000 digital subscribers by year-end 2011, up roughly 20% from its third-quarter tally. 

Nick Ragone, partner and director of Ketchum's Washington office, isn't convinced a digital-subscription model is a viable solution for most dailies, at least in the long term.

“Content can still be king, but in this peer-to-peer, social networking world it needs to be sharable. If it's not sharable, the content can get lost,” he explains. “A publisher may monetize a certain percent of people with a paywall, but I think the loss of distribution will far outstrip the value of a paywall and, ultimately, dilute brand equity because fewer people will read that content.”

In terms of media relations, Ragone adds that a paywall can also have a negative impact on whether a client pitches a particular publication with a story idea.

“If a newspaper has a strict paywall, it can be hard to link and share those online stories through social media,” he says. “The paywall issue is certainly not the first factor we consider – we still look at overall distribution, as well as the relationship we might have with a particular reporter – but it is a factor. You want to be able to share the story internally and with the client, and that can be hard to do if you can't link to the story.” 

However, Rick Edmonds, media business analyst at the Poynter Institute, counters that most publishers do understand the value of social media. He says that is why many newspapers with paywalls have “somewhat liberal rules in terms of people who come to a story from a search engine or an online recommendation. Those kinds of views, for instance, wouldn't count against a user's limit of free content.”

The growing adoption of the paywall concept may spur more marketers to pitch reporters stories with strong emotional hooks, because those types of stories are more likely to go viral on social media and gain readers beyond the paywall. 

Steve Rubel, EVP of global strategy and insights at Edelman, believes paywalls will become “the new normal,” although he expects to see variations of the model that have not yet emerged. “Paywalls will definitely change things from a media relations perspective,” he notes.

Yet even as publishers embrace the concept of paywalls, they want to distance themselves from the negative connotations of the term. Many publishers have adopted a metered approach that allows their website to generate subscriber income from its most frequent and loyal online readers, while not alienating casual readers who are not willing to pay but do help to dive traffic and, thus, advertising revenue.

“Publishers don't like the word ‘wall' because it sounds like they're keeping people out. What the industry wants to say is, ‘If you read our content a lot, we'd really like you to start paying.' That is a lot different than saying ‘We don't want you to look at our content at all unless you pay,'” says Rosenstiel. “From what I hear from editors, they want the conversation to be about online subscriptions.”

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