This post originally appeared at ebyline.biz and is republished here with permission. These figures are for the US but show some interesting conclusions for all newspapers...
The beleaguered newspaper industry has finally settled on a digital revenue strategy—the metered paywall—and now everyone’s pitching in to get it built. Paywalls have their critics, their boosters, more critics and then the critics-who-also-want-to-be-boosters. Time will tell who was right but we were curious to know how this Great Paywall is getting built—which newspapers are participating and why?
So we took one list—a list of paywalls scrupulously compiled by newsandtech.com—and another list—daily newspapers with circulation and ownership data from the Audit Bureau of Circulations (US) —and spliced them together. The result: a pretty comprehensive (see caveats at bottom) look at what types of newspapers are adopting paywalls. Long story short, big newspapers are building paywalls in much greater proportion thansmaller newspapers and that’s true not just for the very largest dailies but also for the many hundreds of newspapers further down the circulation ladder.
Why are we comparing print circulation to online subscription models? Because print is where the revenue currently is and there’s a good argument to be made that the majority of these paywalls are really designed to hold on to those loyal subscribers after years of cannibalizing print revenue by giving the same content away for free online.
Paywall Adoption Skews By Newspaper Size
Looking at the number of publications is one thing but adding in circulation figures gives us a much better idea of how many actual readers are affected by the shift toward paywalls. While just 239 of the nation’s 1,532 dailies have (or have announced) paywalls, they represent around a third of all daily readers. That’s because of the 20 largest newspapers by circulation, nine are or will be behind paywalls, representing 51 percent of that readership.
But go down the circulation rankings and paywalls are far less prevalent, even including industry leader Gannett’s planned implementation for later this year. Under 100,000 circulation only 21 percent of readers are affected, under 50,000 the share is 19 percent and under 25,000 the figure is just 16 percent. You might be inclined to shrug off the small newspapers in that last group but they are the bulk of the industry: two out of three daily newspapers have circulations under 25,000 and while they account for only one out of four readers, they’re the primary news sources of countless small cities, towns and rural areas in the U.S.
The higher adoption rates by larger newspapers (see chart) could be seen as proof that paywalls are largely defensive moves intended to reverse the online cannibalization of loyal print readers. Having sunk resources into building robust online businesses, big papers now can’t afford to abandon their online ad revenue but can’t rely on it, either. Looked at from the opposite direction, small newspapers are more dominant in their advertising and audience markets and have put less into their web sites but also have fewer resources to devote to building paywalls—not an inexpensive enterprise, at least when The New York Times is concerned.
Expect More Chains To Build Paywalls
The data also make clear that nearly all the biggest newspaper chains are on board and nearly all are adopting a toe-in-the-water approach in case they need to backtrack or adjust course. Gannett, of course, announced that all of its newspapers, except for its flagship USA Today, would adopt some form of paid model by the end of 2012. Besides Gannett, the largest newspaper chains vary widely in their paywall adoption but none has gone all in (see chart below). With the impending decision by the Chicago Tribune to charge, Tribune Co. will have put 84% of its print circulation on a paywall model. At the other end of the spectrum MediaNews has only 12% behind a wall and Community Newspaper Holdings has just one newspaper out of 85 with a paywall.
Can the paywall data make any predictions? It looks like the trickle is turning into a torrent as chains like Gannett decide the experimental phase is over. McClatchy said recently it’s confident enough to expand paywalls from the Modesto Bee to more titles and Nieman’s Ken Doctor thinks that 20% of U.S. daily newspapers will have paywalls by the end of 2012 (not far from the current 16%). As for the product that powers all this—that would be the journalism—Poynter’s Rick Edmonds gave evidence earlier this year that paywalls may be a harbinger of retrenched, reinvigorated newsrooms. If that’s the case, this is a list of where to look first for an end to the long retreat from hiring, covering and publishing.
Download the data we used for this post here: Ebyline-Newspapers and Paywalls
Counting paywalls, newspapers and circulation isn’t an exact science, as Nieman’s Adrienne LaFrance pointed out recently. Newsandtech.com’s paywalls list seems pretty comprehensive but is clearly missing a few publications and is structured in a way that probably resulted in our making errors when crunching the data. We updated that list with the most recent paywalls announcements but probably missed a few nonetheless. Our data do not include the many large ownership shifts of recent weeks in the industry (Buffett, Halifax, etc.), either. Audit Bureau data on circulation and ownership are also sometimes fuzzy, duplicative or mis-categorized but we’ve done our best there, too.