Local News Revenue Conundrum: Paywalls and Digital Subscriptions

The need to diversify revenue streams is fairly universal. As a result, media providers in the Pacific Northwest and elsewhere are experimenting with a
range of different way to secure income. One popular way newspapers are doing this is through paywalls and digital subscriptions.

Research conducted by Alex T. Williams, a 2015 Research Fellow at the American Press Institute (API) found that “of the 98 newspapers we looked at, 62 papers used meters, which is nearly three times as many as those [21 papers] not requiring a digital subscription.”

Williams’ research—which covered 98 daily newspapers in the United States with a combined daily circulation (across print, digital, and branded editions) above 50,000
readers—showed how, since 2012, U.S. newspaper publishers are embracing metered paywalls (where content must be paid for after a certain number of free articles) and full digital, or combined print and digital, subscriptions are the leading mechanisms for securing online revenues.

These experiments are not unique to larger titles. Paywalls are also present at smaller entities from weeklies such as the Cottage Grove Sentinel (Oregon), a weekly title with a circulation of 4,200, as well as newspapers like the Vancouver Columbian (Washington) and the Bend Bulletin (Oregon) (circulation: 26,986 Monday through Friday, 27,253 on Saturdays, and 27,599 on Sundays).

As shown in this chart, the models that publishers in the Pacific Northwest use, as elsewhere, vary considerably.

This reflects considerations such as frequency of delivery—the Oregonian, for example, moved to four days a week of home delivery
in late 2013 —and economies of scale for longer subscriptions.

The Seattle Times has also experimented with selling subscriptions on Groupon. A recent o er included $18.50 for a 26-week Sunday newspaper subscription ($103.74 value) or $27.50 for a 52- week Sunday newspaper subscription ($207.48 value). These deals are substantially discounted.

Commenting on whether the future lies in “readers paying for content or through
advertising,” Jim Simon, the former managing editor of the Seattle Times, observes that “obviously it’s going to be a blend of those things, but there is real debate about which things you should really concentrate on or put your primary focus on.”

“I think there’s a debate [to be had about] whether those new revenue sources around online really [are] the most fruitful,” he says. This important strategic question plays out against a backdrop where “like a lot of folks in the legacy business, revenue remains stubbornly coming from print [and] a diminishing print base.”

For the Seattle Times and others, the need to capture digital subscribers remains important, but it is just one of multiple income sources that local media providers are trying to unlock.

Read about this and more in the Agora report.

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