What We Know About the Business of Digital Journalism

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Columbia Journalism School | Tow Center for Digital JournalismMore fundamentally, Moroney had concluded that a focus on volume—eitherin the form of cheap print subscriptions or of Web traffic that generated insufficientrevenue—had damaged the news industry’s economic vitality. “What Imost fear about this obsession with volume is it underlies the persistent beliefthat if we will just grow sufficiently large audiences online, then eventually wewill sell enough advertising to be sustainably profitable,” he told the group. Headded, “There is more supply [of online ads] than there is demand. And the explosivegrowth of social media only ensures this imbalance of supply and demandwill persist for a considerable period of time.”Others at the Morning News noticed that traffic to the Web site had grownas print subscription rates rose. Why pay more for print, some readers seem tohave reasoned, when you can get the same news free online? “We found whenwe raised the price of the paper, a lot of people migrated to dallasnews.com,” saysExecutive Editor Bob Mong.The News launched an aggressive pricing scheme for its digital content inFebruary 2011. People who don’t subscribe to the paper must pay $16.95 amonth to get access to the Web, iPad and iPhone versions of the Morning News.Print subscribers already paying $33.95 a month get unlimited access to anydigital edition.It is a paywall, but not an absolute one. Stories that strike the editors as “commodity”journalism—such as breaking news, or weather and traffic updates thatcould easily be found elsewhere—are free to all. More proprietary or exclusivejournalism requires a subscription. (Currently, about half of the stories on thesite’s home page have open access.)When Moroney announced the pay plan, he and his staff were predicting thatpage views would drop by 40 to 50 percent. “I’m not confident we’re going tosucceed,” he told Nieman Journalism Lab. “But we’ve got to try something.” 10 Inan interview a few weeks before the paywall launched, he portrayed the strategyas a way to help return journalism to one of its former, and highly profitable,roles as a one-stop storehouse of local news. “At least for a period of time, youcan restore the bundle,” he said.Paywalls: Information at a Price 71
The Story So Far: What We Know About the Business of Digital JournalismIn late April 2011, six weeks after the pay plan launched, the News did seetraffic declines—though less, so far, than Moroney had predicted. Unique visitorswere down 17 percent, and page views declined 28 percent, compared to thesame period in 2010. Mark Medici, director of audience development for theNews, declined to disclose how many new digital subscribers had signed up, butdid say that 27 percent of print subscribers had enrolled for digital access.Traffic declines were also on the minds of Miami Herald executives when theydebated whether to institute a pay plan.The Herald did a survey on its site in October 2009 to determine users’ willingnessto pay for its content. It was a voluntary and thus unscientific poll; nevertheless,the results didn’t inspire a great deal of confidence. Fifteen percent saidthey’d pay for unlimited access; an additional 23 percent said “maybe.” The dollaramounts weren’t meaningful, though; less than 5 percent said they would spendmore than $10 a month.Another survey question asked readers if they would make a “voluntary financialpayment” to support the Herald’s site. Nearly a third said they were very orsomewhat likely to do so, and so a few weeks later, the Herald’s site instituted a“tip jar,” attaching this plea to many pages on the site: “If you value The MiamiHerald’s local news reporting and investigations, but prefer the convenience ofthe Internet, please consider a voluntary payment for the Web news that mattersto you.” Says Armando Boniche, the Herald’s circulation director: “We got about$1,000 to $2,000 total. McClatchy [the Herald’s parent company] had us pull itafter six weeks.”Meanwhile, the Herald increased print subscription prices, though not to theextent that Dallas did, and stopped discounting the paper in Broward County, justnorth of its home market. And the Herald made a few smaller price-enhancingmoves, such as charging 50 cents a week for an insert with TV listings and $1extra for the ad-filled Thanksgiving Day newspaper. (Still, old habits die hard. InJanuary 2011, the Herald was offering six months of seven-day delivery for just77 cents a week—a whopping 83 percent discount from its stated price.)72
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