In 1944, Lt. Hiroo Onoda was sent by the Japanese Army to the remote Philippine Island of Lubang with instructions to never surrender to the Allies and to fight to the death.
“We’ll come back for you,” his commander wrote. “But until then, so long as you have one soldier, you are to continue to lead him. You may have to live on coconuts. If that is the case, live on coconuts!”
At this point, the people opposing subscription models for American newspapers and advocating for them to be supported by digital ads (and unproven innovations somewhere in the future) are living on coconuts.
The war is over. The evidence is in. Newspapers, large and small, premium and not, gain additional revenue through subscriptions and lose little if anything in digital ads (UPDATED this sentence to add links to more evidence, since Digital First’s Jim Brady doesn’t like my Press+ link in the previous sentence.)
The Allies have won.
Dean Starkman, my boss and co-religionist, argued Monday that the Washington Post needs a paywall, and stat. We’ve been arguing this in one form or another for years now.
And in the years we’ve been arguing this point, the industry has moved our way, along with the evidence that digital subscriptions can work.
But there’s still an anti-paywall camp, and all too often its arguments are stuck in in the mid-2000s, ignoring events of the last few years.
Jeff Jarvis tweeted in response to Dean’s post: “CJR continues its monomaniacal crusade for pay walls. I want to psychoanalyze that.”
Alternatively, one could psychoanalyze sticking to the same digital ad strategy year after year after year and expecting a different result…
All while your print revenue does this:
Savvy! But that’s a consultant’s-eye view.
Other true believers resort to the old straw man strategy. And when you create your own opponent out of thin air, you’re guaranteed to win—every time!
Take Sarah Lacy of Pando Daily, who thinks Dean’s argument is “flawed and reactionary” and “a breathtaking view of how the old media world still thinks.” Maybe so. But to get there she has to misrepresent the argument in major ways. It’s a lot easier to win an argument when you’re arguing against a cartoon of your own creation.
Let’s take the straw men on one by one:
1– “Chairman Don Graham is not a Luddite, and he’s not stupid.”
But of course no one says that or even believes it. Believe it or not, you can think someone has the wrong strategy without thinking they’re an idiot.
2– “Unlike a lot of newspapers, the Post trying to do something innovative, rather than just take the easy out of throwing up a paywall.”
“Innovative” in this instance means unethically spamming Facebook friends with Post content. Lacy talks about the Social Reader’s “ups and downs,” which is quite the euphemism. The Post‘s app had about 600,000 users a day back in April. Then Graham pal Mark Zuckerberg tweaked Facebook’s settings. Now the Post‘s app gets 20,000 users, according to AppData—a 97 percent collapse in seven months.
It’s not that Social Reader wasn’t a worthy innovation (ethical considerations aside). It’s just that it didn’t amount to anything. And the Post is hardly the only newspaper experimenting. The New York Times leaky paywall is an innovation, and it is paying off to the tune of $100 million a year and is still growing fast.
Does “innovation” have to mean “makes no money”?
If you still don’t think that counts as an experiment, visit NYT Labs, described by guess who as “innovating the way they deliver the news.”
But see the NYT doesn’t count, really (emphasis mine), according to Lacy: “The New York Times own paywall revenues are barely keeping up with the fall in print revenues, and the Times has done it better than anyone.”
So, they’re only “barely” keeping up with the fall in print revenue.
That’s like saying, the patient is only sitting up and eating, not running marathons yet. Definitely, we should go back to incense and bleeding therapy.
And how is that WaPo Social Reader revenue doing?
But, good point. What is mere evidence in the face of deeply held beliefs? Just ask the GOP.
3– “The Post still has a sense of mission… Part of that sense of mission, I would imagine, is making news accessible for the public and finding a sustainable way to be part of journalism’s future, even if that’s the harder road to take.”
The New York Times has a mission too, and it has about 25 million unique visitors a month. Nearly 98 percent of them are not digital subscribers. That’s the point of the leaky paywall, which as with other anti-paywallites, Lacy appears to totally not comprehend: You can charge your core readers while allowing casual readers to visit your site up to X times a month. In that way the Times has preserved all or almost all of its digital ad revenue while bringing in $100 million in new subscription money. This is a no-brainer.
The meter model also means the modern paywall doesn’t preclude further non-subscription innovation.
4– “Subscriptions were never meant to be major revenue drivers in the old world either.”
This is the old Readers Never Paid for News catechism, one of the core beliefs of the FONsters. It’s a particularly nonsensical idea based on the false notion that readers have always thought they were paying for the fishwrap rather than for the news and content printed on it. Lacy writes, “for most newspapers, the cost of a subscription merely paid for the logistics associated with getting a piece of dead tree to your door.”
To which I would say: Money is fungible. You could just as easily say that advertisers paid for the non-editorial stuff and readers paid for the news. You’d be wrong there, too.
Also, because subscriptions were a smaller part of revenue in the past does not mean that’s where they have to stay. And print price increases should be part of that equation, by the way, along with smart hybrid strategies like Sunday paper subscriptions that get readers free or reduced-cost digital access.
5– “If an offline publication can’t sustain $60 million in losses without a paywall, maybe the costs are the problem.”
Ah. Here’s where we get to the nut of the issue, the logic of “free” that’s usually not spelled out quite so forthrightly:
The CJR’s biggest reason the Post needs a paywall is because its losses are unsustainable. Duh. On this we agree. The entire model of news has changed. But the answer isn’t trying to prop up unsustainable old world costs by charging readers more money. It’s retooling the business dramatically. I’m sorry if that means layoffs. But there are 500 people in the Post’s newsroom. You can’t tell me there is no fat to be trimmed.
The news staff is too big for our theory! The news staff must be cut!
What we have here—how does that go?—is a “breathtaking view” of how the new media world thinks.
These folks love newspapers to death.
This is what we are against. We vehemently disagree with glib assertions that because digital ads aren’t bringing in enough revenue, that somehow proves that the newsroom is too big. The Post‘s newsroom is already approaching half of its peak size. Yes, it would be profitable—for a short time—if it fired another 300 journalists. It would also not be worth reading, and its eviscerated news report would be a huge loss for the D.C. area and for the country as a whole.
But Lacy is hardly alone on the arguing-with-straw front. Mathew Ingram’s in on it too (as is Boing Boing’s Xeni Jardin). He says “this focus on a paywall as a magic solution misses the point.”
One more time: A paywall is not a magic solution. It is not a panacea, Steve Buttry, and we’ve never said or implied that it is. Nothing is, least of all gauzy exhortations to “innovate.”
Ingram also is incorrect to say that “Starkman also dismisses the idea that there is any value in the digital-first approach.”
Wrong again. The point is just that argument without evidence is just guruspeak. Here’s what Dean actually wrote (emphasis mine):
To say, in the absence of supporting data, that the answer for the Post is to “commit” to an anti-paywall strategy, to “push the innovation meter to 11,” and make “digital first a core mandate” is to say nothing at all. There is nothing in the PostCo.’s publicly released data to support that case. At some point, belief has to yield to evidence. Even Clay Shirky, who needs no one to vouch for his network-theory cred, has recognized the obvious in the case of the Post.
“Digital First,” in the sense of refusing to charge newspaper readers for a subscription, is bankrupt, both literally in the case of the main unit of the so-named American newspaper company, and, in the wider sense, as a strategy for newspapers generally.
If the free strategy can work, fine. But bring some numbers to the argument.
Also, the freehadists don’t get to own “digital first.” You can advocate charging for digital subscriptions and still be digital first, so to speak. This is not about the smell of newsprint in the morning (If newspapers could transition everybody to tablets or whatever tomorrow, we’d be first to support it). It’s about supporting robust institutional journalism. If we thought free could do it, we’d be all about it. It’s had 15 years, and it can’t work.
Scratch that. Maybe it can and maybe it will someday. In which case, the papers can drop their paywalls and share in the riches. Don’t hold your breath.
Finally, as a public service, I’ve drawn up a handy guide to the FONsters’ straw men:
— Paywalls are not a panacea, a cure-all, or a magic solution.
Nobody thinks they are. Nobody (that I’ve seen) has ever said that. Digital subscriptions are an incremental source of revenue at a time when newspapers are bleeding to death and digital ads are bringing in four bucks a CPM. They won’t succeed everywhere, particularly at newspapers that have gutted their newsrooms, and they’re not enough on their own to assure we have robust news coverage. But it’s money on the table that newspapers can’t reject hoping for some nebulous future “free” innovation, which not one of 1,500 American newspapers has yet to find in some 17 years of the Web era.
— A paywall is an all-or-nothing proposition.
This is false, of course. The meter model preserves almost all traffic—and thus, ad revenue— by allowing casual readers to visit 10 or 20 times a month while charging core readers for access.
— If you charge online you can’t have a “digital first” strategy.
Lacy says about the Post, “But they’re one of the only great media empires actually looking for a digital solution to a digitally-created problem.” So charging on the innertubes isn’t “digital”?
— Readers never paid for news. They paid for the delivery apparatus.
Ask one of those readers whether they fork over money for the paper or for what’s printed on it.
— “The single-minded focus on paywalls is slowing the development of other solutions.”
No it’s not. It’s just the lowest-hanging fruit. Come up with some other way to make money and papers will try that too.
Fortunately, these naysayers are losing the argument. Unfortunately it took far too long for the newspaper industry to move toward charging online, and some papers are likely too far gone.
Set aside your ideology and realize there is money on the table that news organizations can’t afford to leave alone.
I’m sure that will happen sometime. Even Lt. Onoda eventually got off the island—in 1972.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.