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Osgerby: Pay walls and the future of online journalism

BY PAUL OSGERBY | FEBRUARY 23, 2015 5:00 AM

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In recent years, journalism and news agencies have shifted the discussion inwards. The conversations, which can be found from the New York Times to Al Jazeera, focus on a perceived decline in traditional news reportage and consumption. It’s a sort of meta-critique.

From the speed of information travel to studies showing readers today are less focused on blocks of texts, preferring more visualized information, the reasons for journalism’s fall in mainstream popularity is somewhat shrouded in what-ifs. The almost extinction of printed newspapers is apparent, but why can’t these same stories just be consumed the same on the web?

I believe a part of dwindling readerships to traditionally trusted news agencies, such as the New York Times or the Gannett Company, is down to a simple thing: money.

The New York Times only allows readers 10 free articles per month before they are blocked off from full-length stories and reach a pay wall. Even the Iowa City Press-Citizen and Des Moines Register, both part of Gannett, offer readers to ”enjoy a limited number of articles over the next 30 days.”

Surprisingly, the Onion also has a pay wall in place for international readers.

In 2011, the New York Times introduced a revamped pay model after unsuccessfully attempting one a couple years earlier. The new pay wall was instated as a means of reconciling advertisements and generating revenue online as the paper editions die out.

However cost-effective the model may have appeared in theory, the problem arises of actually getting people to subscribe.

A little over a year ago, the Nieman Journalism Lab published a report on Gannett’s then-recent adoption of a pay wall. The article noted that while sales were up for that fiscal year by 1.1 percent, the fourth quarter saw a 1.6 percent drop. What does that decrease mean?

Nieman Lab’s article cited Rick Edmonds, researcher and writer for the Poynter Institute, in his attribution of the problem. He called it a “one-time revenue event.”

By implementing a pay wall, Gannett saw its loyal readers pay the initial subscription fee in order to receive news from their trusted agency, which caused a spike in revenue. However, as indicated by the 1.6 percent drop in the fourth quarter, it lost at winning over more clientele after a short three quarters.

After tapping into those initial resources, Gannett no longer has a new audience to reach as the pay wall effectively pushed new readers away from paying those fees. The New York Times faces a similar problem.

So, where do these big-name, traditional news agencies head with their online content?

In order to maintain their prestigious status, the New York Times and Gannett need to offer innovative reportage that sets them apart from free-to-read agencies. That requires world-class reporters, editors, technology, etc., which do not come at a cheap price. It’s a failing business model, especially when other prestigious outlets such as the BBC or Reuters have not implemented pay walls.

These big-name agencies with pay walls need to adapt their models. Offer free-to-read content that covers international and local news, but have a pay wall in place for in-depth, groundbreaking exposés, such as the New York Times’ recent series “Towers of Secrecy.”


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