Blue skies beyond the newspaper paywalls

Opinion

Following Tony Gallagher’s claim that The Times has enough paying subscribers to fund a 700-strong newsroom, Ray Snoddy checks in on how the paywall monetisation model is faring across the newspaper industry.

It was a routine occasion at the recent Society of Editors conference. The fellowship of the Society is being awarded to a distinguished editor – in this case to the editor of The Times, Tony Gallagher, who uniquely has edited three national newspapers, The Daily Telegraph and The Sun, in addition to The Times.

He said he wasn’t really going to make a speech, and his remarks were more about thanking those who had contributed to his career.

Then he said something that, in retrospect, was very significant. The Times, which years ago was widely criticised for going behind a paywall and, as a result, faced the inevitable reduction in its general reach for years, now has 659,000 digital subscribers.

Then came the interesting bit. The money from those digital subscribers was enough on its own to fund the 700-strong newsrooms of The Times and The Sunday Times.

It is hard to remember now how the conventional wisdom at the time was that Rupert Murdoch must be crazy to do such a thing, and star columnists were distressed that hardly anyone would be able to read their pearls of wisdom.

Reasonable thoughts then, but we now know the scary truth, that with the decline in print sales and advertising being hoovered up by the online platforms, The Times and The Sunday Times might not have survived in any meaningful form without that crucial decision, or at the very least would not have 700-strong newsrooms.

Last week, Emma Tucker, formerly of the Financial Times and The Sunday Times, now editor of the Wall Street Journal, was also talking about her even more impressive digital numbers.

The WSJ has no less than 4.29m digital subscribers, an increase of more than 30% since Tucker took over at the beginning of 2023.

The publication’s parent company, Dow Jones, is now even looking at annual profits of $1bn within the next five years.

While conceding that there had been redundancies and painful reorganisations along the way, Tucker told Press Gazette that the key to such subscription growth had been “new, distinctive, useful, compelling, relevant journalism.”

There had been an increased emphasis on scoops, fast-moving investigative journalism and expert analysis alongside the WSJ’s more traditional fare of business and financial reporting.

Exclusives, including Trump’s bawdy letter to Epstein to mark his 50th birthday, and the paper’s reporting of the ICE murders in Minnesota, were noticeably robust.

Digital subscription pioneers

Meanwhile, the Financial Times, one of the pioneers of digital subscriptions dating back to 2007, now has more than 1.4m digital-only subscribers, rising to 1.5m paying customers for print and digital access.

The paper claims no fewer than 3m paying readers worldwide, though that figure is less robust because it includes corporate subs, group access, and licensing deals.

It is, however, yet another remarkable digital success story that provides quality coverage from around the world.

But at the top of this particular pile sits The New York Times, which had 12.2m digital subscribers by the end of last year.

It is an even more remarkable achievement given that it is a general rather than a business or financial publication, albeit one at the high end of the market.

It was largely a success orchestrated by Sir Mark Thompson, now chief executive of CNN, who was president and chief executive of the New York Times Company for much of the relevant period.

The NYT has reached these numbers because its digital offering has moved a long way from simply being about news and information, into a broad package that includes gaming, cultural coverage and cookery.

The analyst Olga Kornakova has described NYT digital as less a simple content bundle, more a “daily habit ecosystem,” as players of Wordle fully understand.

The four digital services, despite their individual differences, all speak to a universal truth about paywalls: they work best for big media brands, preferably international ones, that offer unique information users value enough to pay for.

By definition, in a circular argument, those users must not only have an interest in paying but also the ability to do so.

Paywall struggles and variants

Alas, running a successful media paywall is a harsh minority game where most players lose.

In general, the big online platforms have trained their users to expect free news.

Local and regional newspapers in particular struggle against competitors offering free news and are often forced to provide less local news and more entertainment and lifestyle content to boost reach.

Around the world, there have been dozens of failed attempts to impose paywalls.

There have been reports that 63% of people globally consume only free news and that 83% of users leave when they hit a paywall. A lot of global averages are involved here, although some of the data appear to come from Reuters Institute surveys.

More precise data is available from the Pew Research Center in the US.

Pew found that last year, 83% of Americans did not pay for news, though 53% tried to find the same story elsewhere when they encountered a paywall. Around 30% gave up entirely.

There are many variants of paywalls, as well as some financially successful alternatives.

One of the most radical comes once again from the UK: The Guardian‘s membership model.

While The Guardian makes its content freely available, users are regularly pestered to sign up for voluntary contributions.

It is still remarkable that the paper has 1.3m paying supporters around the world – a testimony to the power of distinctive, quality journalism located somewhere on the left-of-centre axis.

Overall, paywalls tend to create a two-tier system for both the media and society as a whole.

Against the vast wastes of false and malicious information on the internet, it is unfortunate that so much verified, professional news is not universally available.

But in a difficult world for media organisations, it would be curmudgeonly not to recognise a mechanism capable of funding the 700-strong newsrooms of The Times and The Sunday Times.

Raymond Snoddy is a media consultant, national newspaper columnist and former presenter of NewsWatch on BBC News. He writes for The Media Leader on Wednesdays — bookmark his column here.