How Newsrooms Are Building Better Paywalls

News Outlets Apologize Less and Innovate More, With a ‘Freemium’ Model and Dynamic Paywalls

Gannett’s Amalie Nash is tired of journalists apologizing when they charge money for their product. After all, other businesses don’t do that.

“It’s not like at Starbucks, ‘I’d like a medium coffee.’ ‘Well, sorry, ma’am, we’re going to have to charge you $4 for that,’” Nash said.

At a time when local news finances are in need of a double shot, newsrooms are getting more aggressive and less apologetic about their paywalls. And they’re trying a variety of strategies to make them as effective as possible.

The New York Times allows one free article before prompting the login screen, then requires you to register with your email address to access three more free articles per month. The Wall Street Journal shows half an article before proposing a subscription midway through reading. One Gannett outlet uses a “freemium” model in which it reserves certain stories for subscribers while making the rest available to a wider audience without any limitation on the number accessed. And a few, such as the Bloomington Times-Herald in Indiana, maintain hard paywalls in which non-subscribers get no free stories, unless an exception is made because of an overriding public safety concern.

Whatever the approach, the goal is to turn occasional visitors into regular paying customers.

Howard Saltz, the Knight Foundation innovator-in-residence at Florida International University and former publisher and editor-in-chief of the South Florida Sun-Sentinel, “came to the conclusion many years ago that paywalls are the only way [news outlets] are going to survive.”

Advertisements don’t cut it anymore, Saltz said: “Advertisers are smart enough to realize that a spike in traffic during a certain period doesn’t really reflect your overall traffic.” He gave the example of hurricane season in South Florida. And worldwide, the pandemic. “You have a spike in traffic during periods when people can’t buy anything anyway,” Saltz said. Plus, he said it makes more sense for advertisers to buy ads on social media sites or through internet service providers — not news sites.

Paywalls, however, make sense: “If the consumer wants a product, you must pay for the product. And if you don’t want the product, or if too few people want the product, then the product goes away. That’s the free market,” Saltz said. “I don’t know that this is going to work; I just know that it’s the only thing that can work.”

Gannett’s Approaches

Before merging with GateHouse Media, Gannett used to apply what it calls a “simple meter” to its more than 100 news sites, according to Nash, the company’s Senior Vice President of Local News and Audience Development. A site was assigned to one of three tiers depending on its size: seven free articles per month for its largest sites, five for medium-sized ones and three for the smallest. Once the free articles were read, the hope was that the reader converted to a paid subscriber and gained access to all of the site’s content.

In July 2019, Gannett introduced a hybrid model where consumers could become subscribers to read subscriber-only content. What’s chosen to go behind the wall is up to the newsroom, according to Nash: “You don’t want to put things that are commodity content behind a paywall because people aren’t going to subscribe and they’re not going to see the value in something like that.” Sports commentary, local dining and investigative projects do very well, according to Nash. Ten to 20 percent of Gannett’s journalism now falls behind this “for subscribers” wall, and the company can see when people subscribe directly off that content. While Nash said she can’t attribute all growth to this model, it continues to drive results and is one of the most successful ways the subscriber base has grown in years.

Gannett merged with GateHouse Media in November 2019, and Nash said GateHouse’s paywall practice is called a “two-five meter”: A consumer can read two articles for free, then is prompted to become a registered user, which then unlocks three more free articles for a total of five free stories. “A registered user is four times more likely to become a digital subscriber than just an anonymous reader,” Nash said.

A registered user is four times more likely to become a digital subscriber than just an anonymous reader.

Amalie Nash, Senior VP of Local News and Audience Development, Gannett

The company, which now owns more than 260 news outlets, is 60 days into an “experimental” phase with its four biggest legacy news sites’ paywalls, testing out ways to merge a three-five meter and the subscriber-only content. Seeing good results, the company expanded the model to most of its other sites and will continue to experiment moving forward this year.

And then there’s another Gannett model, “freemium,” a mix of free and premium. Besides USA Today, the Detroit Free Press attracts the most visits (the next closest site traffic-wise doesn’t even come close, Nash said), yet the geographic area contains a lot of competition, so the content has always been free. However, last August, the site put 20 percent of its content behind a subscriber-only wall. “There’s still no paywall; you’re never going to hit a paywall,” Nash said, unlike the meter model. A consumer won’t be prompted to become a registered user, and there isn’t a limit on the number of articles they can read. Since implementing the freemium model, more than 30,000 subscribers have paid the Detroit Free Press to gain access to the paid content.

Dynamic Paywall

Beyond a simple meter, where a reader hits a paywall after a certain number of stories, and the so-called predictive model where a newsroom makes certain stories subscriber-only, the Chicago Tribune is trying out another approach, according to Chicago Tribune’s Chrissy Taylor.

Dynamic paywalls “are kind of in between” the simple meter and predictive model, Taylor said: “The idea was, using the data that we know about our readers, is there an opportunity to convert someone with a different type of package than a full-time reader?” The company targeted out-of-market sports readers and split the group in two: When 50 percent hit the paywall, they were charged full price for access; the other 50 percent were offered a cheaper price. However, the difference wasn’t worth the revenue the company lost to make it worthwhile, Taylor said.

Moving forward, it all comes down to personalization. Each reader has a unique relationship with the news outlet, and one model doesn’t speak to all readers. “Tailoring that paywall interaction to what we know about them, because we have some data on them or we have look-alike data that we can build a cohort audience,” Taylor said, “that’s really where we see a lot of promise.”

“Look-alike data” refers to the idea that people with demographic and/or behavioral similarities act similarly as sales targets, and they can be marketed to as a cohort. So, theoretically, if data show that it takes longer for those reading sports stories from outside the primary coverage area to convert to a paid subscription, a news outlet might show more patience with those particular readers and give them more stories before they hit the paywall.

Nash echoed Taylor’s insight about personalization: “If you recognize someone’s behavior, then it’s easier to figure out at what point you put that wall in front of them.”

No One-Size-Fits-All

There isn’t a one-size-fits-all approach, Saltz said, but he believes offering several free articles a month is too many. Saltz gave the example when someone goes to Costco and is given a free food sample: “[Costco] calculated that doing so will increase purchases of that particular product.” If Costco gave the free sample away every time someone shopped, the customer might never buy the product. While he doesn’t know the magic number of free articles that will then convert to paid subscriptions, Saltz said, “We have to be absolute about it. You can’t pussyfoot around, you’ve got to say, ‘We are a product. And you just can’t expect something for free.’”

Nash said a paywall helps send a message that there’s something worthwhile on the other side. “It’s really important to emphasize the importance of what we do, the work, the value that we bring,” she said.

Nash believes subscription revenue should be the main source of revenue to the news industry in general, with exceptions like non-profit publications. For “traditional, mainstream media, consumer revenue is the way of the future,” Nash said, and Gannett continues to see double-digit gains in its subscriber base growth.

“Reader revenue directly supporting your business is something that you have control over and can continue to grow,” Nash said.

Article image by Mick Haupt used under Unsplash license (Unsplash)

About the author

Hannah Farrow

Writer

Farrow, a Medill master’s graduate with a focus on magazine writing, is a 2020 Postgraduate Reporting Fellow at the Pulitzer Center. She interned at the Tampa Bay Times and freelances for several publications.

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