It’s time for Stuff to add its bricks to the paywall

It is time for Stuff to bite the bullet and introduce a proper paywall for some of its online content.

It is now the odd one out among the New Zealand newspaper companies that have seen their paid circulation and advertising revenue decimated by the Internet.

NZME’s premium service for the New Zealand Herald is three years old and Allied Press, publisher of the Otago Daily Times, has announced it will charge for premium content by the end of the month.

The Herald’s paywall has been a success story. NZME now has 100,000 digital only subscribers paying between $149 and $199 a year. While its earnings are still no match for the revenue derived from print subscriptions, they are going up while newspaper sales go down.

NZME’s first half results this year showed digital subscription revenue of almost $8 million, an increase of 54 per cent on the same period last year. The numbers were enhanced, of course, by the acquisition of BusinessDesk last November, which added 8000 subscribers. Nonetheless, both volume and revenue has been rising steadily since 2019.

It was understandable that Stuff might take a wait-and-see approach when NZME announced parts of the Herald were going behind a paywall but any uncertainty over the wisdom of such a move should now have evaporated.

It is time for a common approach: Premium journalism is expensive to produce, and the public should expect to pay for it.

Worldwide, there is a growing acceptance by the public that the free ride is over. It is even being grudgingly (far too grudgingly and parsimoniously, in my view) acknowledged by the rapacious predators who run search engines and social media platforms.

And digital subscription represents a revenue stream that traditional publishers cannot ignore in the face of an alarming fall-off in print sales.

The New York Times is a problematic example to use: Its scale and reach are beyond anything a New Zealand publisher could ever dream. However, it does provide an object lesson in the benefits of aiming high.

At the end of last year, the Times had 8.8 million subscribers and fewer than 10 per cent of those were from the print version. A month later it acquired a sports news website, The Athletic, and added enough subscribers to take it over the magic 10 million mark – three years ahead of schedule. It announced its goal is to reach 15 million in the next five years. When you consider it set the 10 million goal when its subscriber base was 4.3 million, I wouldn’t take bets against it reaching the new total.

The New York Times Company’s digital subscription revenue ($US226.8 million in the first quarter) is more than 50 per cent higher than its print subscription revenue. New Zealand publishers have a long way to go before they even reach the digital/print cross-over point but the change is inevitable. The challenge is in doing what the New York Times has done and make a viable business principally on the back of digital offerings.

Many still believe that replacing the print circulation numbers of old with a digital equivalent is an impossible dream. For some publications that will undoubtedly be the case, but not all.

It the United States, media group digital subscriptions are showing significant growth even if individual titles have differing fortunes.

And there are now a multitude of digital revenue models from which to choose.

Stuff already has a contributor model through which online readers can support the masthead by making voluntary monthly or annual ‘membership’ contributions. It is similar to the approach employed by The Guardian. It’s a bit like joining a club. The Spinoff follows the same model. To my mind, this promotes a feel-good attitude and perhaps even some sort of intellectual superiority. More importantly, it is a voluntary (perhaps even charitable) contribution that is not tied to access. Non-payers receive essentially the same content as ‘contributors’.

Those who apply such a model wear their social obligations on their sleeves. They do not want to deny access to content on economic grounds. However, paywalls do not preclude some free content. It’s fair to say that some paywalls are more permeable than others.

National Business Review and BusinessDesk both have rock solid paywalls. Each also has an irritating side effect. For NBR, it is an emailed newsletter that is also sent to non-subscribers who can’t read any of the stories highlighted in it (and aren’t prepared to pay $449 a year to do so). For BusinessDesk, it is my inability as an individual subscriber to print or copy any content in spite of forking out $249 a year to read it. What is more irritating about BusinessDesk is that I now get the ‘Best-of-BusinessDesk’ free in its Herald stablemate and can print or copy content to my heart’s content (as well as read e-editions of NZME’s regional stable).

Other media organisations have what I might call holes in the wall. Newsroom, for example, has a two-tiered system where Newsroom Pro subscribers receive additional (often offline) benefits, but the free base service is supported by sponsors including three of the country’s universities. And, of course, some content on the Herald website is outside the paywall.

Overseas, there have been various initiatives to meet the need for accessibility as a public good. In Portugal, for example, Publico offers free subscriptions to the unemployed while Sweden’s Dagens Nyheter has flexible subscription rates for young people and people in remote locations.

Dagens Nyheter is an interesting case. While in New Zealand flexibility is usually translated as paying weekly, monthly, or annually, the Swedish newspaper has a multi-faceted approach that included a metered system where you get so many articles free then must start paying, a premium model akin to that of the New Zealand Herald, and an ingenious system where the most accessed stories go behind the paywall a few hours after publication.

Across the ditch, The Australian isn’t a cheap read. While seven dollars a week doesn’t sound much, $A364 a year may turn some people off. Therefore, Rupert Murdoch throws in a full digital subscription to the Wall Street Journal and membership of The Australian Plus, which offers free e-books, live and virtual member-only events, and competitions.

It must be working. A Roy Morgan survey last month showed The Australian’s digital platforms increased readership by 11 per cent over the past year, more than three times the overall average rate of the nation’s online news mastheads.

NZME also uses the ‘but wait, there’s more’ approach by adding value. The trouble is, I suspect many people do not know it is there. For example, although I have been a Herald premium digital subscriber from the outset, I discovered only yesterday that I have free access to each day’s e-edition of the group’s titles. That includes not only the Herald and its weekend editions but also the group’s regional newspapers. Added value is a bit subtracted if you don’t know it is there.

Stuff has little to fear and something to gain by joining the paywalled media brigade. It can certainly pitch itself against NZME in terms of the breadth and depth of its offering. Importantly, it can – and should – spread the message that the news is not free. One way or another it must be paid for or it will wither and die.

There is also an upside for readers. If media want to capture and retain them as digital subscribers, they must offer real value for money. If they do not do so, the public will satisfy themselves with the new-look kid on the block, Goggle News New Zealand. It features (nominally free) stories from the country’s major news outlets, stories for which the producers receive a pittance.

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