Industry Insight: ‘Paywall’ to ‘Membership’ Will Require a Massive Culture Shift for Newspapers

By: Matt DeRienzo
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Paywalls

Call it a crisis. Call it an opportunity for fundamental culture change.

Just as newspapers reach the endgame of Paywall 1.0—short-term and print-centric—the need to develop a consumer revenue strategy with an upside for growth has become urgent.

Digital advertising is threatened by the rise of ad blockers, pushback against the privacy-invading tracking of programmatic technologies, and a previous collapse of CPM rates thanks to the rise of programmatic and a flood of inventory.

The problem is that, with a few notable but unique exceptions (the New York Times, the Wall Street Journal), the newspaper industry still isn’t getting readers to pay for online content.

Newspaper paywalls are almost entirely built upon “bundles” with print. Few companies talk about how many readers have purchased purely online subscriptions, because the numbers are staggeringly low. Nor would they like to publicize the percentage of print subscribers who bother to activate the login for the online portion of their bundle.

Bundles weren’t about monetizing online content as much as getting more money out of print subscribers. It allowed companies to boost consumer revenue for a few years, or at least keep that revenue flat—a victory in itself. But print’s inevitable decline and the failure to build an online-only base of consumer revenue put publishers back to square one.

So what if publishers tore down their walls and built communities around their content and mission instead?

That mission of local journalism has an altruistic element to it, regardless of business model. (The Philadelphia Inquirer’s recent—and seamless?—switch to nonprofit status should be noted.)

On a good day, it’s not that much different than the type of service a National Public Radio station provides. Is it that much of a stretch to think that a base of readers would support local journalism with an NPR-style membership program?

A voluntary membership model could turn an adversarial relationship on its head. Instead of “We’re putting up this paywall so you stop freeloading,” we’re partnering with you to keep doing the work you care about.

And in many ways, the NPR model represents Membership 1.0, something newspapers could take to the next level. Stations typically know the names and addresses of their donors and how much they’ve given over the years, and little more. What if you got to know everything about your most loyal readers, and they were giving up that information voluntarily instead of it coming from a creepy tracking of their Web browser history?

If you knew the issues they cared most about, you could even go back with crowdfunding campaigns around specific reporting projects you know they’d be likely to support. If you knew their favorite local brands, you could deliver them sponsored content that they would actually welcome rather than be trying to block or avoid.

Perhaps membership is a partial solution to the problem with online story comments. Put them in a special whitelisted category because you know they’ve—literally—bought into the community you are trying to build around those conversations about local news.

Find out what expertise your members might have and integrate that information with the newsroom’s database of potential sources. Send members an originally written—not just scraped website headlines—daily newsletter that puts them behind the scenes and includes them in the process of local journalism at every step.

Most newspapers would need a major reset to make this work, with independent, family-owned businesses having the easiest transition. It would have to start with transparency. This is our mission, and how we think it’s important to you and the community. These are the resources we put into it and roughly how much it costs. Tell us what we’re getting wrong.

If publishers want readers to identify with and support their brand so much that they’d voluntarily contribute, they will have to genuinely, intentionally, actively and consistently listen to them.

That’s going to mean a loud and immediate wake-up call about all aspects of user experience and customer service. They’ll want the popup ads, Google surveys and lousy mobile sites to go away. It doesn’t mean publishers can’t make the case for some of that, or explain the transition they’re in, but they can’t just ignore the sentiment if they ask for that dialogue.

They shouldn’t be ignoring those sentiments anyway. The consumer revenue base of tomorrow—or lack of one—is going to be “voluntary” regardless. Who wouldn’t take a relationship trust and sense of shared mission over “pay to unlock this content we haven’t convinced you that you need?”

 

Matt DeRienzoMatt DeRienzo is a newsroom consultant and a former editor and publisher with Digital First Media. He teaches journalism at Quinnipiac University and the University of New Haven in Connecticut, and is interim executive director of LION Publishers, a trade organization that represents local independent online news publishers.

 

Published: March 18, 2016

One thought on “Industry Insight: ‘Paywall’ to ‘Membership’ Will Require a Massive Culture Shift for Newspapers

  • March 22, 2016 at 12:30 pm
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    Newspapers are poised to evolve membership into a Big Data model that takes advantage of new tools to solicit information about audiences. The New York Times is obviously way ahead of everyone, but the Texas Tribune is innovating and aggressively pursing membership as a larger piece of revenue. The question will be if newspapers know the right people to hire – membership is more about managing and understanding data and then taking that information to create a curated content experience.

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