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May 20, 2014, 11:29 a.m.
Business Models
LINK: www.inma.org  ➚   |   Posted by: Joshua Benton   |   May 20, 2014

Sandy MacLeod, VP of consumer marketing and strategy at The Toronto Star, writes in a piece for INMA about where paywalls are headed. It’s unclear! But he sees the meter petering out (emphasis mine):

So has the jump to a paywall made a significant difference for newspaper companies? It sure has for The New York Times, The Wall Street Journal, and a few others. But for the majority of North American newspaper publishers, the move to a paid digital content strategy has worked on some fronts and not so well on others. Clearly, bundling print and digital offerings together has opened a new revenue stream for many publishers. In some cases it has resulted in a nice, one-time lift in revenues…

However, the majority of the new cash generated has some link back to the print legacy business. That means the move has been a great short-term success for many, but unless the new cash is wisely used to develop new, longer-term revenue streams, the revenue bump will quickly fade. The number of digital-only subscribers generated by newspaper publishers in North America is small. In most cases, the volumes are 5% to 10% of their print circulation and a fraction of 1% of their total unique visitors. At the same time, the price charged is usually 20% to 25% of a traditional print subscription…

I believe that over the next 24 months we will see the legacy meter model (yes, legacy only after two years) fade into the background. In its place we can expect to see new alternatives emerge, such as premium sites, tablet experiments, new smartphone developments, and creative concepts that we’ve not yet even imagined. As well, we might likely see in the next year or two innovations around the idea of selling content memberships rather than newspaper subscriptions.

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