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July 20, 2016, 1:40 p.m.
Business Models

Here are 6 reasons why newspapers have dropped their paywalls

Sometimes it’s a response to a public emergency; sometimes it’s just to build audience.

The New York Times launched its metered paywall in 2011. Since then, newspapers across the United States have followed the Times’ lead by introducing their own digital subscription programs. Of the 98 U.S. newspapers with circulation higher than 50,000, nearly 80 percent have some sort of paywall, according to an American Press Institute study published earlier this year.

But once those paywalls are up, what causes outlets to pull them back down? Between 1999 and May 2015, newspapers eliminated their paywalls 69 times, according to a study out this week by University of Southern California professor Mike Ananny and USC Ph.D. candidate Leila Bighash. (The authors say they came to this figure by finding public mentions of the decisions to drop paywalls, so they admit that their analysis could miss some of the times newspapers changed how they charge for online access.)

The decision to drop a paywall can provide insight into how a news organization’s “values intersect with its commodification strategy, its technology design, and its brand identity” as outlets of all stripes are still deciding how much their reporting should cost:

Whatever the motivations and mechanisms, when news organizations drop, suspend, or otherwise open up their paywalls, they change the commodification of online news. Content that was previously considered valuable enough to charge for becomes free because, for the different reasons described here, news organizations think it should circulate freely. The commercial press sometimes, briefly, looks similar to a public service broadcaster, providing access to all (albeit still with advertising).

Of the 69 instances paywalls were dropped or eliminated, there were 41 times that news outlets dropped them only temporarily; the other 28 times, papers made the decision to permanently reduce or eliminate them. Ananny and Bighash were able to categorize these changes in paywall strategy into six different scenarios.

Here are the reasons why publishers drop their paywalls, according to the study:

Public emergencies

As Hurricane Sandy barreled toward the east coast in October 2012, papers such as The New York Times and The Wall Street Journal temporarily dropped their paywalls. In the wake of the Boston Marathon bombings in April 2013, The Boston Globe, along with the Times, the Journal, and The Washington Post eliminated all or part of their paywalls.

The study found 21 such instances of paywall drops for emergencies. In 2011, Jim Roberts, then The New York Times’ assistant managing editor of digital content, described the paper’s responsibility to offer “service information…somehow transcended journalism.” But an outlet’s decision to lower a paywall fully or in part — the Journal, in 2013, only made stories about the Boston Marathon free, for instance — and when they decide to reinstate the paywall can highlight the news organization’s principles:

Such drops and reinstatements are significant because, when news organizations change their paywalls in response to public emergencies and natural disasters, they leave clues about who they think their publishing impacts, what they assume their audiences need, how they see themselves as public services, and when they judge one set of circumstances as sufficiently different from another to warrant a change in news commodification.

Planned special events

On eight occasions, news organizations dropped their paywalls for events such as elections or the Olympics. In 2012, the Financial Times, The New York Times, and The Wall Street Journal provide free coverage around Election Day. More recently, the FT got rid of its paywall on June 23 when the United Kingdom voted to leave the European Union.

Again, the study says these decisions provide insight into an outlet’s news judgement:

When news organizations drop their election paywalls, they leave clues about what kind of public service they think they should be during elections — what types of coverage are publicly significant enough to be free. And when news organizations drop paywalls for some sports coverage but not others, they reveal which audiences they value, and which events they see as entertaining enough to potentially earn them more advertising over subscription revenue.

Wider access

There were 12 instances when newspapers ditched their paywalls in order to provide free access when it suited themselves or their own agendas. In 2014, for example, the Times gave away a week of free access to its NYT Now app to promote National News Engagement Day. (That same year the Times made NYT Now free to use for all users after there wasn’t enough interest in the subscription app.) The Los Angeles Times in 2004 put its events calendar behind a paywall, but after traffic fell by 97 percent, the paper undid the move:

These examples suggest a class of paywall exceptions when news organizations themselves decided to offer free content, and offered reasons for doing so — stating the kind of public services they see themselves providing, and the cross-subsidies they see among their content.

Advertising and promotion

Publishers also eliminated their paywalls for sponsorships or location-based partnerships. The L.A. Times dropped its paywall for three days in 2014 after it redesigned its site, showing advertisements only for Etihad Airways. The Atlantic similarly got rid of its paywall and gave Goldman Sachs exclusive advertising rights. In 2013, The New York Times partnered with Starbucks to give readers accessing the Times from Starbucks wifi 15 free stories per month. The authors found six instances of these types of deals.

Audience development

The researchers found 17 times when newspapers dropped their paywalls explicitly to grow their audiences. In 2014, Automotive News (where I used to work) dropped its paywall over the course of the North American International Auto Show in Detroit in order to promote its new international product.

Last year, the Financial Times introduced reduced price paid trials to try and attract new subscribers. Users can try out full access to the FT for $1. (Or €1 or £1.) FT CEO John Ridding recently said the paper made the switch to try and build habits among readers.

“I think the one word I would put out there would be habit, because why we did it was ultimately about recreating the connection and the habit that people used to have in the print world,” Ridding told Ken Doctor. “You get on the train in the morning and read the paper.”

Experimentation

There were also 11 times news organizations eliminated their paywalls as they tried to figure out the best way to charge for their journalism.

The Toronto Star dropped its paywall in 2015 when it launched a new tablet app. The Dallas Morning News has gone through a number of different iterations of a paywall. It first launched a hard paywall in 2011, then in 2013 made its main site free while creating a paid premium site. It scrapped the premium site the next year, calling it “a nine-month experiment that didn’t work.” (It’s since put up a new paywall, but during the recent police shootings there, it directed users to a free beta version of its site.)

“These experiments — their design, success criteria, and the reasons they ended — suggest an ongoing rationale for many paywall drops: learning how and why to configure paywalls in ways that align with an organization’s mission, strategic plans, and audience dynamics,” the study said.

The full paper is available here, in the International Journal of Communication.

Photo of a man hammering away at the Berlin Wall in November 1989 by Gavin Stewart used under a Creative Commons license.

POSTED     July 20, 2016, 1:40 p.m.
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