NewsBeat

December 2015 NewsBeat 7 Forsgren says they're realizing the meter is too high. The site recently relaunched as a responsive design, and the meter will be reduced to 10 with digital subscriptions at 99 cents for the first four months and then $4.95 a month. The paper also plans to offer day passes in the future. Print subscribers of the Erie Times-News were offered complete access to GoErie.com, but Forsgren says only about 20% registered. So, by implementing the pay meter, they have discovered that digital-only subscribers are a new, unique audience, he says. Forsgren declined to say how much the Erie Times-News spends on its pay wall system, but says it is a "blunt investment" to identify users. Not investing in understanding audiences sets publishers up for failure, he says. "There's a fear that print is going away, and that digital would make print decline faster because it was cheaper," he says. "Many thought pay meters would save the circulation decline, but it hasn't stopped the loss of print subscribers. [Publishers must] set value for something they're giving away for free. They'd never give the paper away for free." Like the Erie Times-News, the Rutland Herald in Vermont does not have much competition in its area, but took a different approach in implementing its pay wall in October 2010. The goal was to establish a value to content and equality for print and digital. The Rutland Herald and its sister publication, the Barre Montpelier Times Argus, have hard pay walls, using Clickshare's software, says Rob Mitchell, editor and online manager. Breaking news, letters and obituaries remain free. Subscriptions are $4.29 a week for a print- digital bundle, $3.49 for digital only and a $1 day pass, with bundles of five, 10 or 20 available. The Herald's print circulation is about 10,500 and the Times Argus' is 5,500. Combined, they have about 45,800 online users. In the first year of the pay wall, online users dropped 40%-45%, but it's now at about 95% of what it was before the pay wall, Mitchell says. Mitchell says his company pays $1,000 for pay wall software and 3.9% of subscriptions. So far, revenue from the pay wall has been in the low seven digits. "It's not been revolutionary, but it has been a difference maker," he says. While he says user data has been an unexpected benefit of the pay wall, Mitchell admits that they have not made much use of it. "We want to proceed carefully on how to track and treat customers," he says. Revenue prospects and misconceptions By December 2012, the McClatchy Co. had an established pay meter across its newspapers, says Chris Hendricks, the company's VP of interactive media. Using Press+, McClatchy papers offer subscriptions ranging from $6.95 to $9.95 a month. Across all of its 29 daily papers, desktop meters are set at five articles per month, and mobile devices are set at 15, Hendricks explains. Hendricks declined to say how much McClatchy spends on its pay wall systems, but says subscriptions via pay meters added $30 million to the company in 2013, the first full year of companywide implementation. He says that it has been "highly profitable" and not disruptive to print volume, digital audiences or advertising. Instead, the company has been able to capitalize on its most loyal users. "The meters take a look at audiences and patterns and create a win-win," he says. "We went to a pay wall for a practical standpoint: revenue. We believe customers will pay for value." Hendricks says the concepts of pay walls tended to "spook" publishers in the beginning because many incorrectly believed there was a one-size-fits-all approach. Publishers also incorrectly believed that pay walls would save the industry, he says. "A big misconception is that simply metering your current content is the solution for paid content," says David Arkin, VP of content and audience at GateHouse Media, which also uses Press+ software for its pay meters. "We believe and are developing a strategy to place premium content behind the meter, providing more incentive to those who want full access to all the local content we produce. The other misperception is that if you meter your content you are going to lose a lot of page views." Arkin says when GateHouse implemented pay meters at its daily papers, there was a 5%-7% loss in online traffic, along with ad impression revenue. Desktop meters are currently set at five to 15 articles per month, and mobile are set at 10. Subscription rates range depending on the individual paper. He declined to say how much the pay wall system costs the company. "It's a complicated metric because the industry is seeing audience transitioning from desktop to mobile at the same time," he says. Finding the path to premium Understanding Web traffic — unique visitors and page views — along with how many of those visitors are hitting the pay wall allows publishers to make the best decisions about the number of free articles to provide without negatively impacting traffic, he explains. "The trend continues to be experimentation — changing meter levels, hard-walling some content, adding premium club-like incentives to pay for content and trying to get paid through survey services," he says. "The industry has not solved this yet, but will find a balance that makes sense. The industry will be successful in getting people to pay for content, but the greatest value — and revenue — will come to companies that figure out how to create content that truly is premium." Arkin says a pay wall is not a "magic bullet." While it helps grow revenue, most importantly it reinforces value of content. (He declined to share how much revenue the company has generated from pay meters.) This year, he says GateHouse is focused on data collection and management. Piano Media's Leach says pay walls do not impact a site's casual visitor and a majority of Web traffic never triggers the pay wall. Instead, it targets the most loyal consumers, and the ability to gather information on these individuals and use it to publishers' advantage is the next big step. She says revenue generated from digital subscriptions varies based on type and setup of pay walls, pricing, content, how compelling digital products are and if there is an integrated strategy for print and digital products. "I have yet to meet a publisher that isn't pleased to be generating the incremental digital revenue and to diversify their digital revenue beyond just advertising," she says. But, the key with pay walls remains developing a strategy that takes into account a newspaper's content and audience. "There was a great rush six, seven years ago to publish everything we produce online, and free and open to all," Arkin says. "That helped build audience, but we are still building a model — with advertising, the meter and other programs — that can sustain the newsrooms needed to produce quality local content for print and Web. Again, developing premium layers, experiences and values is going to be critical to driving a successful digital subscription strategy." — Reprinted from NetNewsCheck

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