The Reuters Institute has released its 2019 report on the state of pay models in online news, and the findings paint a bright picture for today’s digital-first publishers. It turns out, more publishers are putting up paywalls and making subscription revenue a key priority, even as digital advertising holds steady as a reliable source of revenue for news organizations around the globe.
In surveying more than 200 leading news organizations in seven markets in the U.S. and Europe, researchers found that usage of paywalls is increasing among online publishers, but the use of digital advertising also remains high. Despite the bulk of digital advertising revenue now being claimed by large technology companies, like Facebook and Twitter, 81% of news organizations still say digital advertising is a key source of income, followed by subscriptions (78%), and native advertising (75%).
Of all the revenue models tracked in the report, subscriptions seem to be growing the fastest. More than half of the executives surveyed in the Reuters Institute (52%) expect subscriptions to be their main revenue focus in 2019.
Looking more directly at major newspapers, Reuters Institute found that 69% of those organizations have paywalls of some kind, which is a slight increase since 2017.
The past 12 months have been a difficult time for legacy news companies, particular newspapers, as advertising revenue has continued to decline. Although fears about the potential of paywalls to limit access to quality journalism are widespread, the report found that those fears are not quite borne out. Hard paywalls are still rare, with just 3% of the organizations surveyed by Reuters Institute having hard paywalls on their websites, which prevent non-paying subscribers from accessing any content at all. What’s more common are porous paywalls or dynamic paywalls, which only go into effect once a visitor has read a certain number of articles each month.
For the study, Reuters Institute looked at the business practices of 212 news outlets, including newspapers, weekly newspapers, magazines, broadcasters, and digital-born news outlets.
Other key findings in the report include:
• 69% of the newspapers in the sample operated some kind of a pay model, which is a slight increase from 64.5% in 2017.
• Almost all digital-born news outlets (94%) in the survey say they offer free access to the news.
• Of those news organizations that operate some form of paywall, fees range from $2.25 to $46 per month. The average subscription price is $15.80 per month.
• Top newspapers and news weeklies in the U.S., Finland, France, Germany, and Poland were more likely to have adopted pay models than those in Italy and the U.K.
Key Takeaways for Digital Publishers
Digital publishers are asking what these findings mean for them, and how they can use the data from the Reuters Institute report to improve their own business practices.
For starters, the report’s analysis of average subscription prices lays a framework for publishers who struggle with deciding what to charge their readers for access. Given that the average subscription price in the survey is $15.80 per month, digital news outlets should be able to comfortably price their subscriptions at anywhere from $10 to $20 per month, depending on the volume of content they publish online.
With a growing number of publishers now charging readers to access digital news, publishers should feel even more comfortable launching their subscription programs and putting up paywalls. Just be sure not to put up a paywall without first cultivating a wider range of revenue sources. For example, selling native advertising, e-commerce products, and hosting live events. These were all cited as profitable strategies in the Reuters Institute survey.
If one thing from the report is clear, it’s that paywalls aren’t going anywhere. The strategy of locking down online content and requiring readers to pay for access is one that more and more publishers are adopting. The strategy is seeing particular growth in the U.S., where paywalls are far more common than in Europe.
To read the full report, Pay Models for Online News in the US and Europe: 2019 Update, click here.