Newspaper publisher Gannett made news itself this week by announcing that it will implement paywalls, or subscription-based sites, for its 80 local newspapers. Gannett’s flagship brand, USA Today, will still be free online. For the local papers, website visitors will be able to access five to 15 articles monthly for free. After that, a subscription will be needed to download content.
The decision to erect paywalls by Gannett is bold. In a time when economic uncertainty remains among consumers and free information is abundant on the Internet, shifting to a pay-for-use model may seem risky. Gannett looks to success of national papers The Wall Street Journal and The New York Times, which have “metered access” in place- giving away some content but restricting access to most articles to subscribers. Transitioning to a subscription-based model entails a trade-off of creating subscription revenues versus devaluing the newspapers’ online reach (and appeal to advertisers) as fewer page impressions will occur when unlimited free access ends.
Can Gannett’s subscription-based model succeed? Sure it can. But, one condition must be satisfied… and it is a biggie. The content that Gannett previously gave away must have sufficient value to justify readers paying for it. Two attributes that can be at odds with one another, depth and timeliness, will be important for Gannett’s local products to contain. Quality journalism in the form of long-form feature stories as well as content exclusive to online subscribers are two ways to enhance depth of information. At the same time, subscribers will expect a pay site to offer up-to-date news in an environment in which “developing story” and “breaking news” are reported hourly in broadcast media.
Whether migration to a subscription-based model works for Gannett will come down to a simple marketing tenet: Product value must justify the selling price. The key to success is not so much persuading readers to accept a pay model (although that will be important) as delivering great content that people will pay to have.
Digiday - "Gannett's Paywall Gamble"
Labels: Gannett, Pricing, Products