Canadian Newspaper on Paywalls: ‘They Work When They Have Great Content Behind Them’

The Globe and Mail’s editor-in-chief, John Stackhouse says the paper’s paywall is showing results.

Speaking at the World Editors Forum in Bangkok on June 4, Stackhouse, told the conference that the paper’s paid online readership is growing and that that 90 per cent of readers who sign up for a 99-cent, month-long trial end up paying the full subscription price—$20 a month—for unlimited online access, according to Journalism.co.uk.

“Paywalls work when they have great content behind them,” the British journalism website quotes him saying.

As newspapers struggle to find a viable business model in the online marketplace, the debate over whether to charge readers for content or give it away for free—hoping to reach more readers and get more advertising dollars—has been intense.

Some newspapers have changed track multiple times. The New York Times initially charged readers for access to its website, before opening it up for several years. In 2011, that paper implemented a metered paywall.

According to Stackhouse, while The Globe and Mail’s online readership dropped 40 percent when the paywall was implemented last October, paid online readership is now increasing.

The paper currently has 90,000 paying online subscribers, and Stackhouse has said that “tens of thousand” of those are online-only.

While the online advertising market is growing, most of that money isn’t going to newspapers. Online advertising revenue in Canada was $3.2 billion in 2012, according to a Pricewaterhouse Coopers report released on June 5, which predicts that the market will grow to $6.4 billion by 2017.

According to the Global Entertainment and Media Outlook 2013-2017, 40 percent of those advertising dollars went to search.

But while the amount of money spend on online advertising is growing, it’s not growing fast enough to replace declining print advertising and even online, rates for individual ads are declining. Which has newspapers looking for additional sources of revenue.

“Although the potential for advertising opportunities is apparent, the main challenge remains in creating meaningful revenue from this activity,” the PwC report says.

And the trend towards paywalls appears to be gaining steam in Canada. In addition to The Globe and Mail, Canada’s two largest newspaper chains, Postmedia and Sun Media, have both begun using paywalls and the Toronto Star, which has experimented with other revenue models, such as branded content, plans to implement a paywall later this year. (Full disclosure: I’ve freelanced for both the Toronto Star and The Globe and Mail.)

But while paywalls have lead to drops in unique page views, Stackhouse has said that paying subscribers tend to be more engaged.

Stackhouse told the editor’s conference that subscribers visit the site “10 times more, spend 179 percent more time per visit and consume 179 percent more content,” according to the conference blog.

But not everyone’s getting on board, Montreal’s La Presse, the fourth largest newspaper in Canada by circulation, has bet heavily on giving away its content for free.

The French-language daily recently spent over $40 million developing an iPad edition and hired over 220 people to work on the digital version. The paper hopes to charge a premium to deliver enhanced advertising content through the digital edtion. Guy Crevier, La Presse’s publisher told attendees at the same conference that the move to free is “inevitable.”