‘Paywall is not a panacea’: publishers seek more nuanced alternatives

As the paywall debate rages on in somewhat blunt, binary terms, some are coming to conclude a news business model doesn’t have to be either/or.

Francois Nel, director of the Journalism Leaders Programme at University of Central Lancashire, hosted Paywalls And Partnerships, a panel discussion I joined at university’s journalism school on Thursday, to debate some more nuanced ideas (watch the video). Here are some choice observations from the panelists…

Martha Stone, director of WAN-IFRA’s Shaping the Future of the Newspaper programme

“Ask your audience, are they willing to pay? Once you get those results, you have to start doing some math – and decide is it worth it to go through all that trouble, to piss off a lot of people, and come up with cents on the dollar of what you could get with other revenue streams?”

Gordon Crovitz, ex WSJ publisher, now founder of news strategy consultancy Journalism Online

“We think most publishers will pursue the freemium strategy – perhaps 90% of visitors will remain accessing for free. But the question is, what level of access wil the most engaged 10% pay to receive? That (proportion) could be a very substantial amount of new revenue. Many sites that have moved to the freemium model have found no loss in ad revenue and, in fact, some have had an increase in revenue because advertisers are delighted to reach readers who have paid a premium.”

Frederic Filoux, Schibsted’s international editor and MondayNote writer

“The very DNA of the internet is that content has to be free … but you can add up other services that might be paid for. You can have a basic search engine but you can ask your audience for €1 a month for a much deeper search archive.”

Peter Bale, MSN UK executive producer

Comparing online news’ predicament with big packaged software: “The publishing industry has effectively become an open source environment and you’re being challenged in the same way software makers are now.” Responding to WSJ managing editor Robert Thompson’s recent assertion that Google (NSDQ: GOOG) News is “promiscuous“: “Promiscuity is an inherent part of the web.” And on the either/or of ad-supported or paid-for: “I believe it’s not impossible to serve those two groups equally well and still produce a quality product … (but we must) stop advertising being commoditised in the way it has over the last few years.”

Everyone agreed with him. We’re moving to a belief that reaching “quality” readers for advertisers, through targeting, can either suffice in itself or can augment a paid strategy in a broad mix of models. That’s the belief at Mirror Group Newspapers’ anti-SEO 3am.co.uk and, even at regional papers, was the bullish belief offered by Lancashire Evening Post editor Simon Reynolds, who, during a newsroom tour he gave to us on Thursday, said he has stopped wanting to amass any more unique users just for the sake of it…

Crovitz said a pay wall may even assist an ad-supported model, despite the loss of many readers. “I believe there’s a 30% premium on ads behind the paywall. In a world of proliferating inventory, advertisers are looking for some sign of (quality).”

Stone: “We need to deliver content to people not pages – and we can do that because we have information about our readers. Behavioural targeting fetches sometimes 10 times or more the usual CPM, which is in the dumper. We need to embark on a very robust long tail strategy.”

Bale: “A lot of the conversation about paywalls is a smokescreen because what we’re really talking about is ARPU (average revenue per user). He called on news publishers to emulate mobile networks, which have monthly billing relationships with their customers and so can track their spend accurately.

Stone: “In the end,you’re going to need a number of revenue streams, no matter how you slice and dice it. The paywall is not a panacea.”