Insights, tools and research to advance journalism

Paying for Digital News: The rapid adoption and current landscape of digital subscriptions at U.S. newspapers

Newspaper publishers in the United States have moved rapidly in recent years to create subscriptions for digital access to their news, and according to an in-depth analysis the landscape is converging around a couple leading models and price structures.

As the traditionally dominant revenue streams of print and advertising come under pressure, almost all newspapers are looking to their readers to contribute more. As of 2015, 77 of the 98 papers we examined have some form of a digital subscription plan that requires readers to pay for unlimited online access.

Seventy-one of those 77 have been launched within the past 5 years.

Subscriptions_GIF

This exponential growth would have seemed unfathomable in 2009. Publications like The GuardianThe New York TimesTime Magazine and The Atlantic published op-eds questioning whether readers would be willing to pay for news online — and whether digital subscriptions would cause steep losses in readership and digital advertising.

As an American Press Institute research fellow, I catalogued and examined how newspapers are handling the push toward digital subscriptions. This analysis is based on independently gathering data about the models, launch dates and prices for digital subscriptions at U.S. newspapers. To make this detailed data-gathering manageable, we chose to include all newspapers with total circulations over 50,000 (a universe of 98 newspapers).1

The data is supplemented by interviews with news executives and a review of literature from academic and industry analyses.

What follows in this report is a comprehensive assessment of the state of digital subscriptions at U.S. papers.

This report shows how digital subscription models vary, by factors such as circulation size, geographic location, and ownership. It shows and explains newspapers’ rapid adoption of digital subscriptions and how the models and price points have evolved. The analysis identifies clear trends, diverging strategies, missed opportunities, and key questions about the future of digital subscriptions for the newspaper industry.

Among the study’s findings:

  • 78% of U.S. newspapers with circulations over 50,000 are using a digital subscription model
  • More specifically, 63% of the newspapers are using a metered model, 12% are using a freemium model, and 3% are using a hard model
  • The average weekly price of a digital subscription for newspapers varies by type of model: $2.97 for meters; $3.52 for freemium; and $4.43 hard models
  • The median number of free articles allowed by a metered model is 10 a month
  • Digital subscription plans are relatively less common at the largest papers. (86% of newspapers with a daily circulation between 50-100k use a digital subscription plan; 64% of the newspapers with circulations over 250k do so.)
  • Meter models are most prevalent in the Southeast (83%) and least common in the Southwest (45%)
  • Freemium models are 3 times more popular in the Southwest (36% of newspapers) than in any other region
  • Newspapers in the Northeast and Central United States tend to have higher digital subscription prices than those in other regions
  • Publishers seem divided on whether to charge extra to add Sunday print delivery to a digital subscription: 37 newspapers charged more for that, 25 newspapers charged less, and 13 newspapers charged the same price
  • When registering, new digital subscribers are not asked to provide information about their interests or demographics at any of the 77 newspapers with subscriptions
  • Innovative experiments include “survey walls,” the “public radio funding model,” micropayments, the Washington Post’s partner program, and “iTunes for news.”

The potential revenue generated by digital subscriptions is still murky at best. It is not clear whether digital subscriptions were mostly a “one-time” cash infusion that simply capitalized on the most loyal digital readers who were always willing to pay or if newspapers will be able to consistently persuade more people to sign up in years to come. Newspaper executives are hesitant to disclose financial details about digital subscriptions.

The following chapters dive deeper into explaining the current state of digital subscriptions, what has changed in recent years, the early origins, the data gathered (or not) about subscribers, and more:

  1. To identify newspapers with circulations over 50,000, this report used the Alliance for Audited Media’s (AAM) Monday – Friday total average circulation figures for the six months ended September 2014. These figures include print, digital, and branded editions. Based on AAM’s disclaimer that seven newspapers no longer report 5-day averages but typically had circulations in the top 25 in previous reports, those seven newspapers were also included in the analysis.

Digital subscriptions today

Among the 98 U.S. newspapers with circulations over 50,000, the American Press Institute found that 77 of them use a digital subscription model (79%).1 This figure is similar to the Newspaper Association of America’s recent analysis, which surveyed publishers and estimated that 75% of newspapers use a digital subscription model.

Publishers are converging around models commonly referred to as “metered” — in which a number of articles can be read before subscription is required — and to a lesser degree “freemium” — in which most content is free, but “premium” articles or sections require a subscription. The so-called “hard” paywalls, where subscriptions are required to access the vast majority of the website, are extremely rare and declining.

As the chart below shows, meters (used by 62 of the 98 papers studied) are by far the most common digital subscription model; so-called freemium sites (12) are more common than hard models (3). Among those papers studied, only The Wall Street Journal, the Honolulu Star-Advertiser, and Newsday employed a hard model. And 21 of the 98 newspapers do not require digital subscriptions to access unlimited digital content online.

Number of newspapers
Meter 62
Freemium 12
Hard 3
Not required 21

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

Notably, neither Cox Media Group nor Hearst Corp. are currently using metered models. Instead, each of these companies uses a freemium model with sister websites. That is, readers are allowed to access the traditional newspaper’s website. However, that website mainly contains wire stories, brief local stories, weather, classifieds, and other non-proprietary content. Proprietary content is hosted at a sister website, which only digital subscribers are allowed to access. Cox Media Group has announced plans to switch all of its newspapers to a metered model.

At least one newspaper company is not requiring users to purchase digital subscriptions – Advance Publications Inc., which owns The Cleveland Plain Dealer, The Star-Ledger in Newark, N.J., and The Republican in Springfield, Massachusetts. Instead, Advance has focused on a “digital first” strategy designed to maximize its digital audience by making all content free, while at the same time reducing its print production to lower costs.

Are certain types of newspapers more or less likely to use digital subscriptions? Anecdotally, it has been noted that local newspapers may be best positioned to require digital subscriptions. Our data supports this, as 86% of newspapers with circulations between 50,000 to 100,000 have launched digital subscriptions, the highest percentage. These papers likely feel that they produce local, proprietary content that cannot be found at national news outlets. At the other end of the spectrum, newspapers with a circulation size over 250,000 are least likely to use a subscription model, with 64% doing so.

Circulation size Percent
50,000 to 100,000 86%
100,000 to 250,000 80%
More than 250,000 64%
Overall 79%

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

Does the circulation size of a newspaper influence its digital subscription strategy? Our data suggests that it does. Among newspapers with a circulation over 250,000, meters are the most popular strategy, followed by not requiring a digital subscription at all. This largest category of newspapers is also the only one where hard paywalls exist at all.

Among newspapers with a circulation between 100,000 and 250,000, the most popular strategy is also a meter model. But in this group, 20% of newspapers used a freemium model, which is the highest percentage of any circulation size.

Newspapers with circulations between 50,000 and 100,000 were most likely to use a meter strategy (74%).

Notably, newspapers with circulations between 50,000 and 100,000 were 50% more likely to use a meter model than newspapers with circulations over 250,000.

Hard Freemium Meter Not required
50,000 to 100,000 0% 12% 74% 14%
100,000 to 250,000 0% 20% 60% 20%
More than 250,000 12% 4% 48% 36%

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

The belief that local newspapers are well suited to succeed in the digital environment is part of what Warren Buffet said motivated his BH Media Group to purchase 70 newspapers. In 2013, Buffett explained why he believes digital subscriptions are necessary and his interest in purchasing local papers:

[Publishers] have offered their paper free on the Internet while charging meaningful sums for the physical specimen. How could this lead to anything other than a sharp and steady drop in sales of the printed product? … Charlie [Munger] and I believe that papers delivering comprehensive and reliable information to tightly-bound communities and having a sensible Internet strategy will remain viable for a long time.

According to Terry Kroeger, president and CEO of BH Media Group, the eventual goal for all of the newspapers owned by BH Media Group is to utilize metered digital subscription models.

In addition to being more likely to have a digital subscription, smaller newspapers in the study typically allow fewer articles to be accessed for free in their meter. Overall, the median number of free articles in a metered model was 10; for newspapers with circulations between 50,000 to 100,000, however, the median was 6.5. Below we chart the median number of free articles by circulation size.

Number of articles
50,000 to 100,000 6.5
100,000 to 250,000 15
More than 250,000 10

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

How much do digital subscription plans usually cost today? Here, it is important to recognize that, at many newspapers, the price of a subscription varies depending on the subscriber’s address. According to a recent analysis by the Newspaper Association of America, 51% of newspapers “charge different rates for different demographic or geographic characteristics.” For this study, if a ZIP code was required to receive a price quote, the ZIP code of the newspaper’s headquarters was used. To standardize the data, the American Press Institute focused on the standard weekly price of a digital subscription (excluding any introductory specials).

According to our data, newspapers charged an average of $3.11 a week for a digital-only subscription and $3.29 for a digital subscription + Sunday print delivery. At the extreme ends of the pricing spectrum, the most expensive plans belong to the Omaha World Herald ($6.25 digital & $8.74 to include Sunday print) while the least expensive plans belong to the Daily Gazette in Schenectady, N.Y. ($1.25 digital & $1.50 to include Sunday print).

Our data shows that the type of model may influence the cost of a digital subscription. The average weekly price of a digital subscription for newspapers using a meter model is $2.97. For freemium models, the price increases to $3.52. And for newspapers using a hard model, the average price jumps to $4.43.

Average digital price
Hard $4.43
Freemium $3.52
Meter $2.97

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

These pricing strategies may in part reflect how much each model impacts a newspaper’s digital audience size. A hard model is most likely to reduce the amount of online readers, pageviews, and digital advertising revenue, so the paper needs more revenue from each remaining reader. Papers using a meter model may feel that their digital advertising revenue is not impacted as steeply, which allows them to charge a lower subscription price. 

Another factor is that the few papers with hard paywall models are all in the largest circulation group, and the data shows that larger papers tend to charge more for any kind of subscription. Comparing the average weekly price of a digital-only subscription, newspapers with circulations between 50-100k had an average price of $2.95, those in the 100-250k group had an average price of $3.20, and those in the 250k+ group had an average of $3.41.

Price
50,000 to 100,000 $2.95
100,000 to 250,000 $3.20
More than 250,000 $3.41

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

Are papers in certain geographic areas more likely to use certain types of digital subscription models or prices? To explore these questions, this study divided newspapers into five major geographic regions.

According to our data, digital subscriptions are most prevalent in the Southeast (92%) and Midwest (86%). At the other end of the spectrum, papers in the Northeast (62%) and West (75%) are less likely to use digital subscriptions. Combined with our previous findings on circulation size, these findings likely reflect that large newspapers on the West coast and East Coast are less likely to use digital subscriptions.

Digital subscription No digital subscription
Northeast 62% 38%
West 75% 25%
Southwest 82% 18%
Midwest 86% 14%
Southeast 92% 8%

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

The type of digital subscription is also correlated with geographic region. Hard models were only found in the West and Northeast regions. In the Southwest, 36% of newspapers with circulations over 50,000 utilized a freemium model — a rate nearly 3 times greater than any other region. Meters were the most common model in every region — but especially predominant in the Southeast (83%) and Midwest (76%). In contrast, only 46% of newspapers in the Northeast and 45% of newspapers in the Southwest use a meter model.

Date Hard Meter Freemium Not required
Southeast 0% 83% 8% 8%
Midwest 0% 76% 10% 14%
West 6% 56% 13% 25%
Northeast 8% 46% 8% 38%
Southwest 0% 45% 36% 18%

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

While the five regions were useful in showing geographic trends, we analyzed pricing differences at a more granular level. We calculated the average weekly digital subscription price for each of the 9 divisions used by the United States Census Bureau. We found that the two most expensive regions were both in the Northeast: New England ($4.56) and the Middle Atlantic ($3.71). The third and fourth most expensive regions were in the central United States: West South Central ($3.62) and West North Central ($3.50).

Subscriptions_Price

 

We were also interested in exploring how newspapers choose to bundle digital subscriptions with the Sunday print newspaper.2 Here we found a distinct divide in pricing strategies: 37 of the 77 papers studied charged more to add Sunday print to a digital subscription; 25 papers charged less; 13 charged the same price.3

Bundling digital access with a Sunday print edition at no extra cost (or even at a discount) allows newspapers to increase Sunday print penetration levels and capitalize on advertiser insert revenue.

But clearly some newspapers believe that bundling digital and Sunday print should cost extra because of the value of their newspaper. To these newspapers, bundling for free does not reflect the value or cost of producing their work.

The strategies about how to price Sunday print delivery when bundling with digital access varies significantly for papers of different sizes and regions.

As the chart below shows, it costs extra to add a Sunday print to a digital subscription at the majority of newspapers with circulations between 50,000 to 100,000 (51% do so) and 100,000 to 250,000 (62%).

In contrast, among newspapers with circulations over 250,000, only 27% charge more for Sunday delivery. While there are only modest differences, the larger the circulation group, the more likely newspapers are to make a digital-plus-Sunday bundle cheaper than digital alone.

Date Costs more Same price Costs less
50,000 to 100,000 51% 19% 30%
100,000 to 250,000 61% 4% 33%
More than 250,000 27% 33% 40%

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

The region of a newspaper also seems to influence how a paper bundles Sunday print to a digital subscription. Majorities of newspapers charge more to add Sunday print to a digital subscription in the Midwest (65%), Southeast (62%), and Southwest (56%).

Newspapers in the Northeast use differing strategies. Newspapers in the West are the most likely to reduce the price of a digital subscription if Sunday print is added. Only 18% of papers in the West charge more to add Sunday print.

Compared to newspapers in the West, papers in the Midwest, Southeast, and Southwest are over 3 times as likely to charge extra to add Sunday print.

Costs more Same price Costs less
Midwest 67% 6% 28%
Southeast 59% 5% 36%
Southwest 56% 33% 11%
Northeast 33% 27% 40%
West 18% 36% 45%

Data Source: American Press Institute independent review of newspapers with circulations over 50,000

American Press Institute

These findings illustrate that 78% of newspapers with circulations over 50,000 use some kind of digital subscription model. The most common digital subscription strategy is the meter model.

However, our data also shows that papers in different regions or circulation sizes are using different subscription models, price points, free article limits, and bundling price strategies.

  1. Data was collected during the summer of 2015.
  2. The Wall Street Journal and Investor’s Business Daily are excluded from this portion of the analysis.
  3. The Arkansas Democrat-Gazette offers not only Sunday but all 7-days home delivery at the same price as a digital subscription.

How digital subscriptions took over

In 2009, with advertising revenue steeply declining, news organizations began debating the feasibility of requiring digital subscriptions.

Publications like The GuardianThe New York TimesTime Magazine and The Atlantic published op-eds questioning whether readers would be willing to pay for news online — and whether such subscriptions would cause losses in readership and digital advertising.

Despite these initial concerns, the number of newspapers requiring digital subscriptions has grown rapidly. Consider that in 1997, The Wall Street Journal was the only one requiring a digital subscription among all the newspapers with circulation today over 50,000. By 2010 still only 6 such newspapers were, according to our data. By 2015, 77 of the 98 newspapers with total circulation of 50,000 or more are utilizing a digital subscription model.

Subscriptions_GIF

Number of newspapers with a digital subscription Number of newspapers with no digital subscription
1997 1 97
2001 3 95
2009 5 93
2010 6 92
2011 20 78
2012 52 46
2013 74 24
2014 78 20
2015 77 21

Data Source: American Press Institute independent analysis of newspapers with circulations over 50,000

American Press Institute

As the data illustrates, 2012 was a pivotal year for digital subscription plans. The number of digital subscriptions increased to 52, which signifies that a majority of the newspapers in our dataset were using digital subscriptions by the end of that year. As a consequence, we analyzed how digital subscriptions have changed in the three years since then.

Comparing subscription models in 2012 to 2015, there is a clear trend toward metered models and away from hard models. The number of newspapers using meters increased by 21, freemium models increased by 8; meanwhile, the number of hard models decreased by 4. As we detail later in this report, the success of The New York Times metered model in 2011 likely helped shape this trend.

2012 2015
Meter 41 62
Freemium 4 12
Hard 7 3
Not required 46 21

Data Source: American Press Institute independent analysis of circulations over 50,000

American Press Institute

The increase in the number of meter and freemium models is mostly attributable to newspapers launching new digital subscriptions. However, several newspapers have also changed from one digital subscription model to another in the past three years.

As meters became increasingly prominent, four newspapers switched to a metered model. The Florida Times Union and the Daily Press in Newport News, Va., switched from a hard model to a metered model. The Omaha World Herald and Boston Globe switched from a freemium model to a metered model. Articulating the common sentiment behind such changes, the editor of The Boston Globe explained in a memo that “the universal belief is that we can bring even more paying readers to the site with a meter.”

Publishers are often unsure how their audience will react — or what the ideal number of free articles and price points will be.

At the same time, four newspapers ended their digital subscription plans without replacement: in 2013, the San Francisco Chronicle ended its freemium subscription; in 2013, The Dallas Morning News ended its hard subscription1; in 2014, the Philadelphia Inquirer ended its hard subscription. The Albuquerque Journal ended its hard model in 2012 for a different reason: to focus on requiring non-subscribers to complete micro-surveys (a shift detailed in a different chapter).

For newspapers that have continued their digital subscription plans, many have experimented to find the right model. Publishers are often unsure how their audience will react — or what the ideal number of free articles and price points will be.

To illustrate the trend, we compared each newspaper’s initial weekly digital subscription price to the current price. The analysis revealed that 32 newspapers have increased their prices, 21 have kept their prices the same, and 17 have decreased their prices.2

We also wanted to compare these newspapers based on when they launched their digital subscription models. So we grouped newspapers by the year they launched their model, and calculated the median weekly prices for each group.

By doing so, we see that the initial launch price since 2012 has gone up. Moreover, subscription plans launched recently appear to be higher than previous years.

Year launched Initial price Current price
1997 $1.40 $7.25
2001 $1.75 $4.89
2009 $3.98 $2.35
2011 $2.87 $3.44
2012 $2.58 $2.81
2013 $3.13 $2.65
2014 $2.98 $3.94

American Press Institute

Similarly, we compared the initial number of free articles to the current number of free articles.3 Of the newspapers analyzed, 23 have reduced the number of free articles, 14 have kept it the same, and 5 have increased the number of free articles. Thus, it is rare for a newspaper to increase the number of free articles after their launch date.

The number of free articles has also decreased since 2012. Consider that in 2012, 26 newspapers allowed 15 or more free articles. Today, only 13 newspapers do so, despite there being 21 more metered models.

  1.  It plans to launch a new digital subscription plan in 2016.
  2. The original digital subscription price for 7 newspapers could not be determined. These newspapers are excluded from this portion of the analysis
  3. Gannett newspapers do not disclose how many free articles they allow, so their papers are not included in this portion of the analysis

Early digital subscription models

In the 1990s and 2000s, most newspapers were hesitant to charge for content. Publishers feared that if they were the only newspaper charging for content, readers would simply shift to alternative sources. A few newspapers in the United States, however, adopted digital subscription plans before any others.

These are the stories of those early models, and how they took shape.

The Wall Street Journal

In January 1997, the Wall Street Journal began charging consumers $50 a year (less than $1 a week) for digital access, becoming the first major newspaper in the United States to require a digital subscription.

In April 1998, the paper announced it had surpassed 200,000 digital subscribers. The Wall Street Journal passed 1,000,000 subscribers in November 2007.

Despite this success, other newspapers were hesitant to emulate the hard subscription model of the Wall Street Journal. To begin with, the Journal was “business read” for audiences, something necessary for people’s jobs, rather than local or community based “civic read.” In addition, some readers may have charged the subscription to their work. Newsday based on Long Island in New York was a notable exception to the group that thought the Journal model was unique; it launched a hard subscription model in October 2009. The strategy had difficulties. After three months, it was reported that Newsday had only signed up 35 digital subscribers. At the time, this lack of success was seen as validation that daily newspapers should be hesitant to require a digital subscription.

Albuquerque Journal

In 2001, the Albuquerque Journal became one of the first local newspapers to require a digital subscription for unlimited digital access, with print subscribers receiving free online access. Donn Friedman, assistant managing editor at the time, wrote that he believed in the “authoritative content model.”

“Readers need what you [newspapers] have to offer,” he said. “And if you stop giving it away for free, they will pay for it.”

He went on to explain that the Albuquerque Journal’s model only allowed non-subscribers to access summary articles and classifieds, in essence, a “hard” model.

In 2009, it was noted that the digital subscription model might have limited the newspaper’s inbound links from Google.

In 2012, the Albuquerque Journal adopted a new approach for creating revenue from digital readers — rather than being required to subscribe, non-subscribers are instead required to answer 1-3 questions from Google Consumer Surveys to access content. Google pays the Journal for every answer (e.g. a nickel for every answer). Below is an example of the popup that non-subscribers encounter when they access digital content.

ABQ Survey

In two years, Friedman declared that the Journal doubled its online traffic, and noted that the model “takes advantage of what newspapers already have, which is an engaged and intelligent audience.” This model helped inspire the Columbia Missourian to implement a similar model in 2014. Digital First Media has also experimented with Google Consumer Surveys.

Arkansas Democrat-Gazette

In 2001, the Arkansas Democrat-Gazette began requiring a digital subscription, with print subscribers receiving free online access.

The reasoning behind it, according to the paper’s publisher Walter Hussman, was to prevent readers from abandoning the newspaper’s print version. If the news content was available for free online, the newspaper feared that its readers would read the online stories and drop their print subscriptions — which would decrease print advertising revenue. Therefore, the newspaper created a freemium website — only subscribers had access to the premium local news on their website.

Since then, the Arkansas Democrat-Gazette has been praised for retaining much of its print subscribers. For example, between 2000 and 2010, while most U.S. newspapers experienced sharp circulation declines, the Democrat-Gazette was able to increase its print circulation by 3.2 percent. Their digital subscription model continues today.

The New York Times

Perhaps the most watched model, however, was the New York Times, whose role as a national and local newspaper, and one not largely focused on a single topic (ala the Wall Street Journal and business), made it more similar by degrees to other papers. The Times implemented its first digital subscription in 2005 when it walled off specific columns from non-digital subscribers. But between 2005 and 2007, 2 percent of users were willing to pay directly for content. It’s “TimesSelect” attracted just 227,000 paying customers. At the same time its free news content was drawing 13 million unique visitors a month according to Nielsen/NetRatings.

The Times ended the experiment in 2007 to increase its audience size and advertising revenue. In the first month after The Times removed TimesSelect, the opinion section of The Times’ website doubled its traffic and gained new advertisers such as American Express.

In 2011, after significant study, The Times launched a subscription model that had rarely been used in the United States. The Times implemented what is referred to as a “metered model.” The “meter” allowed readers to access a certain number of free digital articles before facing barriers. Non-subscribers initially had access to 20 free articles per month. That number was reduced to 10 in 2012.

[The New York Times model] minimizes any potential losses in readership and maximizes the potential for digital advertising revenue.

The model has been increasingly emulated. One appeal is that only core readers, who are the most likely to purchase a digital subscription for unlimited access, are prodded to subscribe. Another is that casual readers are not scared away. This minimizes any potential losses in readership and maximizes the potential for digital advertising revenue.

In the first three months, The Times garnered 224,000 digital-only subscribers. By the end of 2012, The Times had nearly 600,000. In August 2015, the Times surpassed 1 million digital-only subscribers

Despite a wide swath of initial skeptics, the meter was soon seen as a massive success that other newspapers imitated.

By the end of 2012, 41 of the 98 newspapers studied had launched metered subscription models, 7 more “hard” models, and 4 freemium models. At that point, however, almost half the papers in the sample, (47) were still entirely free online.

 Model Number of newspapers
Meter 41
Hard 7
Freemium 4
Not required 46

Data Source: American Press Institute independent analysis of circulations over 50,000

American Press Institute

For newspapers that launched a digital subscription in 2011 or 2012, the median weekly price was $2.30. As the chart below shows, the most common weekly price point was between $2 or $3. However, 8 newspapers charged between $3 to $4 and 4 newspapers charged over $4 a week.

Price Number of newspapers
$1.00 to $2.00 12
$2.01 to $3.00 20
$3.01 to $4.00 8
$4.01 to $5.00 4

Data Source: American Press Institute independent analysis of circulations over 50,000
Note: Data was unavailable for three newspapers.

American Press Institute

Looking at how many free articles the metered models allowed, the most common number was 15 followed by 20. These relatively high numbers illustrate that newspapers feared upsetting readers if the number of free articles was too low. As we explained previously, a majority of these newspapers have since reduced the number of free articles.

Number of articles Number of newspapers
5 4
10 7
15 14
20 10
More than 25 2

Data Source: American Press Institute independent analysis of circulations over 50,000
Note: Data was unavailable for four newspapers.

American Press Institute

The influence of The Times as an early model, and the industry’s growing consensus around the metered model today, may be explained in part by research showing that when launching a new digital subscription plan, publishers mostly just consult their peers. Researchers at the University of Missouri School of Journalism found that 85% of publishers consulted with other newspapers before implementing a plan. However, only 29% conducted focus groups and only 28% tested the digital subscription with a subset of users.

In contrast, The New York Times invested heavily in learning from its audience how it should implement the metered model. Tim Griggs, who was the executive director of cross-platform monetization at The Times during this time period, has explained that The New York Times spent a year to study and test how to market the digital subscription.

They learned that their readers “want to be romanced … They wanted to just be aware of the paid model and what it meant to them and to be able to manage their free articles.” This understanding led to the Times creating a counter at the bottom of the website that showed visitors how many free articles they have remaining, and influenced how they marketed digital subscriptions to online readers.

Missed opportunity of registration data

Today, news organizations are striving to convince advertisers that their first-party data (information collected from users on their website) is more valuable than third-party data from Facebook or Google.

To understand how newspapers are approaching this challenge, the American Press Institute analyzed what user information is collected when a person registers for a digital subscription. Our analysis found that basics like name and email are always required for a digital subscription, but no newspaper asked about interests, education, or income.

While digital subscriptions have typically referred to monetary exchanges, consider that in August 2015, Time Inc. CEO Joe Ripp explained that “We are testing various iterations to see how we can push you from an anonymous user to a registered user. … Payment could simply be you sharing data with us, so we can know more about you.”

Indeed, while Time Inc. is changing Entertainment Weekly’s website to a metered digital subscription model, it is also funneling users to create accounts. After 10 free articles, if a customer registers, they are allowed to read 5 more articles for free. This encourages more people to register while emphasizing how many articles they are reading.

Payment could simply be you sharing data with us, so we can know more about you.

When a user registers, they answer questions about their coverage interests. This information will be used for consumer research and advertising. Thus, this approach encourages users to register and collects data to provide a better product to consumers and advertisers.

The CEO of Piano Media (which acquired Press+ in September 2014 and merged with Tinypass in August 2015) has previously explained that publishers can use data to “inform a range of activities including advertising targeting, subscription-offer pricing and configuration, the merchandising of digital subscriptions and even decisions about how to allocate limited resources to create content.” This type of data encompasses the demographics of users, what their interests are, and what content they consume.

While data from a newspaper can be combined with data from Facebook or Google for the purposes of selling digital ads, newspapers also could collect that demographic information themselves. For example, as Digiday recently detailed, the Financial Times asks registered users to provide their industry, role, and job title. It then charges advertisers 20-50% more to advertise to readers who identified themselves as C-suite executives, financial advisers and other high-value professions.

However, of the 77 newspapers with digital subscriptions that the American Press Institute examined, no newspaper asked about the subscribers’ interests, profession, or education.1

Some newspapers may worry that asking for more information would slow down the signup process and cause some people to not complete it — a valid concern but one that might be alleviated through better design and user testing. Other papers may simply have not thought to ask for this additional information and have not anticipated the value of such data.

For whatever reasons, to register for a digital subscription most newspapers only require your payment information, name, email, address, and phone number, as detailed in the chart below.

Type of data Percent
Name 100%
Email 100%
Address 94%
Phone 75%
Display name 17%
Gender 17%
Birth year 16%
Date of birth 1%
Housing type 1%
Title 1%
Interests 0%
Profession 0%
Education 0%

American Press Institute

As Frédéric Filloux has discussed, reader data can also allow publishers to provide customized content that channels the reader towards specific news coverage or ancillary benefits. For example, if a reader works in the legal field, coverage of judicial proceedings or opportunities to attend events featuring the legal beat writer could be emphasized. More broadly, a publication could also realize whether their coverage matches the interests of their audience base.

While no newspaper that the American Press Institute examined was similar to the Financial Times in terms of requesting user information, the Tribune Publishing Co. is channeling users toward creating more registered accounts.

Reader data can also allow publishers to provide customized content that channels the reader towards specific news coverage or ancillary benefits.

Tribune uses what could be called a “premium metered” model, which may persuade more readers to create user accounts.2 On the newspaper website, article headlines may contain a “premium content” symbol. Readers are required to create a free account to access any premium content. After users read 5 premium articles, they are required to subscribe to read additional premium content that month.

By doing so, these newspapers are better able to identify if a person uses multiple devices (such as a work computer, home computer, and mobile device). Without registration, such a user might be analyzed as three different people. Moreover, they have the contact information of a greater proportion of their digital readers, which can allow them to market special introductory offers towards them.

Lastly, consider that Steve Goldberg, managing editor at Empirical Media, argued that the value of registered data is diminished because publications have too few registered accounts. “For almost all publishers, the best they can do is use it as a filter in addition to — versus as a replacement for — third-party data,” Goldberg said. “One of the challenges is that paywall subscribers tend to be a small fraction of the overall audience.”

By funneling users toward creating registered accounts, and collecting more detailed information about their demographics and interests, publishers can increase the value of their digital subscriptions to both readers and advertisers.

  1. The Oklahoman did ask for a title (such as Mr., Dr., etc.).
  2. Tribune Publishing has announced plans to change its digital subscription strategy in 2016.

Future models for digital subscriptions

Digital subscriptions reached a high point in 2015. In August, the New York Times reported that it had passed the 1 million paid digital subscribers mark. Digital magazine Slate announced that it is creating a metered subscription for international readers, and the technology news site Pando announced that it will now require digital subscriptions to access articles. Even YouTube may soon require a subscription to access exclusive content from its most popular video channels.

One key question facing publishers is: how much money is left to gain? In the first year or two after launching a digital subscription plan, a publisher captures a large share of people who were already willing to pay for digital access. But going forward each new subscriber must actively be won, converted, persuaded. The prospects for long-term growth rates in digital subscription revenue are unclear.

The prospects for long-term growth rates in digital subscription revenue are unclear.

As a result, newspapers are increasingly trying to provide more value to digital subscribers. In some cases publishers even define their program as “membership,” which entails a range of benefits and privileges, not just access to content. Newspapers may offer unlimited access to mobile apps, loyalty discounts to events and retail products, and opportunities to interact with columnists at live events — a potential source of revenue for publishers.

Indeed, the Newspaper Association of America recently estimated that 29% of newspapers offer customer loyalty perks such as these. However, there is a wide disparity between newspapers with smaller circulations compared to newspapers with larger circulations. For newspapers with circulations under 25,000, only 16% reported that they offer such benefits. In contrast, 67% of newspapers with circulations over 200,000 do so.

Percent
Industry overall 29%
25,000 and under 16%
25,001 - 50,000 40%
50,001 - 100,000 35%
100,001 - 200,000 57%
More than 200,001 67%

Data Source: Newspaper Association of America’s 2015 Circulation Facts, Figures & Logic

American Press Institute

In addition to this type of added value, several newspapers or publications are experimenting with new types of digital subscription revenue or models. Below, we briefly highlight some of the most unique experiments:

Google Consumer Surveys (the “survey wall”)

Rather than paying money to access news content, what if consumers could instead support a publisher by answering a short marketing question? Paul McDonald, a Google employee, came up with the idea of a “survey wall” in “a quest to save the newspaper industry.”

After a certain number of clicks on the publisher’s website, a pop-up blocking content asks consumers to answer a survey question in order to read the article. The publisher decides what actions trigger the pop-up and how many questions to ask. The questions, meanwhile, are created by brands that pay 10 cents for each question answered — Google keeps 5 cents and the publisher gets 5 cents. This program was launched in 2012.

[Google Consumer Surveys] can generate incremental revenue from online readers who would be unwilling to subscribe.

Despite the lofty ambitions of its creator, Google makes clear to publishers that Consumer Surveys is not a magic bullet. Still, it can generate incremental revenue from online readers who would be unwilling to subscribe and only takes a couple of hours to install. The program is described as “an additional way to monetize your site.”

Newspapers prominently using this feature include the Oklahoman and the Albuquerque Journal. Exact revenue figures are rarely disclosed — for example, the Columbia Missourian said that the revenue from Google surveys was “significant … like replacing the revenue that an additional ad rep would bring in each month.” However, the Erie Times-News estimates that after joining the program in 2012, its annualized revenue is around $200,000. And Lorain County Printing and Publishing estimates monthly revenue from the program is $10,000 to $14,000.

Salt Lake Tribune (the voluntary membership model)

Managers at the Salt Lake Tribune were hesitant to launch a digital subscription plan, believing that it would reduce web traffic. At the same time, they recognized that digital advertising was not generating enough revenue from their digital audience.

In July 2015, the Salt Lake Tribune balanced these concerns by launching a digital subscription model that was unique in two ways. First, while readers who have clicked five stories are shown a pop-up with membership details, they can click “no thanks” and continue reading stories at no charge. Terry Erme, in an editorial, noted that “unlike those other papers that require payment to read online, we still offer every reader a free website with the latest news. But only premium members to sltrib.com will have access to the website without commercial interruption.”

Secondly, prospective members can opt to receive invitations to a series of events hosted by the newspaper for $4.99 or choose to receive the invites and be shown an advertising-free website for $9.99.

Explaining how the latter option would impact digital advertising revenue, Erme wrote: “We anticipate that a small percentage of our online readers will become members, and that the effect on advertising will be minimal. However, even a small percentage of readers signing up will have a significant impact on our newsroom budget.”

After about three months, nearly 600 people had signed up for the membership program. Comparing the two plans, 90% of members opted for the ad-free option. NPR Utah described this approach as the public radio funding model — it’s voluntary and it comes with perks.

Washington Post (the partner program)

Seeking to expand its national profile, in May 2014 the Washington Post launched its Digital Partner Program. In this program, newspapers can partner with the Post to give their subscribers an access code for a free digital subscription to the Washington Post.

For a newspaper to participate in the program, no money is required. Instead, both partners benefit: The Washington Post expands its reach into new markets and the partnering newspaper offers subscribers additional value at no cost (the Post’s digital subscription normally costs $100).

Both partners benefit: The Washington Post expands its reach into new markets and the partnering newspaper offers subscribers additional value at no cost

By October 2014, 165 newspapers had signed on to partner with the Washington Post. In a random survey of 1,300 consumers using this program, which was conducted by the Washington Post, 92% of respondents said it added value to their local-paper print subscription. Moreover, 64% said the access made them more likely to continue their print subscription for the next six months.

In November 2015, I spoke with Steve Hills, then the Washington Post’s president and general manager, about this program. He explained that the program had grown to 308 newspapers and represented a continued effort to build the Washington Post’s audience. Through the Partners program, Facebook Instant Articles, Apple News, and Kindle Fire, the newspaper is committed to “giving readers a chance to sample content and then building news habits.”

In addition to reaching more consumers, Hills explained that the relationships with other newspapers have value as well. For example, in the future the Post could license out Arc, its content management system, or Clavis, its recommendation system. Already having a network of newspaper partners would help facilitate that process. Additionally, it is always in conversation to explore other opportunities for partnerships with newspapers in this network.

Winnipeg Free Press (micropayments)

In May 2015, the Winnipeg Free Press, a Canadian newspaper, began allowing users to access articles through micropayments on their website, making it the first North American news outlet to do so. The newspaper offers two plans — unlimited digital access plus an optional Sunday paper for $16.99 per month or a pick-and-pay model that charges readers 27 cents per article. Readers who do not participate in one of these programs are allowed to read only two articles in 30 days.

In December 2015, I spoke with Christian Panson, vice president of digital content, about why they chose this innovative approach and their results thus far. He explained that their digital subscription strategy was unsustainable for two reasons: 1) they weren’t generating enough digital revenue and 2) they had very little data about their digital audience.

To address these issues, they transitioned into requiring consumers who read more than two articles to register an account or log in. Ultimately, they registered 180,000 user accounts and lost only 2% of web traffic.

This new user data allowed them to redesign their website to create custom recommended content. It also helped them determine that a large segment of their digital audience is returning users who would likely avoid purchasing a monthly subscription. Instead, they would read the maximum number of free articles allowed each month. A typical metered model would not generate revenue from these users who would view the first 10 articles as free, but the 11th as costing $15. To generate revenue from this audience and reduce their financial commitment, they decided to introduce micropayments.

Because the micropayment plan was launched at the same time as a site redesign, it is difficult to isolate the impact of only one of these initiatives. With that caveat, Panson explained that since the micropayment strategy was launched:

  • Pageviews declined by 24%, which is in-line with metered models. Additionally, no exceptions were made for users arriving from search or social media. In terms of engagement, they lost portions of their least valuable audience.
  • Overall, pages per session increased by 87%. Average desktop users increased from 6 to 9 pages, average mobile users increased from 3 to 8 pages, and average tablet users increased from 5 went to 14 pages.
  • Time on site increased by 124% and average engagement per page increased by 20%. Both are at all-time highs.

According to Subscription Insider, as of last month, Free Press had sold about 150,000 articles, for revenue of $40,500.

Blendle (the “iTunes for news”)

Blendle, a Dutch start-up that aims to simplify how people pay for news online, was created by Alexander Klöpping to address a common problem: convincing young internet users to pay for journalism online.

In December 2015, Blendle announced it is launching a beta version in the United States in 2016.

In The Netherlands and Germany, Blendle has signed up about 650,000 users — roughly half of the users are under the age of 35 — and about 20% of users have paid for articles. Blendle has “proven that we can get young people to pay for high-quality journalism — as long as they don’t bump into paywalls or ads all the time, don’t have to register for every website, only have to pay for the articles they actually read and can get their money back if they don’t like a story” Klöpping said in a press release.

Millennials, he believes, want a platform that allows them to easily find, access, and pay for the best stories from a variety of news publications — which would normally require subscriptions to several different outlets. Blendle is designed to serve as the platform that aggregates news stories and allows users to pay for select stories through micropayments, like iTunes does for music.

Each publisher sets their own prices and receives 70% of revenue, with Blendle keeping the other 30%, which is similar to the Apple store. Users are able to receive a refund on any article that they did not like and articles appear without advertising.

The articles that sell better are analysis pieces and interviews, rather than a random hot take on something that Donald Trump has said.

According to Klöpping “The articles that sell better are analysis pieces and interviews, rather than a random hot take on something that Donald Trump has said.” A senior editor at Blendle recently compared the five best selling stories in Germany on Blendle to the five most refunded stories and noted that well-researched stories were rewarded and clickbait was penalized.

Indeed, the American Press Institute recently found that 40% of Millennials are already paying for news content out of their own pocket and that the best predictor of their willingness to pay was their broader beliefs about the value of news. Young adults who want to stay connected with the world, who are interested in news, and who are more engaged with news on social networks are the most likely to be willing to personally pay for news. These survey results and Blendle’s popularity in Europe suggest that Millennials are willing to pay for quality journalism.

However, as Rick Edmonds of the Poynter Institute pointed out, in The Netherlands and Germany, hard subscription models are prevalent. In the United States, Blendle faces a significant obstacle, because “there is an abundance of material behind metered paywalls, which makes it relatively easy for users to access individual articles for free.”

Asked about these challenges, Klöpping argued that “you don’t know what you may be missing that’s behind (hard) paywalls, and I expect we will be seeing them more and more” in the United States. This report challenges that assertion. Hard digital subscriptions are increasingly rare, and we found no evidence that they will be making a resurgence.

The road ahead

Fifteen years ago, the only national or regional newspapers charging for online access were The Wall Street Journal, Albuquerque Journal, and Arkansas Democrat-Gazette.

Today, 78% of the newspapers analyzed by the American Press Institute do so.

From membership plans that include live events, to “survey walls”, to micropayments, or advertising-free options, newspapers are innovating new ways to monetize their digital audience.

Whether one of these experiments will eventually become an industry norm is unclear. But as newspapers continue adapting to the economics of the digital environment, creating and studying fresh approaches like these is critical.

Digital subscription plans are not the solution to the steep advertising losses impacting the newspaper industry — but digital subscription plans combined with other approaches may offer a sustainable revenue plan for the future.

Need to Know newsletter

The smart way to start your day

Each morning we scour the web for fresh useful insights in our Need to Know newsletter. Sign up below.

The American Press Institute

Our mission

We help transform news organizations for an audience-centered future.

Our programs for publishers focus on four things:

  • 1. Understand your audience
  • 2. Get your audience to pay
  • 3. Transform your culture
  • 4. Do your best journalism
  • Find out more about API »

API solutions for publishers

What we can do for you

API offers a suite of original tools and services for solving the biggest challenges in news:

  • Decide what beats to cover and how
  • Identify and develop the skills you need
  • Assess and improve your culture
  • Drive more reader revenue
  • Drive loyalty through accountability journalism
  • Make analytics work for you
  • Contact us to find out how »