Now that Facebook and Google have taken over advertising, traditional media are looking to reader revenues to sustain journalism. This leaves us with a couple of big questions without a clear answer: how many people are prepared to pay for news? And how much will they pay?
Last week, we got a couple more data points that help. But we still don’t know if the answer, to both questions, is “enough”.
The industry has taken some quiet confidence from the success of The New York Times in building a viable income base out of digital subscriptions. This showed a soft paywall could be a pathway through the crisis of declining advertising revenues.
For the optimists, then, there was more good news with the report that The Washington Post had also broken through the 1 million-paying-subscriber point, although it still trails the NYT at about 2 million.
For the pessimists, there was the reporting of digital subscriptions for US “regional” papers that service states or major cities — the sort of papers we’d call metropolitan newspapers. The largest of these papers, the LA Times, reported that its digital subscriptions were 105,000. The Boston Globe was in second place with about 90,000. Numbers fall away quickly after that, with the Chicago and Minneapolis papers next on 50,000.
These are not small communities. The LA Times is the dominant paper in southern California, with a population about the same as Australia. It leads global coverage in significant sectors, including film and popular culture. (I once met an LA Times journalist with what I reckon is the best job in the world: “Super Hero Correspondent”.)
Newsonomics.com’s Ken Doctor concludes from these figures that digital subscribers are currently about 2% of (non-paying) unique monthly views. So, he says, the NYT‘s’ 97 million unique visitors translates to its 2 million digital subscribers.
That’s great for these global voices, but not so much for papers that service particular regions — even regions the size of southern California.
This is not really comparing like with like; “unique visitors” measures readers while “subscriptions” measures payments. Doctor concedes the number of actual visitors might be lower as unique audience numbers are boosted by individuals using multiple devices. And “subscriptions” underestimates total paying readers because multiple readers could share one subscription, either within individual households or workplaces.
Nonetheless, as a rule of thumb, it gives us some sense of the potential of the subscriber market.
In Australia, both Fairfax Media and News Corp have followed the US papers in introducing soft paywalls that allow free access to a finite number of articles each month.
As a result, according to their own end-of-year commentary, Fairfax claims about 236,000 paying digital subscribers across The Sydney Morning Herald, The Age and the AFR. The Nielsen Digital Ratings indicate that the SMH and Age online have a monthly unique audience of about 6.2 million people. That’s a ratio of about 4%.
In their end-of-financial-year commentary, News Corp claimed digital-only subscriptions of 360,000, mostly for The Australian and the Herald Sun. Nielsen ratings suggest unique views of about 12.5 million, mostly registered on the non-paywalled news.com.au. That’s a ratio of about 3%. If we break out what we know about The Australian, we can estimate that they have a ratio on their own of about 5%.
These subscriptions numbers come from internal company data, so we’re taking them on trust.
The glass-half-full says that these Australian ratios show that the Australian media are out-performing the US media in converting casual online readers into paying subscribers.
The glass-half-empty says the better you’re doing now, the harder it is to keep growing. Do these figures show we’ve started at a higher floor? Or do they show that the Australian media subscriptions are just closer to the ceiling?
There’s one more lesson the Australian media can learn from these US figures: the success of The Washington Post in breaking through the million-subscriber barrier came off the back of investment in journalism. For over a year now, it has become a must-read in the age of Trump — not for its opinions, but for its news.
In Australia, on the other hand, both Fairfax and News have foreshadowed that this year, just like last, they’ll be cutting their costs, and that means they’ll be cutting their journalism.