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Pay To Read: Most media companies think it’s the future

Pay To Read: Most media companies think it’s the future
Editor in Chief of News 24, Adriaan Basson. (Photo: Gallo Images / Leon Sadiki)

As more online advertising revenue goes the way of internet giants like Google and Facebook, online news companies are searching for other income streams with many reverting to charging for news – as they did back when you still bought newspapers.

Like the Washington Post, Wall Street Journal, New York Times, Financial Times as well as South Africa’s BDLIve, Mail & Guardian and Biznews publications, News24 has introduced a subscription service on its in-depth news and analysis, a strategy it calls “Freemium”.

Breaking news, which is largely commoditised, will remain outside of the R75 per month subscription.

The new model was introduced on 8 August 2020 and while no take-up numbers have been disclosed (yet), News24 editor Adriaan Basson says he is pleased with the response from readers:

“Our expectations have been exceeded. The positivity from readers and community has been encouraging.”

Three or four years ago, virtually no media house charged for online news, with perhaps the exception of the New York Times, FT and Wall Street Journal. Now, the majority of online sites do – in one form or another.

Free to read sites like Moneyweb require membership to access archived content.

(For more on why Daily Maverick remains an outlier in this regard, read here.)

“There has been a sea-change in user understanding and behaviour over the past few years,” says Basson. “People accept that good journalism is worth paying for.”

Peter Vandermeersch, publisher at Independent News & Media, which produces The Irish Times, put it in simple language:

“Think about it. We’re bakers and we make croissants, and if you come to one door, our print door, you pay for the croissants,” he said. “But if you come to the back door, the digital door, we give them away for free.”

This enticing, yet unsustainable bakery deal is over, he says.

“From now on, also at the back door, we’ll ask the €2.50 a week for the croissants there.”

The year 2020 has seen people increasingly willing to pay for croissants made from real butter, rather than lard, a far from satisfactory alternative.

This fact became starker in the past few months as people were physically isolated by Covid-19 lockdowns. The role of responsible online media became even more vital as people searched for both accurate information on the pandemic – amid a sea of misinformation and fake news – as well as content that would lift their spirits in a troubled world.

Sites like News24 almost doubled their daily users (unique browsers), from 800,000 to 1.6-million, while Daily Maverick increased to between 300,000 to 500,000.

“The current coronavirus challenge only emphasises the indispensable role that media play in society today,” says Kirstine Stewart, head of Shaping the Future of Media, Entertainment and Culture at the World Economic Forum.

“With the value of content growing, the industry needs financial models that enable them to fulfil their social functions while still supporting widespread access to critical content. This can’t happen in isolation: It requires dialogue, including with regulators, to find solutions that balance innovation, consumer welfare and corporate responsibility of every stakeholder in the media industry.”

Amid the chaos wrought by Covid-19, The World Economic Forum published a survey Understanding Value in Media: Perspectives from Consumers and Industry, which documented the preferences of over 9,100 people in China, Germany, India, South Korea, the UK and the US relating to their media consumption, payment habits and preferences.

The results were revealing:

  • 96% of those surveyed read, watch or listen to news and entertainment
  • 23.6 hours are spent viewing media content during a typical week
  • 60% of consumers of global services are “engaged” (meaning they registered – whether free or paid)
  • 16% pay for news
  • 44% pay for entertainment
  • 61% of young people (16-34) pay for entertainment
  • 22% of over 55s pay for entertainment
  • Twice the number of young people (16-34) in Germany, the UK and the US are likely to pay for news than over 55s

The results are instructive for those determined to provide news that is trustworthy and accurate.

For one, low-income groups are less likely to pay for news services – a concern for anyone worried about the accurate dissemination of news.

In addition, less than half of consumers pay for news and entertainment, which means that leading media companies have to do everything they can to attract, and retain the population that is willing to pay.

On the positive side, while the proportion of people paying for content today is small, the report notes that future willingness to pay is rising. Globally, the proportion of people willing to pay in the future is 53% for news and 70% for entertainment.

Basson is aware that in South Africa, a large proportion of News 24’s audience may not be in a position to pay for content.

“We will never charge for breaking news. It is vitally important to get accurate news out there as soon as possible – this is the majority of our content. But there are readers who want to read more deeply, who will be willing to pay to read our columnists and in-depth articles.”

News24, which is the largest online news platform in South Africa, has an already sprawling advertising business, which it will work hard to retain. Advertising works on scale – the more “eyeballs” you have, the more compelling your advertising proposition is. But digital advertising is not enough to sustain newsrooms – as evidenced by the flood of closures over recent years.

The problem is the rise of “big tech” – companies like Google and Facebook, which now account for about 60% of all digital advertising spend, according to estimates from eMarketer.

Aside from drawing revenue away from media houses, big tech has also drawn the ire of the media industry by publishing (or allowing users to share), excerpts from news stories without sharing a fair portion of ad revenues.

“These companies have sophisticated software, and an army of developers and engineers that ensure that advertisers can target their audience in a highly sophisticated way,” says Basson.

“As an industry, we did not move fast enough to keep up with this ad technology. We have caught up as a company – but that ad spend has moved to these platforms and will not return.”

SA Inc. has a responsibility to support local media, “to hold power to account” he says. “We recognise that their money is going to the social platforms and it would be naive to stop them, but they could also contribute to the survival of good journalism.”

It is for this reason, he says, that News24 has adopted a two-stream revenue model, which includes subscriptions.

The model, he says, is not cast in stone. “There are many different models out there and we have seen globally that media houses adapt their strategies as behaviour changes. We will not be afraid to change our model or offer new features as we go.”

Because it’s a whole different world out there. DM/BM

Gallery

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