Monday, October 15, 2012

The Globe and Mail announces metered paywall; use "me-too" rationale for decision, readers react as expected

Canada's largest national newspaper, The Globe and Mail, today announced that they will be launching a metered paywall starting on October 22.

The move is not unexpected, and the reasons used by the editor John Stackhouse are typical of papers going behind a paywall: everybody is doing it.

The Globe and Mail, only second behind the Toronto Star for largest circulation in Canada, is often referred to as Canada's paper of record. Because of this, it has a decent chance to succeed with its paywall. But readers are reacting very negatively to the news, with well over a thousand comments posted to date, very few of which are positive, or even sympathetic to the move.

"Some of the world’s largest and most respected media outlets have successfully introduced a similar model, and we look forward to the benefits it will enable us to deliver to our readers and advertisers," said Phillip Crawley, publisher of The Globe and Mail.

The paper in their own news report on the move, quotes Barclays analyst Kannan Venkateshwar as stating that the "increase in circulation revenues from the company’s digital paywall is now meaningful enough to offset the decline in print advertising."

(Like most analysts, Venkateshwar doesn't know what he is talking about as this simply has not been the case as even papers showing increases in digital circulation revenue are still showing overall decreases in revenue overall. But the financial community is pushing hard on getting papers to build paywalls, so his quote shouldn't come as a surprise.)

The paper, in its videos and own news story, are pointing to other paper's experience with paywalls in justifying its more. The editor, John Stackhouse, mentioned the NYT and WSJ, as well as papers in Germany. The story, written by media reporter Steve Ladurantaye, also mentions the Postmedia Network, quoting their CEO Paul Godfrey as saying "You can’t spend millions of dollars on content and just give it away."

The Globe and Mail's new plan will be called Globe Unlimited and will cost readers $19.99 (CAD) a month after a one month trial of 99 cents. Casual readers will be able to access ten articles a month free of charge before running into the paywall.

Like most paywalls, savvy web users will likely be able to bypass the paywall through direct links derived from search engines and social media.

So far the story on the Globe's site has generated over 1,400 comments, a huge number by the paper's standards. While the vast majority of readers are claiming that they no longer will be reading the paper online, two other opinions are also being heard. One group of readers are lamenting the fact that a paywall will limit the conversations between readers seen in the current website. Another is that the website will no become more of a club, which they see as a positive (out with the rabble!)

My position on paywalls has still not changed since the launch of TNM: I think they are a pretty safe bet when used on the websites of financial newspapers where the reader has a financial stake in the news and information contained on that site, and where the expense can often be written off; a bit less of a good bet on big national newspapers, but still likely to succeed; a bad bet where readers do not feel the news is vital to them such as metro and local papers.

Nothing in the numbers I've seen seem to contradict this: the WSJ and Financial Times are doing well with their paywall strategies, and the NYT is being marginally successful. Other papers have claimed success, but often their own measurements show that while they are experiencing some increase in circulation revenues, the growth is not compensating for continued declines in ad dollars.

Many newspaper executives are hoping their paid circulation efforts will help them avoid their real problems, declining ad revenue. Many digital first and paid content advocates have gone so far as to proclaim that paywalls might lead to their papers ending their dependence on advertising altogether. Layoffs generally ensure.