PR clients should take notice of the shift and lean into it
by Tristram Clayton and Dwayne Alexander
With the premium media model and paywalls, your company story is now usually behind lock and key. Why is this good for your business (and media consumers) in the long run?
For the past two decades the long-term survival of the traditional news media has been an open question.
With mobile internet and smartphones revolutionising the delivery of news, the century-old business model of many news organisations has systematically been destroyed. The mass migration of advertising to tech giants such as Facebook, Google and Amazon has hammered revenues - and across the world resulted in layoffs, takeovers and closures.
The main solution – subscriptions – simply didn’t cut it. Why would people pay for their news when there was always a free alternative?
For many media observers, the seeds of the crisis were sown in the early days of the internet era when newspapers rushed to go online. To attract the new online ‘eyeballs’, most made the fateful decision to give their costly product away for free. Where, for more than a hundred years, people had happily paid a few cents or even a couple of bucks for their morning news fix, suddenly the brave new world of internet news meant every article, feature and hard-won investigation was theirs for nought.
By the time news execs realised online advertising returned only a fraction of the old classifieds ‘golden goose’, and then saw the tech giants siphon off what was left, readers had become so accustomed to ‘free news’ there was no tempting them back for love or ad-free money.
This general deterioration of standards because of resource shortages in media also created a situation where headlines became sensationalist “link juice” and were often distorted by writers to entice and drive readers into the publication – even if the article itself was well-informed and balanced.
To make matters worse, with the rise of online subscriptions for everything from films (Netflix) to music (Spotify) to wills (Footprint NZ), consumers quickly started suffering from “subscription fatigue.” Paying for their news was at the bottom of a long list of priorities.
But then something unexpected happened – the proportion of people saying they were willing to pay for their news slowly started to rise. So too did the number of people actually putting their money where their mouth was and signing up.
The reason why is three-fold:
· From subscription fatigue to subscription normality. Over time, people’s reluctance/aversion to continually increase the number of services and products they pay for by subscription has diminished. Subscriptions are the new norm and will continue to grow. One survey predicts that by 2023 around 75% of purchases will be made through a subscription. So where consumers were once hesitant, they now see convenience. This means signing up to a news media organisation simply isn’t the hassle or leap-of-faith it was.
Matt Martel, the Managing Director of BusinessDesk, says overall, the most important factor for those who subscribe is the distinctiveness and quality of the content. “Subscribers believe they are getting better information. Our aim [at BusinessDesk] is to provide content that is simply better than anyone else. It needs to be different to what the rest of the news pack is covering and we need to contextualise and add value. We see quality news as an essential business tool and that’s what our marketing focuses on. The plan is to make $249 a year feel really cheap. We also make it very easy to cancel subscriptions.
“Importantly, we do not accept programmatic advertising, which is a race to the bottom for publishers and advertisers. Quality journalism, which takes time and is expensive, needs to be paid for somehow. Having said that, BusinessDesk is always happy to remove the paywall for specific articles, particularly after the story is a day old.”
· Quality and convenience. In line with consumers’ acceptance of the subscription model has come increased quality and convenience expectations. Whole families used to happily watch a Sunday night film dragged out to almost twice its original length because of a five-minute ad break every ten minutes; now the idea of even a single mid-programme ad is problematic. So, where Netflix has helped create the ad-free, high-quality expectation, the news media has benefitted. A reader’s favourite news site isn’t quite so attractive when bogged down by ads and where half the (most interesting) articles are behind a pay wall. If signing up means an easier, cleaner, higher-quality experience, count me in. This mentality is mirrored in a global Reuters report which found that people believe paid-for news is higher quality.
The New Zealand Herald’s Online Business Editor Damien Venuto says this view is correctly held: "Subscriber content is increasingly being associated with quality. You may be able to get things for free elsewhere, but are you actually getting the same thing? You need only look at the in-depth analysis of Te Nihisi Coates in the Atlantic or Simon Wilson in the Herald to know that all news is not created equal and that some things are worth paying for. This also applies to video and audio content. Sure, you can get free clips of a comedian giving chess tips for free from his bedroom on YouTube, but can this ever be compared to The Queen’s Gambit [on Netflix]?
"The choice for companies looking to tell their stories through news publications comes down to how they want those stories told and who they want to sit alongside. It's easy to bemoan a story trapped behind a paywall, but it's worth remembering that everyone who does read it has paid for the privilege of doing so - and that has to count for something."
· Where else are you going to go? The first movers in any field are always going to face the biggest challenges. Costs are high, quality low and economies of scale simply don’t exist yet. Once the news media realised their “free news” mistake, many tried the subscription model. But for every ten that tried to crack, it almost half either failed completely or had to back down. Now, not so much. With fewer and fewer free options left, readers don’t have the luxury of just changing titles. And with the trend to subscription accelerating, the number of quality free options is likely to peter out all together. It will be interesting to see how the rise of podcasts (some of which are now also adopting subscription models) will influence this in time.
Will headlines start to become more authentic or appropriate? We suspect so, as paying subscribers can demand more quality and analysis.
Most media observers see the Trump presidency and COVID-19 as the straw that broke the back of any remaining resistance to the subscription model. Both resulted in a frenzy of media output and public interest and helped push many more readers into the arms of subscriber news. Aggregators are helping lighten the load. Apple News+ now offers a single priced subscription for some access to premium titles including TIME, The Atlantic, The New Yorker, The Wall Street Journal and Los Angeles Times.
In New Zealand, the New Zealand Herald’s bold move to introduce a subscription service for access to its ‘Premium’ content was initially greeted with scepticism but quickly showed the tide had turned and readers were ready to pay. The paper now boasts more than 110,000 subscriptions. Some believe it’s only a matter of time until its main competitor, Stuff News, follows suit – a move which would be much less risky than the Herald’s first-mover decision four years ago.
Of course, even in an age of unfettered subscription media, there are concerns over how many publications readers will choose to pay for. Case in point: a 2020 Digital News Report Survey found that in countries with higher levels of subscriptions, like the US and Norway, between a third and half of all payments go to just a few big outlets.
What is becoming clear to us at Alexander PR is that exclusive and well-researched stories are often more popular and attract more viewers and are subsequently promoted more widely. This is good for the PR Client. It also works for the publication by attracting more paying subscribers in.
Have you considered what your top 5 lists of media you would subscribe to?
Not all will survive, but given the critical importance of the Fourth Estate at a time of increasing pressure on Western democracy, the changing business consumer mindset around subscriptions is important and welcome. In the same way no one expects their morning cup of coffee to be served up free by their favourite barista, the expectation of ‘free news’ on your phone will be gone. The sooner the better.