The revenue-needy local news industry is getting into digital subscriptions with a furious, sometimes desperate, energy. But there’s still the big, unanswered question: How do you convert enough readers who are used to free content and can keep getting it from competing sources?
Tony Haile, until recently the longtime CEO of the highly regarded online-analytics site Chartbeat, is planning to launch a new subscription site that doesn’t try or even need to answer that hard question. He calls it Scroll, and it has $3 million in seed money from formidable publishers including the New York Times, News Corp and Axel Springer.
Scroll’s subscribers would get ad-free editorial content from participating publishers. That would mean a lot less “friction,” but Scrollers would still hit paywalls on every site to which they don’t have an existing digital subscription.
In a Q & A in Ken Doctor’s Newsonomics, Haile pegs the cost of a Scroll subscription at $5 a month, of which $3.50 would go to participating publishers. So 2 million Scroll subscriptions – Haile’s estimated target number – would produce $84 million in revenue annually to be shared among publishers.
That’s a sizable sum – unless it has to be divided among a lot of publishers. Haile is working with about 30 publishers, which indicates his target of 2 million Scroll subscribers would come from a number of sites. So $84 million revenue is likely be cut into many slices.
Scroll clearly will be offering value by presenting clean editorial content to its subscribers, without all the viewability problems that come from the “Wild West” of programmatic’s ad exchanges. But I see the service encountering barriers on local sites that may not exist in other online news operations.
Haile says in one of his Scroll promotional videos that “if you’re a quality site, publishing engaging content, you’ll do just fine.” But quality is a problem at many local sites. That’s been glaringly true at sites operated by newspaper groups, most of which have gone through successive phases of cost cutting because they’re still chained to their declining print business models.
The quality problem is the main reason that local newspaper publishers have not been able to grow their numbers of digital subscribers to reassuring levels. As Doctor has pointed out, the biggest number of subscribers locally is the 105,000 at the Los Angeles Times. That number is driven to a great extent by cut-rate promotions Second in digital subs is the Boston Globe with 90,000. Many other major local papers have far fewer digital subs, despite often fevered promotions.
To prime the pump for subscribers, most local newspapers and “pure-plays” are putting more focus on the “user experience.” Those experiences have to begin with quality editorial content, but I see publishers spending more time on twirling their “product” knobs because that’s less costly than investing in staff and deploying it in creative ways to produce the quality content on which Haile’s Scroll will depend.
Then there are the paywalls that won’t go away with a Scroll subscription. While many national publishers have generous meters allowing up to 10 free views per months, most local newspapers have stingier meters. The Boston Globe allows just two free views monthly and the Houston Chronicle only three. Other local papers allow as many as five free views monthly, still only half of what many national publications, like the New York Times, offer.
If Scroll subscribers will hit such high paywalls on so many local sites, how can the service expect to keep many of those subscribers – or even sign them up in the first place? It’s true that Scroll, as Haile says, will be an “on-ramp” to more digital subscriptions for the publishers’ sites, but the ramp will only be effective if it leads to quality editorial content.
I asked media consultant Martin Langeveld, who has studied the local-news subscription issue closely, his thoughts on digital subs in general and Scroll in particular, especially whether the new, still-to-be-launched service would be helpful enough to embattled local news publishers.
“I think for now there is not one single solution, other than quality editorial content, as you say,” he said. “The needle of how much of the audience pays will move slowly and will entail multiple avenues beyond basic paywalls, Scroll being one. Basic paywalls currently really are basic, very unsophisticated. A lot more could be done, by analyzing reader data more deeply, to differentiate pricing packages and maximize revenue.”
Langeveld said the stingy meters at many local news sites means those operations won’t get much help from Scroll.
Doing the things Langeveld says paywalls need will require local news publishers to perform a lot of a analytics, which cost money. But the dividends may be greater than the slender yields local providers seem fated to get from Scroll.