As the Local News Industry Struggles, Publishers Ask Readers to Pay

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The local news industry, fighting for survival, is turning its readers into customers.

Sites are either charging readers for premium content — after up to 10 free visits a month — or setting up “membership” programs where readers make voluntary monthly or yearly payments.

Bklyner, which is fighting for financial survival of its 11-neighborhood site in New York City’s most populous borough, set up an emergency voluntary program last month.

Founder Liena Zagare published this message to readers at the time:

“We’re closing at the end of the month unless our readers decide to support us and become paying subscribers. We need 3,000 subscribers – less than 1% of our readers – to support us at $5/month by 12/31/17.”

But Zagare kepts the lights on at Bklyner as Dec. 31 came and went, and in the last minutes of New Year’s Day sent this email to subscribers:

“You are one of 1,745 individuals who chose to pay for local news and made a big difference. So we are going to keep publishing. To keep our small, high-impact newsroom sustainable, we calculate that we’ll need 3,000 subscribers — less than 1% of our readers — to support us at $5/month. But with everyone’s help, we are on our way.”

In a mid-December posting, when the situation didn’t look as hopeful, Zagare got brutally candid with her readers:

“Local independent media sources like ours are in real trouble. Revenue from advertising and classifieds that once fueled local news is now being lost to Facebook, Google, and other global internet giants. We cut our costs deeply last year, but it wasn’t enough.

“Local newspapers are dying, and local news sites are shuttering every week. Just last month, Gothamist and DNAinfo called it quits. I must be frank in telling you that BKLYNER may not be far behind. We cannot make ends meet under our current advertising-based business model. Like hundreds of other news outlets around the country, we’ve found it impossible to sustain a robust news organization on local ad sales alone.”

At Spirited Media, which includes three “new class” sites – at Billy Penn in Philadelphia, The Incline in Pittsburgh and Denverite in the Mile High City – a cautionary flag has also been raised. Chris Krewson, the editor of Billy Penn who is now becoming the network’s new vice president of strategy and reach, wrote in Medium:

“We’re walking away from direct-sold display advertising. There’s no point in us going head-to-head with Facebook, Google and a slew of local competitors. As the Wall Street Journal notes, our ad revenue is 20 percent below projections thus far in 2017. Yes, we’ll still have advertising on our sites — we’ll primarily use networks or resellers — and will still offer direct-sold ads as part of broader revenue packages. But we want it to be — need it to be, in fact — a secondary revenue stream.”

The primary revenue streams at Spirited Media will be an existing and successful events program that will be stepped up in 2018 and an innovative membership program packed with goodies for readers who sign up. Crewson explained how memberships will work:

“We’re going to be asking for the communities we’ve built — people who’ve stopped us on the street or in restaurants to tell us how much they love we’re doing — to help support our work. We’re working with the News Revenue Hub, a non-profit that has helped a number of smart newsrooms launch membership in this perilous time for journalism, including PolitiFactHonolulu Civil BeatThe Intercept and many more.”

Spirited Media’s memberships program will have several tiers, with readers who pay more getting more benefits.

Most daily newspaper chains have chosen to launch digital subscription programs with paywalls that allow anywhere from two to about 10 free visits a month. Some newspaper groups have two sites – one with premium content that generally costs about $10 a month and the other completely free, but with limited content.

In September, the nonprofit Philadelphia Media Project, which owns the long-struggling Philadelphia Inquirer and Philadelphia Daily News, instituted $12-a-month subscriptions that kicked in after 10 free visits.

Shortly later, PMN said:

“Just over a week after our new meter was implemented on, we are pleased at the rate at which our site visitors are becoming subscribers. The numbers are ahead of our projections and we’re finding that many digital subscribers are adding new print subscriptions as well. This is great news for the future of independent local journalism in Philadelphia.”

At the privately owned Boston Globe, subscriptions cost $27.52 a month after an introductor promotion of 99 cents a week for eight weeks. More than 90,000 readers have signed up, giving the paper a new source of revenue that  looks to be measured in the millions of dollars.

At the major public chains, the trend toward digital subscriptions is beginning to take hold. Gannett now has 312,000 signups, a 60% increases year over year. Tronc (formerly Tribune Publishing) has 220,000 subscribers at its 11 major dailies, a 20% increase over the previous year. McClatchy saw its subscribers swell to more than 92,000 in the third quarter of 2017, an increase of 15.6%.

As the local news industry is now beginning to acknowledge, Facebook and the other social platforms and search-giant Google can offer advertisers much more precise targeting — and at prices that can be as affordable as a couple of hundred dollars a month, depending on the size of the target.

The industry — newspapers and pure-plays alike — inevitably will have to evolve toward a subscription system that is less balkanized. I’ve written about such a system here and here.

But for right now, the industry is getting some good news. It’s a great way to begin the New Year.

Tom GrubisichTom Grubisich (@TomGrubisich) has written “The New News” column for Street Fight since 2011. He is also working on a book about the history, present, and future of Charleston, S.C.