The newspaper industry is shifting from traditional print models to digital as the internet changes how news is consumed and distributed. Newspapers now face declining print circulation and advertising revenue. As a result, newspapers are moving online and implementing paywalls to charge for digital content access. The New York Times has found success with its soft paywall, gaining over 640,000 paying digital subscribers. However, paywalls still have loopholes that limit their effectiveness as a long-term business solution for newspapers in the digital age. The future of the newspaper industry remains uncertain as it continues navigating this digital transition.

1. Shifting business models – 
newspapers to online

2. Focus
 How the business model has changed
 Why the business model has change
 The internet
 Paywalls
 The New York Times

3. Background
 1702 – the first English daily newspaper was published
called The Daily Courant
 1830 – number of newspapers published in the US is 715
 1856 – first full newspaper ad published in the New York
Ledger
 1870 – 5091 newspapers published in the US
 Early 20th century - radio and TV news became more
influential

4. Background continued
 1933 – war between newspaper and radio industries –
American newspapers try to stop radio broadcasts
delivering news – unsuccessful
 1954 – more radios than newspapers
 1967 – digital production processes of
newspapers, including use of early computers
 2007 – 1456 Daily Newspapers in the United States
 2009 – worst year in print advertising revenue – big shift
with newspapers moving to online

5. Very basic newspaper business model of
old
 Journalists employed to find and write-up stories –
outgoing
 Papers sent to print – outgoing
 Newspapers advertised – outgoing
 Copy sales revenue – retail and subscription
- incoming
 Display and classified ads - incoming

6. However
 Circulation is decreasing in addition to revenue
from advertising

7. Problems the old business model faces
 Increased competition from other formats – radio &
TV – still have many viewers/listeners
 Economic recession – double dip since 2008, not
much investment, people not willing to spend
 Broadband subscription increasing – June 2012 –
estimated population of the US 348,280,154 – of
this, there were 273,785,413 internet users
 Hard to find exclusive stories – news breaks out on
social media

8. Internet competition – the big one
 News is available everywhere – big corporations like
Microsoft and AOL now provide news, for free.
 Blogs provide specific news to audiences
 Example – TMZ broke the news of Michael Jackson’s
death
 http://www.tmz.com/2009/06/25/michael-jackson-
dies-death-dead-cardiac-arrest/

9. Switch to online
 Online is becoming the format to read news
 Online magazines are constantly been set up, as
well as iPad and other tablet and mobile devices –
The Daily (later pulled)
 In the US, 65% of people aged 18-29 get their news
from the internet
 28% of people from the UK and US access news via
their mobile every week

10. Switch to digital continued…
 The shift is taking place at different rates – varying
business ideas and models – US far quicker to
embrace and share content than UK
 Moving online can build greater online audiences
and can use cookies to target content and
advertising

11. The problem with the internet
 Most readers spend far less time online – larger
audience does not mean larger revenue generation
from advertising
 Difficult to cash in on innovation

12. Why don’t audiences pay for content?
 People don’t want to pay for content on the
internet – nothing physical, hard to adjust
 In the UK – only 4% of people said they would be
willing to pay for their news website
 The news will always be accessible somewhere else
for free
 People in the US are far more willing to pay –
again, different speed of shift

13. Paywall
 What are they?
 Hard paywalls – The Times (UK) / Wall Street
Journal
 Combination – The Boston Globe
 Soft – The New York Times, Financial Times

14. Does it work?
 The Times (UK) and Wall Street Journal both very
secretive
 NRS Padd survey found that The Times have nearly
8 million print followers but only 675,000 online
readers
 The Times often makes things free for big events –
e.g. Queens Jubilee
 Financial Times fairly successful - first half of 2012 –
more people paying for digital than print

15. Case Study - New York Times
 Founded in 1851
 America’s most popular newspaper site
 Largest local metropolitan newspaper in the United
States and third largest newspaper overall
 First implemented the ‘TimesSelect’ subscription
program back in 2005 – similar to paywall

16. TimesSelect

17. The New Paywall
 Implemented soft-paywall strategy in March 2011
 Allows visitors to access 10 articles per month
before prompting them to subscribe
 Their success far exceeded people’s expectations
 Have reached 640,000 paying subscribers recently

18. The New Paywall
 The company is expected to make more money
from subscriptions that from advertising
 Douglas Arthur, analyst with Evercore Partners
estimates total subscription sales will top $768.3
million this year ($52 mil. More than advertising.)

19. The New Paywall
Barclays analyst Kannan Venkateshwar estimates that the paper will have more digital
than print subscribers in a few years

20. Underlying Problems with Paywall
 “When we launched our digital subscription plan we
knew there were loopholes to access our content beyond
the allotted numbers of articles each month. We have
made some adjustments and will continue to make
adjustments to optimize the gateway by implementing
technical security solutions to prohibit abuse and protect
the value of our content” – NYT cooperate
communications Vice President Eileen Murphy (Feb.
12, 2013)
 There are still plenty of ways to avoid paywall (Google
chrome incognito mode, Firefox Private
Browsing, clearing cache etc.)

21. The New York Times conclusion
 Although the paywall for The New York Times
seems to be working, we feel that it is only a short
term solution
 The New York Times also has a long way to go to
close all loopholes in order to increase growth and
revenue on its website

22. The future…
 The shifting model leaves uncertainty for
Newspapers and their future
 http://www.telegraph.co.uk/finance/newsbysector/
mediatechnologyandtelecoms/media/9614953/Gua
rdian-seriously-discussing-end-to-print-edition.html

23. What the theorists say?
 “By understanding identity and the relevant
relationships, journalists can create a platform for
their work that will have a meaningful impact in the
Web 2.0 era.” – Rachel Davis Mersey
 “"Fifteen years after the commercial debut of the
Internet, publishers on average still depend on print
advertising and circulation for 90 percent of their
revenues. Stop the presses and newspaper
companies are out of business. It's just that simple.”
- Alan Mutter

24. What do we think?