OPA Intelligence Reports

Posted in News on 02/11/2013 By Mark Glaser & Courtney Lowery Cowgill

Pay walls boost Gannett, NY Times

Everything’s coming up pay walls in 2013. As of the beginning of the year, about 400 of the almost 1,400 daily newspapers in the country had pay walls. With Lee Newspapers and Landmark Media also planning to roll out pay walls (Lee would add 50 new paywalls), 2013 is poised to be the year of the paywall. And Gannett is becoming somewhat of a poster child for pay walls. The company reported a remarkably good fourth quarter, boosted by success of pay walls at more than 80 of the company’s community newspapers. According to the company’s earnings report, circulation revenues were up 16.8 percent to $313 million in the fourth quarter. That helped bring the company’s publishing division up to $1.04 billion in revenue, up 3.7 percent from the same period last year. Ten months into its digital-only subscriber campaign, Gannett’s papers have 46,000 subscribers and CEO Gracia Martore expects to get up to between 250,000 and 300,000 by the end of 2013. As Poynter’s Rick Edmonds points out, the report does highlight one big milestone in the digital revolution: “Circulation revenue growth for the quarter more than made up for print advertising losses.”

Meanwhile, the New York Times posted so-so earnings for the fouth quarter, but the big bright spot was their paid digital subscriptions. As Nina Mandell reports for Fast Company, paid subscriptions at the Times increased 13 percent in the fourth quarter. Mandell writes, “The news is especially encouraging to media companies wondering if the so-called digital pay wall could be the answer to declining subscriptions and audience share.” Poynter’s Edmonds reports that two-thirds of the Times’ digital subscriber base is made up of “entirely new” customers – the same number that Gannett reported in its subscriber base. Is that proof enough to really turn the tide on pay walls? Maybe, maybe not. Some skeptics are starting to turn the corner (think: The Washington Post and Seattle Times), but there are still some who say pay walls aren’t the silver bullet. Guardian CEO Andrew Miller, for instance, tells Nieman Lab: “To have a pay wall and close off consumption of the Guardian at this stage would seem crazy to me.” Digital First CEO John Paton tends to agree with the “pay walls aren’t the answer” camp. He wrote in a blog post recently, “I think they can be a dangerous management distraction to the real job of adapting a legacy business to the realities of an Internet world.” But he’s still experimenting with them, launching what the company calls “the Subscription Project.”