This study: Projecting Community Newspaper Paywall Revenues, characterizes the surge in digital subscription revenue seen during the first year at the Oil City (PA) Derrick. The website generated 50% of first year revenue after two months with a hard paywall. The data suggests this surge pattern can be used to predict any newspaper's first year paywall revenue as early as sixty days post-paywall.
Everyone in the community newspaper industry knows their readers skew older, so it was no surprise when a study of the ages of digital subscribers to the Times Record showed a considerable number were above age 50. This study was the subject of an article featured in:
The report compares user age demographics before implementing a paywall and the digital subscribers to the website after the paywall went up. Here's the full report in PDF.
Data about online-only subscriptions at 13 different daily newspaper websites with paywalls is used to generate a demand-by-price curve that predicts the number of subscribers expected for any given price. The econometric principles described in the Wikipedia article, Price Elasticity of Demand/Effect on Total Revenue are used to calculate the price at which revenue can be maximized along with resulting subscription and revenue levels.
Many newspaper publishers have left their websites free and open to the public with the expectation that advertising would eventually be used to monetize their efforts. To a large degree, website advertising has not readily followed and has not been as financially rewarding for the newspaper industry as first thought. Our experience as a technology and services supplier focused on the weekly community newspaper sector has confirmed this. Generally publishers have found that web advertising revenues have been costly to generate and pale in comparison to their print efforts.
There are two methods for pricing online advertising, CPM (cost per thousand exposures) and CPC (cost per click). This paper assumes only display ads from the print edition are run on the website; banner and tile ads can also be run but their value is excluded from this analysis.
On January 17, 2005, the Gaffney Ledger of Gaffney, South Carolina, a 3x weekly newspaper with a print circulation of 8,500, implemented our unique subsciption model and gained 41 online subscribers by March 20, 2005 using our recommended pricing which values the online edition as much as the print edition.
The Our Hometown online subscription model is unique in the market place today in its selection of which pages are available to online subscribers only and which pages are available to the public. Many newspaper websites make the archives available to subscribers only and grant access to the recent news to the public, some protect everything. The Our Hometown system protects only the most recent news and allows the public full access to the archives. The number of issues that are considered recent is a variable in both the Our Hometown systems and the other systems in the market place today.
Some newspaper websites make protected information available to print subscribers only and that is also an option with the Our Hometown system.