John Paton says what most media CEOs won’t about paywalls — they are a short-term tactic at best

/// John Paton says what most media CEOs won’t about paywalls — they are a short-term tactic at best

November 19, 2013  |  Blog

Digital First Media CEO John Paton — who runs the second-largest newspaper chain in the U.S. — has made it clear in the past that he is not a fan of paywalls, so the news that he is rolling out metered subscription plans at about 75 of his company’s papers might seem a little surprising. But at least Paton is willing to admit something few other media executives have when put in a similar situation: namely, that paywalls are short-term tactic, rather than a long-term strategy.

In his usual fashion, Paton announced the paywall rollout by posting his thoughts about the move on his personal blog. He said that Digital First tried several other approaches to increasing revenue — including “hard” paywalls, which don’t provide any free content at all, as well as “survey walls” created in partnership with Google, which ask readers to fill out a questionnaire before they get access to the paper’s content. But neither worked very well.

“Our experiment with Google Consumer Surveys, while initially a success, gradually fell off in its effectiveness and reduced our online traffic growth wherever the surveys were in place. Our newspapers, which had basic, traditional paywalls… failed to generate any kind of significant revenue.”

Trying to manage the decline of print

As a result of the legacy costs associated with the printed newspaper business — costs that forced Digital First to put one of its papers into bankruptcy protection for the second time last year — Paton said that the company was effectively being forced to add metered paywalls (which will be run by Press+) at all 75 of its major newspapers, in order to shore up its revenue while it tries to make the transition from print to digital.

“Print dollars are becoming digital dimes. But costs are still in dollars and, like most newspaper companies, we are radically reducing those costs. Companies like Digital First Media have to manage the decline of one medium while building for – and in some cases, waiting for – the new revenue streams to grow.”

But while most media executives who have announced paywalls have made it sound as though they are striking a blow for the future of journalism — or that readers should somehow feel grateful that they are being allowed to pay for all the wonderful news these papers produce — Paton went out of his way to say that he doesn’t see paywalls as a long-term strategy.

“Let’s be clear, paid digital subscriptions are not a long-term strategy. They don’t transform anything; they tweak. At best, they are a short-term tactic. I have said that often enough in the past. But it’s a tactic that will help us now.”

In February, Paton said that paywalls were “a dangerous management distraction to the real job of adapting a legacy business to the realities of an Internet world,” and that “you don’t transform from a broken model by tweaking it – you build something else.” If the revenue problems of traditional media weren’t already clear, they would be even more obvious now that one of the industry’s most vocal paywall opponents has had to jump on the bandwagon, even for a short time.

Link: John Paton says what most media CEOs won’t about paywalls — they are a short-term tactic at best

GigaOM – Mathew Ingram

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