Still no answer for newspapers in digital age

Solving the problem of declining newspaper circulation in the age of the internet is something that has troubled media moguls the world over for a number of years now. Falling sales, crumbling advertising revenue and an entrenched attitude among those brought up in the internet age that creative content should be free have all contributed to the sense of urgency within the industry that a system needs to be devised to keep journalism both profitable and with its integrity intact.

Paywalls
Many organisations have attempted wildly different strategies to attempt to claw back some of the financial shortfall that the internet has created. Rupert Murdoch’s newspaper arm in the UK News International closed-off their flagship papers, The Times and Sunday Times, behind a paywall in 2009, arguing that the allowing free content online served by advertising was not financial viable. At the same time, they withdrew permission for Google to provide Times articles in search results, with Murdoch describing the search giant as a “parasite”.

Elsewhere, the New York Times placed a paywall over its website in 2011, allowing partial viewing of articles, which has been a popular system for rivals, such as the Financial Times and the Wall Street Journal. The NY Times paywall has been partially successful, seeing 16 percent growth during this year, although digital advertising plummeted 22.5 percent during the same period.

The success of their paywall has been unclear, with the paper reluctant to provide firm statistics on subscriber numbers. According to the Audit Bureau of Circulation, however, the paper received 132,000 digital subscribers by July 2012. This was stark contrast to the number of people reading online versions of rivals like the Telegraph, which saw just under 2.8m visitors in August. In September, Murdoch was forced to back down over his stance with Google, allowing articles in the Times to be partially viewed in search results, albeit keeping the paywall intact.

Broadband levy
Writing in the Guardian newspaper, British journalist David Leigh has suggested that broadband providers be forced to charge a small levy, perhaps of about £2 a month, which would then be used to fund journalism. Each news organisation would get money in accordance with their readership figures. Leigh writes: “A small levy on UK broadband providers – no more than £2 a month on each subscriber’s bill – could be distributed to news providers in proportion to their UK online readership. This would solve the financial problems of quality newspapers, whose readers are not disappearing, but simply migrating online.”

Obviously there are concerns about having a state-funding mechanism for news providers, bringing into question journalistic independence, but Leigh believes the model used for funding the BBC would sufficiently address these concerns: “The levy would, like the BBC, be operationally ring-fenced against ‘state intervention’, although it might well be subject to the same long-term political tensions as the BBC licence fee. That licence fee system still works more or less successfully, of course, just as the more extreme Nordic model of direct newspaper subsidy does.”

The Nordic model Leigh refers to is one born during the middle of the last century as a means to aid the newspaper industry from an increasingly competitive marketplace. However, the idea that a direct government subsidy for an industry meant to be holding it to account is surely not something to be encouraged. Likewise, the fact that the BBC license fee works in the UK does not mean that it is a system that could be transferred to the newspaper industry. It’s a format that has worked as a quirk of the British system, but not one that can be easily replicated abroad.

Paywalls may represent the most obvious system, but they neglect the fact that a whole generation has been brought up to expect content – be it music or news – for free. While subscription services like Spotify are becoming more popular in the music industry, paywalls have a long way to go before they are considered the norm. Closing off whole swathes of readers is not going to endear your paper with the reluctant-to-pay public, but a model like the New York Times, offering some free content in order to entice future subscribers may. Changing these habits is the real area that media companies need to focus on, and until that happens, newspapers are destined to struggle.