Paywalls are working at some (inter)national news organizations. But how are they working on the local — or even the hyperlocal — level?
Two years into its paywall, the northeast Kansas-based Shawnee Mission Post is at the forefront of smaller outlets asking their readership for money in exchange for reading. More and more are considering it, but at a panel about increasing loyalty and the audience funnel during the recent LION Publishers conference, one LION attendee asked, paraphrased: “That’s great, but how can we take that data back to help direct ad sales?”
Look, business models are different for different markets (and not all local models work in all local markets), but if The New York Times is seeing its digital advertising dip, advertising may not be the boat that a smaller outlet wants to tie itself to. The Shawnee Mission Post currently employs three people full-time — the husband-and-wife team of Jay Senter and Julia Westhoff and reporter Leah Wankum, with Juliana Garcia joining full-time in January. After building an audience over ten years and growing its subscriber base, they plan to trim their emphasis on advertising next year.
“[Small publishers] just don’t really see the value in what they do. They’re not forcing others to see that value,” Westhoff said. “For us, [introducing the paywall] was at the breaking point of ‘we’re going to do this or we’re going to be done.’ We are really grateful that it did work out. For us, after having done the site for seven years, that needed to happen.”
I first wrote about the site’s paywall in the summer of 2017, soon after Senter (the editor/publisher) and Westhoff (who joined the staff full-time as director of sales after a previous employee left in August 2017) had launched it. In the paywall’s first three months, the Shawnee Mission Post had hit the milestone of 1,000 subscribers at $5.95 per month — the goal Senter had set for its first year. More civic-info coverage replaced restaurant closures and car crashes, and the Post has now grown to 2,650 fully paying subscribers. That’s an annual run rate of nearly $190,000.
“We started to look at what was converting people who just visited the page to people who wanted to pay us,” Senter said. “The accountability journalism, the Civics 101 content we put out there — that was the kind of stuff that seemed to get people over the hump and giving us money every month…Things that were on the fires-and-car-accident side of things would get a lot of pageviews, but didn’t seem to have lasting impact on the way that people live their lives around here.”
The Post hasn’t tweaked its subscription price much since introducing it — though the first month is now 99 cents — and a 430-respondent subscriber satisfaction survey in January showed that a broad majority is happy with the value that the subscription provided. Senter had researched the price point of national subscriptions and that of its nearest major metro newspaper, McClatchy’s Kansas City Star, and aimed for a $1.99 price tag. “I had a friend much wiser than I [who said] no matter what the rate is, a lot of people just aren’t going to pay,” he said.
Getting people over the paywall is the first problem; keeping them is another battle. (National news outlets are familiar with this, too.) Some 500 or 600 accounts have canceled their subscriptions, but Senter said it’s unclear how many of those signed up to read just one article (after using up their two free pageviews) and then canceled, or how many ran into their own financial constraints and decided to cut the Post. “We have a lot of people on fixed incomes” in the community, Westhoff said. And being a two-person operation, the Post hasn’t had the time to dig into the data yet, Senter said.
But the subscription revenue has proven to be such a reliable source for the Post that it will cut the quantity of display advertisements by 20 percent next year. The prices for the remaining ad slots will rise, but the user experience (which will be the same for subscribers and non-subscribers) should improve. “Our market has enough large institutional organizations that have ad budgets that they want to reach the breadth of our audience, and we present a pretty unique opportunity to do so,” Senter said. “Markets in more rural, less affluent areas may not have enough of a volume of those organizations to make the premium-package approach work.”
Two years in, Westhoff said, “we know traffic is still increasing and our competitors [in traditional media] are folding…we’re in a strong place to diversify our revenue streams and make it a pleasant experience for everyone.”
But again, this won’t be feasible for every publisher. A number of LION members have narrowed their focus to reader revenue, via paywall or direct public offering or more, after establishing themselves in their communities over several years. And they were also the ones that had cobbled together enough money to pull the trigger on a new idea with a hefty cost to start out. (The paywall service the Post uses comes with a $1,500-plus setup price.)
“From our experience, having that direct financial relationship with readers [has worked],” Senter said. “I hope more LION publishers will look to it, but you have to have that established relationship.”
This article was originally published on Nieman Lab. It was republished on IJNet with permission.
Main image CC-licensed by Unsplash via Josh Appel.