Digital journalism goes premium

By Visiolink | Dec 08 2016 | Business | Insights | Cases

For years it seemed almost impossible for newspapers to make a living on their actual product, news and journalism, on their digital platforms. Readers simply wouldn't pay as they'd grown accustomed to free content online. This has raised the pressure to make money on advertising, an area that has grown fierce with competition. Now, however, newspapers are looking back in time to rediscover a business model they thought lost forever.

Subscriptions are coming back

People actually do want to pay for great journalism, it turns out. It's hard to say where the breaking point is, but so far newspapers all around the world are experimenting with digital subscriptions. Some of them are doing so with premium prices, and it just might work.

The latest example of pushing the limit of digital subscriptions comes from Danish Politiken, a newspaper that has tried numerous subscription models over the years. Yesterday, Politiken launched a new three-tier subscription model with prices ranging from 299 DKK (40 EUR) to 549 DKK (74 EUR) a month.

The cheapest subscription, Tier 1, is purely digital. It features access to premium web content, such as long reads and web TV, along with the daily digital edition of the paper. Politiken publishes digitally on web, iOS and Android. Tier 2 adds weekend editions on print, and Tier 3 adds print editions every day.

The three-tier model is tried and tested broadly. Le Monde, for one, uses it. It differs from cheaper subscription models by aiming at more revenue per reader, rather than economy of scale.

Getting the most out of readers might prove essential to digital business models for the print news industry. Oddly enough, this renewed focus on subscriptions is a tip of the hat to the cradle of modern print journalism. Before advertising, subscriptions were the only way to secure recurrent revenue. As advertisement spending is diversifying, primarily online, the amount left for news media is rapidly decreasing.

At the same time, readers and viewers are nowhere near as faithful in their media habits as they were just 20 years ago. Focusing on more revenue per reader seems like an obvious solution.

Premium prices require premium journalism

Initially voices are skeptical though. Politiken's cheapest subscription costs more than three times as much today than two days ago. In order to succeed with this business model, newspapers must face a dilemma: What is more important? Readers, or advertisers? Premium prices are a way to fend off decreasing ad sales, but only as long as people actually keep buying the paper.

Le Monde faced the challenge in 2013 by hiring additional writing staff for a new business section, which now delivers a third of the publication's editorial content. By focusing on readers as customers, the world-renowned French paper turned a downwards spiral into a fresh start. New magazine sections and an app-edition for early digital release of the print edition have since been introduced.

The mobile platform seems to be a key part of the solution. Being present in the hand of the reader at any time is a cornerstone in Swedish Aftonbladet's success. They practice a sort of Second-Screen-first convention. All their online content and platforms are primarily developed for mobile. 59% of all their digital traffic comes from mobile.

Aftonbladet's pricing for their premium products, Plus and Plus Premium (which also contains access to the ePaper), is a fraction of what newspapers like Politiken charge. But with 225.000 digital subscribers, they can afford to rely heavily on scale. A luxury not all papers have.

In fact, more and more newspapers seem to shun the idea of catering to the masses. Instead, it seems, they’re moving back to their historical positions. With tight editorial focus that favors high quality journalism aimed at narrower reader segments at a higher price. And it looks like it's working.