Readers and viewers clearly like the idea of leaning back with their tablets and smart phones to catch up with the news but it might be a while before publishers of digital newspapers and magazines can afford to lean back themselves.
Just the other day, the New York Times announced that its digital ad revenue had dropped from a year ago, albeit modestly. New York Times management explained it away as a consequence of the European debt crisis and other economic speed bumps. But it might just also have something to do with the introduction of a “metered paywall” about a year ago on the New York Times‘s digital properties, which essentially makes you sign up as a paying subscriber after letting you in for free the first few times.
The New York Times faces the same digital catch-22 as other news publishers in the West that are trying to become “digital first”: the digital audience might be growing, as it has indeed for the the New York Times too, but revenue from subscriptions or advertising is not growing fast enough for digital to be profitable on its own any time soon. Should publishers, therefore, concentrate on signing up their most loyal readers on digital as subscribers and risk alienating the many who now expect to get their news and analysis for free? Or, should publishers chase eyeballs with free content first and worry about “monetizing” them later?
One publisher that appears well on its way to turning a profit by doing the latter is Mail Online, the digital arm of Britain’s Daily Mail newspaper, a tabloid aimed squarely at “middle England”, a mythical demographic that is supposedly both middle class and middlebrow. The resilient success of the Mail in print has been the envy of its UK rivals for years. Its Midas touch seems to be working now in digital, too.
The U.S. version of the Mail Online
But look more closely and you will find that Mail Online bears hardly any resemblance to its print parent. The Mail in print is everything you would expect a populist national newspaper to be: hard-hitting, scoop-hungry and full of opinions on the big issues of the day – none of which comes cheap. The digital version of the Mail, on the other hand, is packed with celebrity gossip and quirky human-interest stories but not much politics. The reason is simple: the former travels well across cultures and continents, the latter doesn’t. What’s more, it’s all being done on a relatively shoestring budget.
It’s a formula that has enabled Mail Online to become the world’s most popular digital newspaper – by overtaking the New York Times, no less – and it now expects to turn profitable earlier than planned. Within five years, digital revenue will exceed £100 million a year, Mail bosses said recently. Its apps do come with a subscription fee but much of Mail Online‘s forecast rests on a sharp upswing in digital advertising.
Niche publishers with venerable brands, captive audiences or business-critical content such as the Financial Times can afford to go behind a paywall and still make money. But what of those publishers whose products might be classy and attractive, but not unique or special enough? Mail Online’s success raises an awkward question for publishers of general-interest content going down the paywall route: is it really such a smart thing to do?