Newspaper Revenue: Are Paywalls the Answer?
The health of the newspaper industry is increasingly at the mercy of online revenue and money made off of paywalls. So how is the largest U.S. publisher faring? Gannett, with a combined weekday circulation of 4.9 million, announced recently that their circulation revenue is expected to increase by 25 percent at the end of next year despite a circulation volume drop of 7 percent. All told, the publishing giant’s paywalls—up and running at 49 of the companies 80 newspaper markets—are on pace to earn Gannett $100 million in operating profit by the end of 2013.
Still, circulation revenue alone can’t lift the newspaper industry back to fiscal health. Many of the major newspaper companies are barely treading water. The New York Times Co., which includes the flagship paper, The Boston Globe and About.com, had stable first quarter 2012 revenue but operating income dropped 23 percent to roughly $20 million. And while digital subscriptions for the New York Times are a full-bore success, with 454,000 new members agreeing to fork over money for the paywall, The Boston Globe has a paltry 18,000 paywall subscribers. Still, the company anticipates some $125 million in paywall revenue at the end of next year.
The Tribune Co. is said to be in an upswing, though reports indicate television revenues are cauterizing the financial wounds of its papers. The Washington Post, meanwhile, is losing circulation and ad revenue, with no paywall. And Gannett’s circulation revenues can’t mask its first quarter 2012 results: operating profits are down 47 percent for its publishing division compared to the 2011 period.
What are you hearing from your newsrooms to boost income? Are paywalls viewed as a panacea? And how are the smaller papers measuring up?
This post originally appeared on EWA’s now-defunct online community, EdMedia Commons. Old content from EMC will appear in the Ed Beat archives.