We’re not even halfway through and already 2019 is set to be a milestone year for New Zealand journalism. After watching news organisations around the world put up paywalls, New Zealand is finally getting a taste of it with NZ Herald putting a price on its content and asking its audience to pay.
Though the model is not new in New Zealand, with NBR and Newsroom already utilising paywalls, for the biggest newspaper in the country to go down that path is a big deal for the future of journalism.
No surprise then that there is plenty of excitement from NZ Herald premium content editor Miriyana Alexander when we speak to her.
“It’s going really well. I am really pleased we have got it to market — it has been successful and smooth.”
There have been talks of NZ Herald implementing a paywall since 2011 but it was February last year those conversations began turning into reality. At the time, managing editor Shayne Currie told us it was looking closely at what it could offer in terms of premium journalism.
“I think in the case of our newspapers we have seen people are prepared to pay for journalism and we believe it’s high time that with the right journalism and premium content people will be prepared to pay for that in a digital sense,” Currie said.
Today, Alexander shares that mission.
“People have been buying the Herald for 156 years in print so we knew we’d had a fantastic loyal audience that would come on board with us so we are thrilled that they are doing that.”
It’s worth pointing out NZ Herald subscribers were given access to the content behind the paywall so they already had a seat on the digital journey.
For the next eight weeks, a digital subscription will cost $2.50 a week before it goes up to $5 a week. A digital annual offer will cost $199 a year and for those interested in digital and paper subscriptions there are packages available.
In its paywall announcement, NZME said hopes to secure 10,000 paid digital subscribers from its digital audience of 1.7 million within the first year.
And according to Newsroom, that figure will need to jump to between 70,000 and 100,000 paying subscribers in the firth three years to “pay up a total of between $13 and $19 million a year if it is to meet the targets it has adopted from the experience with online paywalls in Australia”.
But will people want to pay for it?
Last year, NZ Marketing magazine spoke to Alex Clark, founder of PressPatron, about ways to financially support journalism. PressPatron is a service that news organisations can adopt to allow readers to make a donation – essentially crowdsource funding rather than put a fixed price on a subscription.
PressPatron’s creation came off the back of Clark’s research that found people are more willing to make voluntary contributions than pay for paywalls.
But that’s not to say NZ Herald should be second-guessing its decision. Beyond Clark’s research, there are different stories being played out across the land of news organisations, with many featuring a positive subscriber narrative.
Earlier this year the New York Times reported it had set a new goal for its digital subscribers after gaining momentum and adding 265,000 new digital subscriptions in the last quarter of 2018.
It ended the year with 3.4 million digital subscriptions and 4.3 million total subscriptions. When the results were released in February, the New York Times’ shares rose 12 percent to trade at their highest since September 2005.
“After just three years, we are already three-quarters of the way to achieving our five-year goal of doubling digital revenue,” said chief executive Mark Thompson when the results were released.
No doubt that news will be welcomed by NZME.
When its FY 2018 financial results were released in February this year NZME said it expects to spend $1.2 million this year on the subscription service.
The FY 2018 result also showed the net profit of $11.6 million was down 44 percent on FY 2017.
Looking at NZME’s channels individually, digital and e-commerce revenue was the only one to see growth, up six percent from FY 2017 to $60 million. Meanwhile, print was down four percent to reach $211.6 million, and radio and entertainment was down three percent to reach $106.8 million.
While NZ Herald‘s paywall was officially put on the table in early 2018, Alexander came into the project late last year after a study break at Cambridge University. There, she looked at how other news organisations were transitioning into digital models and saw it’s the right thing for journalism, so the more organisations that do it, the better.
Alexander visited a number of newsrooms around the world to see the various types of paywalls, including metered paywalls, and says after considering various iterations, NZME landed on a premium model, similar to that of The Telegraph in the UK.
The majority of content remains free for everyone while paying subscribers gain access to premium content.
Using a model similar to The Telegraph has possibly spared NZME learning the lesson The Telegraph had to in the lead up to its current model.
Between 2013 and 2016, it was using a metered paywall, allowing visitors eight free articles a week as a way of incentivising paying subscribers, however, it didn’t work as planned. The audience was able to circumnavigate the metre by using different devices and browsers to access the site and as a result, The Telegraph wasn’t able to build its subscriber base at the necessary rate for the company to grow.
“The driving factor for this is to increase engagement with readers,” said The Telegraph’s chief customer officer Robert Bridge in an interview with Digiday.
“We still need the reach, but this is about direct connections.”
Though Alexander compares NZME’s model to The Telegraph, it’s the Washington Post’s paywall system that has been integrated into NZHerald.co.nz. It’s that system that puts the ‘premium’ labels on stories only accessible to paying subscribers.
But what does ‘premium’ mean exactly?
“The premium content is the very best of the journalism we produce in our newsrooms across New Zealand. It’s our unique content if you like,” Alexander says.
Though she explains that unique content spans all content — politics, lifestyle and entertainment — as an example she uses NZ Herald’s business team. Led by Duncan Bridgeman, she says every day they are writing about various economic and financial matters that can’t be found anywhere else.
For the audience and advertisers
While its ‘premium content’ is being used as the rationale behind the ‘premium’ name of the new offer, use of the word is at odds with the how other media subscription services have created ‘premium’ models.
Both Spotify Premium and YouTube Premium offer ad-free versions of the otherwise free apps and websites, but NZ Herald’s premium offer does have ads.
Alexander explains the company is retaining ads behind the wall as a commitment to its advertisers as well as its audience.
“It’s important we offer our advertisers the chance to be in that premium space because let’s not forget these are committed and engaged audience and there’s benefits for our readers and our advertisers for them to be in that space.”
Build a wall and make them pay for it
Within hours of the NZHerald.co.nz’s wall going up, people were quick to find ways past it without having to pay.
A quick search brings up suggestions on how to re-write the code behind the website and even a downloadable Chrome extension.
Though the efforts by the extension builders suggest an appetite for NZ Herald’s content, it also signals people are not willing to pay for it.
We asked Alexander about people getting around it and rather than criticize those people, she says it has been nice to see other people frowning on those measures.
“What has been nice is the incredible support we’ve had.”
That support has not only come from believers in journalism but also from other news organisations in New Zealand.
“We have had messages of support from all of our main traditional competitors you would say and that is heartening and generous of them,” Alexander says.
“The thing is that the industry all know that this is a good thing for journalism. That’s the sentiment with this support and congratulations. Everyone is hoping that this will work because they know it is the right thing to do for journalism.”
One of those showing support is The Spinoff and its editor, Toby Manhire, who called the paywall “a hell of a challenge to pull off”, but hopes NZME does.
“….good and sustainable journalism costs money to make, and that the model that has kept newspapers going roughly since the invention of the Gutenberg Press has mostly melted away.”
Alongside The Spinoff’s editorial coverage of the paywall, it sent a bottle of wine to NZME wishing it good luck with the “boldest, bravest and most necessary play in NZ journalism”.
With there being public support for the paywall from local news organisations, we asked Alexander if she thinks others will follow NZME’s footsteps and she said it’s not her place to say.
But for those who are considering it, a lesson she’s had in the past year is “it’s a case of just getting started”.
“Just get on with it and then you start building this pattern of behaviour with your audiences and that’s been really heartening.”
She says everyone experiments with their paywall models and similarly, NZME will continue to watch its audience to ensure it delivers what they need.
Alexander adds it will also continue to pick the brains of overseas publishers while closer to home is enjoying the support for journalism.
“I know we are all traditionally rivals but I think we all really want journalism to succeed. A world without journalism would be no good at all would it.”