Early digital subscription models

In the 1990s and 2000s, most newspapers were hesitant to charge for content. Publishers feared that if they were the only newspaper charging for content, readers would simply shift to alternative sources. A few newspapers in the United States, however, adopted digital subscription plans before any others.

These are the stories of those early models, and how they took shape.

The Wall Street Journal

In January 1997, the Wall Street Journal began charging consumers $50 a year (less than $1 a week) for digital access, becoming the first major newspaper in the United States to require a digital subscription.

In April 1998, the paper announced it had surpassed 200,000 digital subscribers. The Wall Street Journal passed 1,000,000 subscribers in November 2007.

Despite this success, other newspapers were hesitant to emulate the hard subscription model of the Wall Street Journal. To begin with, the Journal was “business read” for audiences, something necessary for people’s jobs, rather than local or community based “civic read.” In addition, some readers may have charged the subscription to their work. Newsday based on Long Island in New York was a notable exception to the group that thought the Journal model was unique; it launched a hard subscription model in October 2009. The strategy had difficulties. After three months, it was reported that Newsday had only signed up 35 digital subscribers. At the time, this lack of success was seen as validation that daily newspapers should be hesitant to require a digital subscription.

Albuquerque Journal

In 2001, the Albuquerque Journal became one of the first local newspapers to require a digital subscription for unlimited digital access, with print subscribers receiving free online access. Donn Friedman, assistant managing editor at the time, wrote that he believed in the “authoritative content model.”

“Readers need what you [newspapers] have to offer,” he said. “And if you stop giving it away for free, they will pay for it.”

He went on to explain that the Albuquerque Journal’s model only allowed non-subscribers to access summary articles and classifieds, in essence, a “hard” model.

In 2009, it was noted that the digital subscription model might have limited the newspaper’s inbound links from Google.

In 2012, the Albuquerque Journal adopted a new approach for creating revenue from digital readers — rather than being required to subscribe, non-subscribers are instead required to answer 1-3 questions from Google Consumer Surveys to access content. Google pays the Journal for every answer (e.g. a nickel for every answer). Below is an example of the popup that non-subscribers encounter when they access digital content.

In two years, Friedman declared that the Journal doubled its online traffic, and noted that the model “takes advantage of what newspapers already have, which is an engaged and intelligent audience.” This model helped inspire the Columbia Missourian to implement a similar model in 2014. Digital First Media has also experimented with Google Consumer Surveys.

Arkansas Democrat-Gazette

In 2001, the Arkansas Democrat-Gazette began requiring a digital subscription, with print subscribers receiving free online access.

The reasoning behind it, according to the paper’s publisher Walter Hussman, was to prevent readers from abandoning the newspaper’s print version. If the news content was available for free online, the newspaper feared that its readers would read the online stories and drop their print subscriptions — which would decrease print advertising revenue. Therefore, the newspaper created a freemium website — only subscribers had access to the premium local news on their website.

Since then, the Arkansas Democrat-Gazette has been praised for retaining much of its print subscribers. For example, between 2000 and 2010, while most U.S. newspapers experienced sharp circulation declines, the Democrat-Gazette was able to increase its print circulation by 3.2 percent. Their digital subscription model continues today.

The New York Times

Perhaps the most watched model, however, was the New York Times, whose role as a national and local newspaper, and one not largely focused on a single topic (ala the Wall Street Journal and business), made it more similar by degrees to other papers. The Times implemented its first digital subscription in 2005 when it walled off specific columns from non-digital subscribers. But between 2005 and 2007, 2 percent of users were willing to pay directly for content. It’s “TimesSelect” attracted just 227,000 paying customers. At the same time its free news content was drawing 13 million unique visitors a month according to Nielsen/NetRatings.

The Times ended the experiment in 2007 to increase its audience size and advertising revenue. In the first month after The Times removed TimesSelect, the opinion section of The Times’ website doubled its traffic and gained new advertisers such as American Express.

In 2011, after significant study, The Times launched a subscription model that had rarely been used in the United States. The Times implemented what is referred to as a “metered model.” The “meter” allowed readers to access a certain number of free digital articles before facing barriers. Non-subscribers initially had access to 20 free articles per month. That number was reduced to 10 in 2012.

The model has been increasingly emulated. One appeal is that only core readers, who are the most likely to purchase a digital subscription for unlimited access, are prodded to subscribe. Another is that casual readers are not scared away. This minimizes any potential losses in readership and maximizes the potential for digital advertising revenue.

In the first three months, The Times garnered 224,000 digital-only subscribers. By the end of 2012, The Times had nearly 600,000. In August 2015, the Times surpassed 1 million digital-only subscribers

Despite a wide swath of initial skeptics, the meter was soon seen as a massive success that other newspapers imitated.

By the end of 2012, 41 of the 98 newspapers studied had launched metered subscription models, 7 more “hard” models, and 4 freemium models. At that point, however, almost half the papers in the sample, (47) were still entirely free online.

Data Source: American Press Institute independent analysis of circulations over 50,000

American Press Institute

For newspapers that launched a digital subscription in 2011 or 2012, the median weekly price was $2.30. As the chart below shows, the most common weekly price point was between $2 or $3. However, 8 newspapers charged between $3 to $4 and 4 newspapers charged over $4 a week.

Data Source: American Press Institute independent analysis of circulations over 50,000
Note: Data was unavailable for three newspapers.

American Press Institute

Looking at how many free articles the metered models allowed, the most common number was 15 followed by 20. These relatively high numbers illustrate that newspapers feared upsetting readers if the number of free articles was too low. As we explained previously, a majority of these newspapers have since reduced the number of free articles.

Data Source: American Press Institute independent analysis of circulations over 50,000
Note: Data was unavailable for four newspapers.

American Press Institute

The influence of The Times as an early model, and the industry’s growing consensus around the metered model today, may be explained in part by research showing that when launching a new digital subscription plan, publishers mostly just consult their peers. Researchers at the University of Missouri School of Journalism found that 85% of publishers consulted with other newspapers before implementing a plan. However, only 29% conducted focus groups and only 28% tested the digital subscription with a subset of users.

In contrast, The New York Times invested heavily in learning from its audience how it should implement the metered model. Tim Griggs, who was the executive director of cross-platform monetization at The Times during this time period, has explained that The New York Times spent a year to study and test how to market the digital subscription.

They learned that their readers “want to be romanced … They wanted to just be aware of the paid model and what it meant to them and to be able to manage their free articles.” This understanding led to the Times creating a counter at the bottom of the website that showed visitors how many free articles they have remaining, and influenced how they marketed digital subscriptions to online readers.