With Paywall in Place, has the Tele Lost its Welly?

Ten years ago, the Belfast Telegraph received a prestigious UK Award for Digital News Service of the Year. This was followed by multiple awards for website of the year, huge growth in on-line readers, and a new platform for digital debate that attracted thousands of comments. But with the installation of a new paywall on 19 May, are these achievements now at risk? Will the free and open voice of liberal unionism be silenced to all save a minority of private subscribers?

The implementation of the paywall is being driven by MediaHuis, a Dutch-Belgium media giant, who acquired Independent News and Media Group last July. On one hand the innovation and fresh capital they bring is welcome; but on the other, evidence shows on-line traffic drops by up to 90% when you force people to pay for content. One of the core features of the Telegraph – distributing local news to inform and educate a local audience – will be significantly diminished. Indeed, with all three Belfast dailies now behind paywalls, will professional journalism continue to drive the debate?

The Existential Threat

Before we rush to judgement, let’s look at the challenge newspapers face. It is no secret that the industry is suffering long term decline, largely driven by the availability of free on-line content, the growth of social media, and smart phone technology that has revolutionised accessibility. Why pay for a paper when you carry instant access to global events in your pocket?

All these factors have conspired to decimate circulation. At present the Tele’s daily print run hovers around 30,000, of which only 71% are paid for sales. Two decades ago, the print run was four times as great, with 90% paid sales. And in parallel to the loss of sales, the revenue from advertising has collapsed.

This negative trend, which will accelerate significantly in the aftermath of Coronavirus, has created an existential threat for the industry. As revenues have declined, so have the resource available for local journalism. That means more reprinting of press releases and generic news, less time cultivating local contents or attending events, and much less resource on investigative journalism and holding local politicians or officials to account. As newspapers become less unique people have less reason to buy them and start to source their news elsewhere; sometimes using amateur outlets which distort facts and magnify subjective opinions. This is a poor substitute for professional journalism, whose aim is to provide objective reports and question existing narratives.

Three Choices for Survival

To try and adapt to these challenges new business models have emerged:

The first – more a rear-guard action than a new business model – is to fight back against the vicious circle by maintaining unique content. N Ireland has an advantage as the local news agenda is a lot more interesting than the average English Council – the stock in trade of most regional titles. Indeed, with topics like the Peace Process and Brexit, we are at the very centre of world events. The Tele has worked hard to supplement this advantage with strong opinion pieces from local commentators and new innovations, such as the Saturday supplement introduced in 2015. That said, the uniqueness is still undermined by the inability to properly resource in-depth journalism and the plethora of other news sources. And while some local titles do well to hold onto an aging audience, they cannot compete against the rising tide of competition and new technology. The slow decline of print journalism is, unfortunately, a losing battle.

The second model is to grow the on-line presence and increase digital advertising. Newspapers have a trusted brand, which they can leverage to boost their websites. For example, the Sun is the most popular paid for title in the UK, with 1.2m sales every day (a reach of 7m unique viewers every month). Yet its free website attracts 30m visitors per month. It is a logical assumption that these impressive digital figures must leverage significant revenue from advertising, so it may come as a surprise to learn that the Sun was £68m in the red in 2019 and has been loss making for years.

There are three main problems with free content. First, the website tends to cannibalise the newspaper itself, accelerating the decline in physical sales. Second, the rates for digital advertising are a fraction of what is charged in print. Third, most digital revenues go to two main sources – Facebook and Google. These sites republish articles from other outlets, hoovering up revenue without the trouble of creating and editing unique content. Even with a large website following, it is unlikely that digital sales will ever restore the income lost from the decline of print and traditional advertising.

The third model is erection of a paywall, and this is the model the Belfast Telegraph has adopted. The first thing new Editor Eoin Brannigan will notice is a dramatic drop in unique visitors (followed quickly by gleeful critics pointing this out). And at £2.50 a week, or just £99 a year, it will take a lot of subscribers before the Telegraph’s digital content will turn a profit. This is the point where many previous newspapers fail, lifting the paywall too quickly and chalking up the loss-making initiative to experience.

Developing the paywall is like developing a brand-new business – it takes years of time and commitment and will initially operate at a loss. When ‘The Times’ introduced the UK’s first paywall in 2010 website traffic slumped and it was left with just 15,000 digital only subscribers. Fast forward 10 years and it now has 304,000 digital only subscribers, while profits for the title have gone from £87m in the red to £10m in the black. Moreover, the recent decision to remove VAT on digital newspapers could easily double profits.

Content is King

But it takes more than time and deep pockets to make what is still a risky and expensive initiative work. Former BBC boss Mark Thompson now runs one of the most successful print and paywall papers in the world, The New York Times, and he thinks he has the answer: “We have a business model that very few people in the industry are following. It is very simple model; we invest in great content.”

And that really is the key. 60% of customers sign up to a paywall to get access to local news. But once they are registered 78% value the quality of content.

The Belfast Telegraph has a proud history, conveys a deep understanding of local issues, and instils a sense of belonging amongst its readers. The new owners have both a duty and a business incentive to invest in unique content, informed analysis, and distinguished commentary. But if they do then the paywall will not be a betrayal of the Tele’s values, but an enhancement: a new direction and a sense of renewal. In a post Covid-19 world this is needed more than ever before.

Belfast Telegraph advert Castledawson,Co. Derry. June 1990” by sludgegulper is licensed under CC BY-SA