Loyal users will pay for watchdog journalism

Kinsey Wilson. Photo by Mary Kang/Knight Center

AUSTIN, Texas -- One of the dirty little secrets in digital media is that the big numbers of page views and unique users touted by publishers are misleading at best. They overstate a publication's audience size and impact.

Most visitors to a publisher's content are fly-bys: They stay for only a few seconds. And even if they stay longer than that, the vast majority come to a publisher's website only once or twice a month. These are not loyal users devoted to a brand.

What is more interesting and meaningful, especially for publishers of serious news and information, is that the smaller number of loyal users -- who come frequently, linger, and read many pages -- is willing to pay for the content and other products. They identify strongly with the brand.

Kinsey Wilson, editor of innovation and strategy at the New York Times, brought the point home last week at the International Symposium on Online Journalism when he mentioned that 90 percent of  his publication's digital revenue comes from 10 percent of its users.

That is significant given that the Times has 1 million digital-only subscribers, up 20% from a year earlier while print subscriptions declined (see p.2 of their annual report).

Many publishers of high-quality accountability journalism -- also called investigative or watchdog journalism -- are attracting significant revenue from a strong relationship with their users. Publishers in the U.S. like Texas Tribune and MinnPost are not selling eyeballs to sponsors and advertisers but rather being part of a community with a shared interest in the public good. They talk about the readers who contribute money as "members" or "partners" rather than subscribers and give them special privileges.

Wilson's comments about the Times affirm some of my own findings, presented at the symposium, that investigative journalism sites can generate significant revenue from a small number of users and still have impact. (What follows comes from the research paper and the much abbreviated slide presentation of my findings.)

• The Dutch journalism platform De Correspondent launched in 2013 with the promise of being an advertising-free independent outlet of analysis and in-depth investigative reporting funded by annual subscriptions of $66. Almost 20,000 people responded to the initial crowdfunding campaign and generated $1.7 million, enough to hire a staff of 24. The publication has grown to 40,000 paying members at US$ 66 apiece, which adds up to US$ 2.6 million a year, prompting publisher and co-founder Ernst-Jan Pfauth to argue that journalism can create value and earn the public trust by divorcing itself from advertising. 

• In Spain, where political and business interests heavily influence news coverage, Eldiario.es has also marketed itself as an independent news source. CEO Ignacio Escolar founded the digital publication in 2012, and the journalists themselves own it. Escolar recently announced (Spanish) that the publication finished 2015 with revenues of US$ 2.6 million, up 33% on the year, and a profit after taxes of US$ 235,000. Although the digital publication is free, its 14,500 "partners" (socios) pay at least US$ 66 a year to get access to the news a few hours ahead of everyone else as well as ad-free pages, discounts, and invitations to events. These partners generated a third of the revenue. It is worth noting that the partners represented less than 1% of monthly readers of 6 million, meaning that significant revenue can be generated by a small, loyal part of a publication’s online audience. Most of the rest of the revenue came from advertising.

• Another entrepreneurial star in digital media is Malaysiakini, based in Malaysia, which was profiled for the Center for International Media Assistance by Tim Carrington in 2015. Since its founding in 1999 by two innovative journalists, Steven Gan and Premesh Chandran, it has survived many ups and downs financially, battled government attempts to censor content, and in 2014 was reaching an audience of more than 9 million visitors a month. Although it is published in four languages—Tamil, Chinese, Malay, and English—only the English version is behind a paywall because that audience is the one most able and willing to pay. Subscriptions totaled more than 16,000 at about US$ 40 each annually.

In addition to user support, publishers of quality journalism are generating revenue from paywalls, Blendle's pay-per-article model, public subsidies (the BBC is the outstanding example), and foundation support. These digital publications also benefit from the fact that they don't have the printing and distribution costs of print, nor the heavy debt loads of traditional media.

The public, publishers, foundations, and government are now, in effect, negotiating the price for this kind of journalism since the advertising model, which subsidized journalism in the past, has collapsed. But clearly, some people will pay. Publishers need to identify these people and bring them into their communities if they hope to survive and thrive.

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