Hannah Spyksma: Funding the news – who’s doing it best?

We all want it, we all need it, but how many of us are willing to pay? She’s talking about journalism, of course. In this piece, Hannah pits The Guardian against the New York Times in the bid to find a sustainable way to finance quality news.

She also discusses with PressPatron founder Alex Clark why his New Zealand-based funding platform may offer a happy middle point between the approaches the two organisations represent, by offering a no strings attached approach to paying for journalism.


Behind the wall
To paywall or not to paywall… is an ongoing question for financially-struggling news organisations around the world. It’s a particularly pertinent question in New Zealand right now though, where the media company NZME recently announced that to paywall is the answer it’s giving for access to its premium online journalism this year – including some reporting by the country’s only national newspaper, The New Zealand Herald.

It’s a move that comes as opposition publisher Stuff (formerly Fairfax New Zealand) announces its profits are down and 28 of its mastheads across the country will this year be sold or closed; and as the two companies continue to contest a decision by the Commerce Commission to decline their proposed merger.

Read Post-Fairfax & NZME non-merger it’s time for journalism to get bold

But is paywall really the answer? The question of course, is how to make quality journalism a financially viable commodity in a digital age. We all know the news business has been going through a few… ahem, challenges… over the past decade. In New Zealand, these are felt particularly acutely.

Essentially, the big problem is that despite audiences being online, digital revenue just isn’t as lucrative as print advertising can be. To complicate things, most newspaper organisations still gain most of their revenue from print sales – despite declining readership.

One thing that is certain amongst all this though, is that journalism is a service and a product, and no matter how you look at the state of news media – it needs to be funded. Encouragingly, research has argued that young people are becoming more willing to pay for news, and that paying for news is increasingly perceived as an act of civic engagement.

But how to get people and businesses to engage in this civic act of paying for news? A paywall is just one answer, albeit a popular one at the moment. At its most basic, this is a way to restrict access to some content – the idea being that only those who pay for access can see it. In other words, it’s all about trying to bring back the commodification of news that a newspaper once provided.

In her article ‘What content is worth locking behind a paywall?‘ academic Merja Myllylahti argues that it’s some of the core types of newspaper journalism – hard news and opinion pieces – often seen as the most important types of content, that get locked away. She notes two trends to implementing paywalls – the metered approach, allowing readers to access a limited number of articles before paying, and the freemium approach – allowing free access to some content but requiring payment to access premium content. You’ve probably heard of this one before: think Spotify.

New York Times vs The Guardian
Regardless of approach, what we’re really talking about here are those buzzwords ‘subscription’, ‘membership’ and ‘engagement’. And with these comes the now-commodified word ‘community’. So, the question becomes: how do news organisations create a sense of community that their audiences want so much to be part of, they’re willing to pay for exclusive access?

In this regard, there are two global precedents currently being set. Let’s call one the New York Times approach and the other The Guardian approach. Both seem to be achieving what the New Zealand Herald and NZME are after, and have recently turned a profit on some of their digital ventures – although both offer completely different approaches to community-building.

“How do news organisations create a sense of community that their audiences want so much to be part of, they’re willing to pay for exclusive access?”

The New York Times has followed the metered, ‘subscription’ approach Myllylahti talks about. If you’re like me and a sucker, you quickly signed up for a subscription that costs roughly AUD 6 per month and allows unlimited access to content beyond the five ‘free articles’ on offer.

They hooked me in with the ‘Australian Letter’ newsletter and a Facebook group for Australian content – clever engagement strategies that enable staff to recommend lots of great stories, meaning I quickly chewed through my free quota. Using this approach the Times reports it now has 2.6 million subscribers, with its digital-only subscription revenue increasing 46 percent last year, to USD 340 million.

Despite its apparent success for the Times, metering content does have some flaws. For one, restricting access to content is a quick way to frustrate and isolate readers who can’t or don’t want to pay to be part of a community; in this case, it reaffirms the publication’s status as high-end and somewhat inaccessible. As Myllylahti points out, this is concerning since hard news and opinion pieces are core to journalism’s public mission. What are the implications when only a certain demographic can access certain kinds of information?

Still, newspapers are a business and in this sense, making their product viable as a commodity – and commodifying the concept of ‘community’ along the way – seems to be working.

On the flipside to stuffing content behind a paywall, you’ve got The Guardian. Instead of going for the hard sell, they’ve attempted to build a loyal membership by taking a more emotive approach. I’m not personally a Guardian member, although every time I visit their website they remind me I should be. Guilt trip much? Nonetheless, you’re allowed to read all the articles you can wrap your square eyes around without paying anything; I’m happy about that.

Read A changing media: Crisis or opportunity?

They are leaning towards the ‘freemium’ model, where most content is free but membership enables access to premium content that others can’t see. This approach is built on pitching quality journalism as a value-add to audience’s lives, inviting members who believe in the cause of The Guardian to support it financially and be rewarded with extra access. It’s an approach that appears effective – the membership programme has grown to 800,000 supporters over the past year and, thanks to many contributing factors, the organisation is finally looking to move out of its financial woes.

So, you’ve got the subscription approach, and you’ve got the membership approach. Both have their attractions and both have their flaws. But is there another way to develop some kind of paywall that doesn’t explicitly sell audiences into a community or sign them up for an ongoing membership? Can you just pay for content you like, no strings attached?

These are of course questions we grapple with at Impolitikal, as a volunteer-led, fringe-forward site still trying to find our financial feet while building a genuine community along the way. They are also some of the questions PressPatron founder Alex Clark has been exploring since 2014. The infrastructure for the online donation platform evolved out of his MA, which evaluated a range of online business models for journalism. Since then, Alex has come up with a few ideas that offer a different solution to getting people paying for journalism, no strings attached.

The PressPatron model
“Originally my assumption was that the paywall model was necessary,” says Alex, who launched PressPatron from Wellington in early-2017. “But the research actually showed that more people are willing to pay for their favourite site voluntarily than be forced to pay for it.”

Alex’s research turned into action in late-2015, around the time popular current affairs show Campbell Live was axed from New Zealand’s TV3, who cited low ratings. At that point, he had been working on developing a ‘Netflix for news’-style platform, but it was proving tricky to implement. After Campbell Live was cut, New Zealand business journalist Bernard Hickey asked Alex to run the numbers for sustaining the show through crowdfunding. That’s when Alex says he rediscovered that the numbers stack up for the donation-based approach – something a few other publishers had also been encouraging him to explore.

“The research actually showed that more people are willing to pay for their favourite site voluntarily than be forced to pay for it.”

This realisation prompted him to shift focus, and develop the current iteration of PressPatron. The platform – which now supports more than 20 New Zealand-born media organisations – enables audiences to make a one-off or monthly donation to support news content that resonates with them. Outlets that sign up to be members of PressPatron install a button on their website that facilitates the monetary transaction, kind of similar to Patreon or PayPal, with the company making its money by taking a small cut of donations.

It’s a logic to monetising news based on what Alex describes as the economics of generosity, “which suggests that we’re not cold-hearted economic rationale thinkers. We make economic purchasing decisions based on what we care about, and our values.” The idea being that we’re far more likely to support journalism when we believe in it, rather than being forced into paying for something like metered content or a freemium paywall model.

It’s an approach that others seem to be identifying with too. Within a month of switching from his Netflix-style approach, Alex says he had a network of around 10 to 12 different organisations keen to come onboard. Right now, the organisation only showcases NZ media platforms, with some Australia- and US-based members on the cards for 2018 as well.

Currently, there’s a 50/50 split between one-time and monthly supporters. The average monthly donation is NZD 11 per month, while the one-time average is NZD 49 So far, 44% of those who make one-off donations give NZD 50 or higher. Meanwhile, 14% give NZD 100 or higher.

A wide range of outlets are supported by the infrastructure, meaning that one type of journalism is not promoted over others. Participating organisations self-identify as having a journalistic mission; PressPatron tries not to define boundaries or impose an idea of what types of news organisations its members need to be.

“Everybody has a different opinion about what is quality and what isn’t,” says Alex. “I’m really hoping that people in the community of readers are a good gauge of that. I don’t want PressPatron to be a censor that determines what’s in and what’s out. It’s about people supporting the journalism they love.”

Alex sees the PressPatron model as not necessarily being in opposition to other types of funding strategies like display or native advertising, or sponsored content – but a complementary approach that news sites might ultimately lean towards.

“What I’m encouraging mainstream outlets to do is create a premium home for their hardest-hitting stories and just focus on quality within that subsection of the website. This would be a home where readers know they can come to find good journalism, free of the clickbait, free of sensationalism and free of other things that don’t really have an impact on our lives.”

Like the other paywall models, PressPatron is not a perfect solution. Impolitikal is a member – it’s a great way for us to manage donations without having to build the infrastructure ourselves. But the tricky thing about PressPatron for us is that, as a relatively small site, we have limited capacity to really highlight the donation model – yet. In other words, we’d still need an ace marketing strategy in place to make it work. We don’t have the hook of metered or premium content – just good ol’ fashioned words and ideas that we hope others feel inclined to support.

Love what we do? Support Impolitikal via PressPatron

In that respect, the challenge is back on each news organisation to actively remind their audiences – their community – why their content is valuable enough to be financially supported through donations. There’s no reliance on putting content behind a paywall, but no risk of audiences being turned off because they can’t access your work.

Which might just be where old school newspapers got lucky. They served geographically-defined communities and audiences who were willing to pay because the local rag was what kept them informed about news in their area. A simple equation – and one that various paywall or subscription models are trying to emulate. I’m hoping that as PressPatron grows, so too will a strong community of practice around its network of news organisations, so that we’re able to share best practice tips and tools for community-building and making the most out of this approach in the spirit of generosity.

One thing is for sure though: complaining about a lack of quality news these days is becoming an old story, fast. Says Alex, “There’s no reason anymore to be complaining [about a lack of quality journalism] but not doing anything about it – because there are alternatives and there is so much good content being produced. Sometimes it’s hard to find that content but when you do you should be rallying behind it to make sure that it’s sustained.”

Alex Clark is Founder and CEO at PressPatron. Love what we do? Click here to support Impolitikal.

Hannah Spyksma is Media & Climate Editor at Impolitikal. She is currently completing a doctorate in journalism at Queensland University of Technology. Read more by Hannah.

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