Chronicle Paywall Wasn't Worth Much, Anyway (Update)

Update, 4:02 p.m.: Phil Bronstein responds, see bottom.

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Daniel Rubio
This morning a Bloomberg TV interview with former San Francisco Chronicle editor Phil Bronstein made the rounds, causing mild, renewed blogosphere hysteria about the Chron's now-defunct paywall.

Bronstein said via an anonymous source that the paywall netted about $500,000 before the paper's new leadership took it down -- a number that he (or the source) evidently forgot to prorate. We talked to another source close to the situation who said that two or three weeks ago the Chron had about 4,000 digital-only subscribers.

Multiply that by the monthly $12 each of them was paying, and you'd get $48,000 in revenues each money, or $576,000 annually.

But that's not the story.

The paywall's real problem, according to Bronstein, was that it served as a tourniquet rather than a blood transfusion for the money-losing paper. He told Bloomberg that paywalls serve to retain an older, stodgier subscriber base -- comprising "people who aren't necessarily going to be around in 10 years" -- rather than to attract a new audience.

That's actually debatable, an expert told us.

Look no farther than the wildly successful New York Times paywall, which still nets $150 million a year to bolster its print product, despite slow growth over the last two quarters. In the Times' case, though, the value proposition is clear. Click through your requisite 10 freebie articles in a month, and you'll hit an instant content embargo, accompanied by an automatic "Subscribe Now," window.

Sure, there are ways to get around that -- paywalls are famously porous for anyone who knows how to switch Internet browsers -- but the rules are still cut-and-dry, and the Times makes it very clear what you're missing if you don't pony up.

That's much less clear in the case of San Francisco Chronicle. If you were browsing the Chron's free SFGate website over the last four months, you may have felt very little incentive to move over to the paid site. The Chron still offered breaking news -- i.e. the Asiana crash -- for free, and staff writers were instructed to write blog-like abstracts for each of their stories to hook readers. But in many cases, those abstracts gave enough detail that there wasn't much reason to pay for the actual story.

Not to mention that if Chron exclusives weren't teased on SFGate, then no one would know where to look for them.Take the Asiana plane crash story, for example. Roughly a week after the crash, staff reporters Kevin Fagan and Vivian Ho wrote a feature-length recap from the perspective of first responders. Because they didn't dangle the headline on SFGate.com, non-subscribers didn't know to look for it.

The real question then, is whether paywalls ever work when they're installed as a retention strategy. Bronstein, who now chairs the board at the Center for Investigative Reporting, would undoubtedly say "no." After all, he told Bloomberg that Hearst Corp.-style paywalls, and the older readers they attract, are "not the future of news organizations."

Bronstein's ideas are still a point of contention among newspaper corporations such as Hearst, which is still experimenting with paywalls at other papers, including the Houston Chronicle, and probably still throwing ideas at the wall to see what sticks. (It's also unclear why other media outlets are still asking Phil Bronstein to opine on Chronicle affairs, especially those pertaining to revenue.)

But media experts have said, many times, that newspapers aren't really in the business of selling subscriptions, anyway; they're selling audiences to advertisers. So if your paywall hinders traffic, and fails to attract a new audience, then it really has no purpose. And perhaps that's where Bronstein's opinions hold the most weight.

Update, 4:02 p.m.: In a follow-up interview, Phil Bronstein acknowledged that, when you do the math, the half-million dollar figure pens out to a yearly total, not a four-month haul. He also pointed out yet another, indeed larger problem for the Chron's paywall -- that there's no way iPad and digital subscription revenue could keep pace with declining ad revenue.

Update, 4:40 p.m.: The Kevin Fagan-Vivian Ho Asiana story is now restored on SFGate.com.




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1 comments
dmon707
dmon707

The Chron has Hearst disease in its determination to fail. It lost a big chunk of its physical delivery subscribers when it arbitrarily decided to rescind their ability to manage their accounts on-line for vacation time.

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