Study: Half of first year’s paywall revenue comes in first three months

Our-Hometown
Our-Hometown, a company that handles Web publishing for small community newspapers, has published a report showing the pace of digital subscription revenue for one site over about three years. TheDerrick.com, the website for two small papers in Pennsylvania, launched its paywall in October 2009, allowing free access for the first month.

The Derrick collected 10% of the first year’s paywall revenue during the free introductory month as the users were exposed to the increase in content. During this period, regular readers of the free website actually sought out a subscription in spite of the fact they were not required to pay to view all the content.

27% of the first year’s revenues were collected in Nov 2009, the first month the paywall was up. … In the second month, post-paywall, revenue begins to decrease, a trend that generally continued to the end of the first year.

Based on the company’s experience with eight daily community newspaper sites, “total digital subscription revenues 3 months after a paywall is implemented are about half of what first year’s revenues will be.”

TheDerrick.com received 10 percent of the first year’s online subscription revenue during a one-month free trial period. That jumped to 27 percent when the paywall went into effect and dropped off the rest of the year. The surge wasn’t as pronounced in later years.

It’s hard to know whether this pattern would hold for metro dailies or unique cases like the The New York Times. The New York Times added 100,000 subscribers in the first three weeks of its digital subscription plan, lured by an introductory price of 99 cents. (That doesn’t include 200,000 people who got free access with a Lincoln sponsorship). A year after the paywall went up, there were 454,000 subscribers, which means the Times got 22 percent of its subscribers (but not necessarily revenue) in the first month.

In a previous study, Our-Hometown looked at the audience for a small paper in Brunswick, Maine, and found that the average age of its paid visitors rose after it started charging for online access, from age 43 when the site was free to 59 after the paywall went up. || Related: More stories result in more subscription revenue, Press+ says

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  • http://www.poynter.org Poynter

    Posting on behalf of Greg Golebiewski due to an issue with Disqus:

    “The finding above are consistent with an earlier study by the Canadian
    Magazine and Newspaper Circulation Institute — they show that the
    digital sub renewal rate is much lower than that of print subs, only
    about 34%.
    “The shift-in-age issue is also a pattern with paywalls. The results
    of our and others’ studies indicate clearly that younger users prefer
    on-demand, pay-as-you-go models rather then any long term sub plans. I
    have sent our data to Poynter in the hope it will share it with its
    readers soon.” 
    GG

  • http://twitter.com/znakit Greg Golebiewski

    Steve, what happened to my comment? It disappeared.