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Comment by f055 | Hacker News Reader

This. Years ago it was obvious to most newspapers that paid subscribers are their lifeline. Advertisers come and go, daily sales come and go, but long-period subscribers keep you afloat. Somehow, when the respected newspapers moved to the web, they forgot that, and kept pumping ads like crazy. This, in essence, moved the sense of their product from quality content to clickable content - these two don't mix. Consequently, this eroded quality journalism, investigative, explanatory view of the world (and let's face it, TV could never replace that void, as they are solely relying on ads to survive). And then, a lot of bad things happened with peoples' opinions and understanding. I am glad many outlets are now seeing the correct path. The best news source in Poland nowadays is a wealthy, but niche, "Dziennik Gazeta Prawna" ("Daily Law Newspaper") with great, balanced content on serious issues - that relies mostly on subscribers. The best English periodical I have found is Foreign Affairs, also a very subscriber-focused outlet. Note that both of these seem to offer much better content in their paper issues than online.

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I agree that content quality and revenue source are related in this way. There are bunch of analogies online, that I think help fill out this picture.

Youtube “monetisation” spawned a bunch of clickbait-driven spam. Patreon produced good quality content, acting on the same platform, at the same time. This is somewhere between a subscriber and supporter model. A lot like some newspapers. Almost a natural experiment.

In terms of operational scale, patreon’s “creators” are kind of similar to journalists. It takes similar sums to support the work, and they’re on similar timescales. This makes me think a similar model might work for journalism, though maybe not for newspapers.

Podcasting is another possibly useful comparison. Very little clickbait (earbait?) ever crosses my radar. Podcasts are usually ad supported, but there’s still no way to SEO or clickbait your way to a win. To succeeds a podcast needs subscriptions, usually free. Even @ free, the need to attract a dedicated subscriber base encourages the same sort of focus on the same audience. Slow & steady growth. Win more subscribers than you lose…

This example is messier, but I think it shows that the rules are rules of thumb.

Basically, the path to success needs to depend on quality for quality to be likely. Subscribers are generally quality sensitive. I dunno how to formulate a principle exactly, but it feels like there is something here somewhere.

I've been working on making this model for journalists a reality https://www.demotico.com. So far, I haven't found excited journalists but that may just be me being a poor marketer.

Note that Guardian is successful, because of "supporters" and not >subscribers<. It's different than WSJ, where they lock the content, until you pay. The Guardian way looks more like the Wikipedia one.

Important to note that the Guardian is not actually financially successful at all. They have been suffering heavy losses for years

http://www.telegraph.co.uk/business/2017/02/01/heavy-losses-...

Things have got a little better since Viner stepped in. Good take on the state of newspapers, and the particular success of the FT, from ex-editor of Guardian Peter Preston.

https://www.theguardian.com/media/2017/nov/26/financial-time...

They also make use of offshore tax structures to minimise their taxes, such as the £302m profit from selling Auto Trader magazine.

https://blogs.spectator.co.uk/2016/04/will-the-guardian-now-...

Just checking the references in this article. The offshore tax claim seems to be referenced to "Guido Fawkes" (https://order-order.com/ "Guido Fawkes Blog of plots, rumours and conspiracy") which seems to be a collection of conspiracy articles about all kinds of stuffs, written by this guy: https://en.wikipedia.org/wiki/Paul_Staines

Staines is a piece of work but very well connected. Conspiracies, yes, but not conspiracy theories. He's as establishment as a libertarian blogger could hope to be in the UK.

Fawkes is a well respected media-watch type site in the UK. They're humorous, but respected - think The Register but for media.

How would offshore tax structures help them, considering they're making losses at the moment?

It was the profit from the sale of Auto Trader magazine.

Yes some what ironic given there role in the paradise papers etc newspapers and the media are always do what I say not what I or my owner does

1) The Guardian doesn't have an 'owner'as such, it is owned by a trust.

2) It did make this deal offshore but it didn't save then tax. Good links above on this

For most papers, I'd say it's safe to assume the editorial staff do not make financial decisions.

What they (the finance department) do (minimization of their tax bill) is legal and sensible and necessary for the paper's survival. If it were not and this was known to the staff, it would be no excuse morally or legally to say that the staff 'don't make these decisions'.

Are the editorial staff allowed to report on the financial decisions of their owners?

Yes. If you follow the chain of articles back to its end you will find: https://www.theguardian.com/media/2008/may/03/1

A report by the Guardian on the very same topic.

There's some further analysis of their finances and strategy in this recent piece from The Drum: http://www.thedrum.com/opinion/2017/10/26/how-the-guardian-f...

I really like the wikipedia model, but I know it wouldnt work for every outlet. I’ve contributed more to public radio and wikipedia than any other news service subscription.

Ideally, nytimes/wapo/economist would be completely open, and one would be able to ‘donate’ with a single press of the apple pay button.

I prefer that over yet another username password combo + subscription + app echo system I need to maintain.

Or best of both worlds: single click of apple pay button sets a cookie for 30 days of access; sends a courtesy reactivation email with a link in case you clear your cookies.

The big worry is that this doesn't work for local news at all. The nitty gritty details of governance happen at the local level - municipal and state/provincial legislatures. Journalism on that stuff doesn't scale.

It is working in my community. http://www.berkeleyside.com/ has run a (very modest) profit for the last two years and continued to expand. Their focus is the greater Berkeley area; a population of about 350,000. It is a more educated and well-off population than national averages. The revenue split is 65-35% between supporters and advertising. They've also recently done a direct public offering of stock allowing for $800K in investment.

Local news, supported locally is possible.

Berkeley is profoundly out of the norm for American communities. Berkeley has money. Other places don't. This problem is not solved by the way things work where the money flows freely.

Berkeley has 350,000 people in it. It's also eighteen square miles in size. The entire Portland-South Portland-Biddeford MSA in Maine is about half a million people and it's two thousand square miles in size. And it certainly wouldn't in my hometown in the Lakes Region of Maine, with a population across four towns in the school district of about 15,000 people across a little under two hundred square miles.

The problem devolves to income inequality and the unsustainable nature of community-driven efforts because of it--nobody can afford it!

But it doesn't need to scale. It needs to be as big as the area it services.

Hubris can be a powerful motive force. You get as big as the area you service, you think "I could do more than this", you get bigger, you service a larger area, you think "hey, is this enough..?" - and before you know it, the Manchester Guardian is a worldwide media company.

but local ads on local content are legitimately useful and the only type of display ad i’ve ever clicked on.

Arguably it works better. Minnesota Public Radio has 127,000 members [wikipedia], which is a bit over 2% of the population of MN. They do a far better job covering stuff like city politics than any other news organization in town.

The Guardian has 300,000 members [this article], which is 0.4% of the population of the UK. (And arguably, the better denominator would be the entire anglophone world.)

Why are they mutually exclusive? Newspapers have always had a local section.

Where's the proof that it doesn't scale to local level?

The Guardian was so like the Wikipedia model that Jimmy Wales was a board member of the trust. I would add a link to his wiki entry but it seems a bit recursive

Also worth noting: Jimmy Wales is on the Guardian's board.

Not since April of this year.

> The Guardian way looks more like the Wikipedia one

Have any newspapers experimented with crowd-funding stories? This Niemanlabs report suggests none of the big names had as of Sept 2016 - http://niemanreports.org/articles/crowdfunding-the-news/ - wonder if that's changed?

There are also “De Correspondent” [1] in the Netherlands, which inspired “Krautreporter” [2] in Germany and “Republik” [3] in Switzerland. Both De Correspondent and Republik set new records for crowd-funding in journalism, with the latter raising on the order of 3.5M USD. These projects used crowd-funding as initial funding though, and not for individual stories. Their ongoing financing is based on paid subscriptions.

[1] https://decorrespondent.nl/ [2] https://krautreporter.de/ [3] https://www.republik.ch/

Yes, there’s a German platform that did this fairly successfully: Krautreporter [1] (the article mentions that they were in turn inspired by a Dutch magazine). I know nothing about their finances but they seem to be doing well, and have established themselves as a somewhat niche but serious competitor.

[1] https://en.wikipedia.org/wiki/Krautreporter

There is https://www.wikitribune.com/ which is supported both through subscriptions and donations. It's early days for Jimbo Wales's latest venture.

The newspapers haven't but some of their journalists certainly have, through (now defunct) platforms like spot.us or even just Kickstarter. The way I see it, working as a data journalist, the problem is that you never know beforehand what will turn up and "we will spend three months investigating this thing and who knows, maybe something interesting will turn up or maybe nothing at all" is not something you can easily get people excited about.

Don't opinion pieces work like that?

Indeed, here's the relevant CEO quote in the article:

> "We recognize we have to get more direct-to-consumer revenue over time, and the way we will do that is through membership-type propositions, but it’s going to be much more than a paywall. A paywall is to me an inverse loyalty scheme, where the more you consume the more you pay, which doesn’t seem to work."

What if you pay as you consume up to a maximum? That would transition repeat users into, in effect, subscribers.

Also, individuals paying for a subscription have no effect on the editorial line of a given newspaper. There's been a case recently in France where a billionaire was involved in the infamous Paradise Papers. Some newspaper wrote a lengthy piece about it and it turns out said billionaire pulled 600.000 euros of ads from the outlet a few weeks later. Totally coincidental of course :)

That cannot really happen with actual subscribers. They can pull their subscription en masse if the editorial line doesn't please them, but they cannot endanger the livelihood of the newspaper as one fell swoop like that.

37Signals said the same thing about applications. Better to have 10,000 users at $30 per month than 100 at $3,000 per month.

If a single customer is paying a lot, then you are tempted to make whatever changes they ask for to your application, and it's harder to stand up against featuritis or illogical design.

Basecamp example is good but they do veer a bit away in terms of pricing. The price is too low still for any customer to have pull, but at $100/month, it also leaves out a lot of people. Not sure if there's a point in any of this. I guess I'm just adding on. Since the saying still works if $30 or $100 a month.

I completely agree.

Here in France, there are few truly independent newspapers, all the big ones like Le Monde, Liberation, Le Figaro are owned by billionaires like Niel, Drahi or Dassault. It's quite dangerous as it breaks the independence of these newspaper (for example Niel declared in 2011: "When journalists are bothering me, I buy a share of their fucking newspaper, and they leave me alone").

It's quite dangerous.

The quality of these newspaper also tends to go to "click-baity" contents and it's really annoying. A few years ago, I interviewed for a position at Le Monde (as a sysadmin, not as a journalist), and from what I understood, there was rampant tensions in the redaction between those coming from the web publication and those coming from the "paper" one (the two were historically separated), no wonders...

They still reveal major scandals from time to time (ex: Le Monde and the Panama Papers), but it is rarer than it used to.

Fortunately there are a few independent newspapers, the 2 main ones in France being "Le canard enchaine", which is still "full paper", no website (it's a weekly however), and the other one being Mediapart, which is an online only, ads free, subscription based newspaper.

I subscribed to Mediapart a few years ago. It was at the time a complete emotional reaction after Charlie Hebdo attacks in Paris. But more than 2 years later, I still subscribe to it, and keep reading it daily. One of the big dimension of why I keep paying for it (it's around ~10 euros/month) is that it's a way to support a free and independent press (the other being simply to stay informed).

There is clearly room for an independent and quality press. It doesn't take that much subscriptions to maintain a decently sized newspaper, 100 000 subscribers at 10e/m gives you enough revenue to sustain around 100 employees.

The press is a powerful counter balance of the political. It should remain that way. It will if a somewhat large number of individuals agree to pay for it.

Back in the day, a typical newspaper made about 80% of it's revenue from advertisers (including the classifieds), and about 80% of its costs were printing & distribution. So free Internet distribution should have been 80% of the revenue at 20% of the cost... :)

There is probably not as much money in ads as there used to be.

In the good old days there was no alternative to print media ads. Today there is so much more ad space available.

The money is definitely still there in ads, and growing nicely! As others have pointed out, Google and Facebook have hoovered up the lion's share of the new revenue for themselves, which is arguably starving off the wider ad-supported ecosystem in many ways.

Nearly all the revenue in ads has now been captured by Google and Facebook, which is the far greater challenge for publishers.

How much were the classifieds pulling in before in that 80%, do you know? I know classifieds used to be huge.

Craigslist could probably pull in multiple billions a year in profit and 10 figures in revenue if they went for revenue a lot more. Company value would probably be close to eBay level.

How much have production costs dropped from print to the web? I'm guessing it's not 80%, but it should be a fairly substantial amount.

My understanding is that paid subscribers (and newsstand sales) largely went into paying for printing and distribution while ads paid for basically everything else. Therefore, I expect that part of the thinking was that ads by themselves could pay for digital content creation and delivery.

It's also the case that most people assume that an outsized percentage of costs goes into the physical copy of things. At one point, this came up a lot when eBooks were getting big--though, in that case, the publishers ended up being able to hold the line fairly effectively.

Finally, there just aren't that many pubs that can really command a viable subscription price online--or really any at all. That the WSJ, NYT, and apparently the Guardian can isn't necessarily a recipe for a broader subscription model.

>> t one point, this came up a lot when eBooks were getting big--though, in that case, the publishers ended up being able to hold the line fairly effectively.

I still get miffed when the e-book costs more than the paper copy. It's not like I expect them to be free, but when I'm buying the same product without the physical distribution, I would expect it to be <= the paper price.

I'm not sure how common it is but I agree with your basic point. Physical distribution is actually surprisingly a surprisingly small part of the cost of most books but unless there's some very funky royalty agreement or whatever in place, there's no reason for eBooks to cost more.

I see it relatively often - it's just as often the other way around, of course. Sometimes it's that way at launch, sometimes afterwards (I presume because physical stock is taking up warehouse space and needs to be shifted. I presume there's a built in convenience premium with e-books and the market has discovered you don't need to discount them.

Meh, it's just another small way in which the world refuses to make sense!

> in that case, the publishers ended up being able to hold the line fairly effectively.

By effectively you mean steadily declining sales as people return to printed books.

The decline is fairly small on a percentage basis and the reasons are debated--although it's definitely happened. A fairly sharp increase in audiobooks seems to be one reason. I suspect that people have also figured out that eBooks are good for some materials and not for others. Once you get away from books that are mostly flowing plain text, fiction in particular, eBooks don't generally work nearly as well.

I haven't seen pricing given as a major factor. Used books certainly compete with the eBook back catalog but they aren't usually counted under physical book sales.

I suppose anecdote is not the singular of data. But my family, friends and I have largely rejected e-books based on price. I read a lot.

If you make your content only available for paid subscribers than it doesn't get talked about. If you don't get talked about you lose the importance of being the so-called "newspaper of record". And if you don't get talked about you lose the new subscribers that come from word of mouth. In the old days there was just a few options available in a city and a handful of national papers. Today there is an almost infinite selection of available content. They also had the classifieds. This allowed business models that are not possible today.

> If you make your content only available for paid subscribers than it doesn't get talked about

This doesn’t seem to apply to the Financial Times or the Wall Street Journal.

Having a market catering to an older, richer, and more data driven niche has it's advantages. They are subject to some the same pressures as newspapers, but likely will gain effect at a later time frame then more general newspapers. They also deliver data that is more niche, and less likely to be delivered by alternate channels.

As far as Polish media go, I really like:

oko.press - the best investigative journalism in Poland. They proclaim to focus 2/3 of their coverage on ruling party and 1/3 on the rest. Time will tell if they are honest with that. The strategy makes sense, because government has the most power.

wp.pl - while it has very clickbaity headlines, it's surprisingly balanced when it comes to point of view. Polish political scene and society is currently very polarized. I determined that wp is quite balanced by the fact that they cover both opposition and ruling party news. They carry articles critical of both ruling party and opposition. Make no mistake, WP is a tabloid, but it also has occasional very long articles and interviews, and those are quality journalism. On the other hand, they reprint kremlin propaganda from rt.com like Ukrainians who crucified children in Donbas without fact checking.

The bottom line is I use wp.pl for quick news (it acts as a front guard) and oko.press for fact checking.

As far as paper newspapers, Angora is my favourite. It shamelessly reprints articles from not just Poland but often from foreign papers, and it's interesting to read about Poland from a foreign point of view.

I had high hopes for oko.press but since they seem to have 3/3 negative coverage of the ruling party, and not in an investigative way, but kind of sensational in headlines, I got disappointed. But Angora is an outlet I forgot about but remember very positively, I need to check it out again.

Press has no duty to be positive towards anyone. Critical thinking is what they do and they're very good at it. They often criticize the government, but they stick to facts and check their facts. Surely you don't blame them for pointing out falsehoods ? Why don't you instead blame people who lie ? Whenever an opposition member makes a false statement they point it out too.

> Years ago it was obvious to most newspapers that paid subscribers are their lifeline. Advertisers come and go, daily sales come and go, but long-period subscribers keep you afloat.

[Citation required]. In the era of paper newspapers advertisers were the bulk of revenue. Hi subs were needed to show advertisers that the publication was worth advertising in. It's not like the idea of CPI is a new one!

> This, in essence, moved the sense of their product from quality content to clickable content

The same problem exists with paid subscribers / buyers. Just compare the circulation numbers of British tabloids to those of high quality British newspapers (which don't really exist anymore. Even the Independent and (to a lesser extent) the Guardian have moved toward pandering to their audience.)

Mind, it would really help if I could get the newspaper I actually want delivered to where I live. Call me snooty, but I want to read the New York Times, not the Boston Globe. The Globe isn't local enough for those of us living outside Boston proper, but it just doesn't have the national- and global-scale content of the Times.

Also, unlike ads, which make you chase page views at all costs, paid subscribers will incentivize you to keep writing quality content, otherwise they will quit. Even if they sign-up because of a few sensationalist articles, they will eventually get bored with them, when they'll realize that 9 times out of 10 the headlines are just clickbait.

Slightly off-topic, but I just went on http://www.gazetaprawna.pl/ and was rather turned off by the auto-playing video/audio (that I could not find the source of).

Hmm I use a browser that disables auto play by default. I bet there’s an add-on for that.

Totally agree. Even my favorite subscription (The Economist) had a time where I as a subscriber felt too much content was given away for free online. They luckily turned that back and kept the ecosphere going.

The number of ads in The Economist is pretty irritating for paid content

Sadly at this point i wonder if "clickbait" is ingrained into the corriculum. I see even national broadcasters adopt such headlines, even though they do not rely on ads to fund their services.

US and UK publishing businesses are radically different in subscription revenues. They have traditionally made up a tiny proportion for UK publishers.

in a society with such dramatic wealth inequality, subscription can never be a viable business model for journalism. If you aren't charging people more based on how much they have, You're not going to be able to make it up on quantity, since most people have zero disposable income.

Donations, however, scale with the inverse of the "marginal utility of money". Even though donations are completely voluntary, because they scale with wealth, at some level of wealth inequality, they become more profitable than a subscription service at any price point.

(ad revenue also ostensibly scales with wealth, but not as well, since consumption doesn't scale very well with wealth)

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