Will the Daily Herald’s Pay Wall Deter Customers?

It was recently announced that the Daily Herald is going to be enforcing a pay wall to access its website, making it the first newspaper in Chicago to charge for online content. Unlimited access will cost $19.99 a month, and for print subscribers, online access will cost an extra $1 per week. The first 15 visits to the website in a month are free.

We at Anthem have been interested for years about the viability of news web sites and its implications for marketers.

Revenues have plummeted at newspapers as they find their print subscriptions plummeting and free online web usage skyrocketing. The print version of the paper is getting smaller, so the advertisers who are paying for print ads get less space to do so, which means less money for the papers. And the newspapers aren’t recouping the ad costs online. It’s not a surprise the Daily Herald is trying to find a way to generate revenue. Trying to make readers pay for online content is what all newspapers should have tried to do when news websites were first created.

What we don’t understand is how the Daily Herald can retain its customers with two larger, more prominent newspapers in the same market that aren’t charging for online access. The Wall Street Journal and New York Times have pay walls, but they have niche, loyal readerships and deliver in-depth, unique content. Even the New York Times has not fared well over the years with enforcing a pay wallit's come and gone several  times over the years. When faced with a pay wall at dailyherald.com, won’t just about everyone go to the Chicago Tribune or Chicago Sun-Times for basically the same news? If all three publications decided to put up a pay wall at the same time, now that would leave Chicago readers contemplating paying to read the news online.

A stark problem with the Daily Herald’s pay wall, however, is its pricing strategy. If a yearly print subscription to the Daily Herald costs $60, and the additional $1 per week for online access would mean a total of $112 for online and print access, who would spend $240 for online-only access?

The Daily Herald says it is putting up a pay wall in order to protect its columnists and premium content. We’ll see how many of the Daily Herald’s 1.4 million monthly unique online users will pay to access this content. By comparison, the New York Times pre-pay wall was seeing approximately 35MM unique monthly users, and 1 million NYT readers (including over 750k of its print subscribers who have an automatic digital subscription) have subscribed for a $15 per month online subscription. If the loyal readers of the New York Times are still skeptical about paying for online content, what will happen to the Daily Herald?

Posted by Lisa Wayland on 09/13