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VATSANALYSIS

The myth of the paid subscription model for news.

If you are not paying for the product, you are the product, right? The newspapers / publications / independent bloggers that want their content behind a paywall, definitely want you to believe so.

The proposed logic is simple – when you pay, the publishers / writers don’t have to rely on ad money (or the money from rich businessmen / trusts). This we are told, leads to two things – a) freedom and b) quality.

Freedom of press refers to the freedom of the journalist / publication to pursue and put out whatever story they feel is important, without any political / commercial pressure. Quality is a broad term that I am using to refer to the many aspects of the coverage itself – how well researched the content is, how unbiased it is, insights, verification level, professionalism etc.

I took an insta poll last week asking my followers that if they had to choose between freedom and quality, what would they choose. I received about 40 responses. 60% voted for freedom, 40% for quality.

A. Freedom of Press – does ‘paid subscription’ model have a positive impact?

Without freedom of press, how will stories about atrocities / wrongdoings of the powerful come out? A Modi or an Ambani should not be able to influence what stories are put out and what buried.

It should be kept in mind that criticizing those in power is only one of the many journalistic objectives (also called playing the role of a detached investigative watchdog). Over the years, in various countries, journalists have played other roles too (and continue to). These other roles include:

  • bringing out facts (with objectivity) for the public (with some context but minimum opinion);
  • analyzing facts underpinning key issues;
  • being critical change agents (by influencing public opinion and advocating for social change – this is going beyond just being a ‘detached watchdog’ and may include actively encouraging citizen involvement); and
  • acting as opportunist facilitators (i.e. supporting those in power – which is a good thing only when a disturbed nation is seeking some stability and a new government has typically just come in power).

Anyway, so freedom of press is a big problem in our country right now. India ranks 140th in the World Press Freedom Index (of total 180 countries that are included). There is a detailed NY Times article (unfortunately behind a paywall) on this topic, if you want to read more.

Will a subscription based model really solve this freedom problem? How about we look at the top performers in the World Press Freedom (WPF) rankings and dissect them a little?

Source: rsf.org

So the Nordic countries are on the top. Is news mostly free in these countries or the freedom comes from paid subscriptions?

Reuters Institute for the Study of Journalism / Digital News Report 2020 – link

42% of Norwegians pay for their news. That’s great – the more people pay for news, the better freedom of press, right?

But wait, look at Finland and Denmark (no. 2 and no. 2 on WPF). Less than 20% pay for news and yet US which is slightly better than them in terms of paid news subscribers, does not even rank in top ten! In fact, US ranks 45th! What’s really happening here?

In Portugal (no. 10 in WPF ranking) only 10% pay for news (same as Germany which ranks just below Portugal at no. 11).

Freedom of press and paid-subscription doesn’t seem to have any correlation.

While it is possible that if you take money from Ambani / Adani, you may find it difficult to talk against them, to make this scenario sound like the only possible scenario is a bit much. Jeff Bezos bought the Washington Post in 2013. But it does not mean that the publication by default remains silent when it comes to criticizing Bezos.

In any case, even if you don’t take any money from Ambai / Adani / Amazon, if there is an overall culture where journalists are labelled ‘prestitutes‘, targeted and killed (the way it frequently happens in India – one of the main reasons why it ranks so bad in the freedom index), subscription model is not necessarily going to ensure much freedom. Arnab Goswami does not necessarily lick the BJP government’s ass because poor Arnab has no way to get subscription money. Arnab does it because that’s what he wants to do and he has access to the business model that works for him. The intent of the publication / journalist / media house comes first; the enablers and business models come later.

Let’s also for a moment think of one of the benefits of a free press – the publication / journalists can report on all important issues without pressure. Is Climate Change an important issue? I hope most of you say yes.

So say between Sweden (press freedom rank 4) and US (press freedom rank 45), if we did a poll of its citizens to check which populace took Climate Change more seriously, what do you think would the result be?

Reuters Institute for the Study of Journalism / Digital News Report 2020 – link

40% in US believe that Climate Change is an extremely serious problem but less than 20% of Swedes think so!

Being ‘free’ does not automatically equate to making use of that freedom as some media houses / journalists would like to believe! And in any case, you do not necessarily have to get away from ad money to exercise your freedom. Quint does a fabulous job of putting out stories that matter – 95% of its revenue comes from advertisement!

By the way, it’s not that we Indians don’t pay for our news. ~25% of the English language, internet using respondents for example, said in a Reuters survey that they have paid in some form, for some kind of digital news in the last year. [Source]

Of the respondents who do not currently pay, almost 40% said they are at least ‘somewhat likely’ to pay for news in the next year (much more than users in the United States).

Source

It is okay if some publications / writers get the subscription model going for them. Whatever works! I myself pay for one Indian publication (Business Standard), one US publication (NY Times) and one UK publication (The Economist). But I do not necessarily do so because the free ad-based news that I also consume, has no freedom and can no way put out stories that those behind paywalls can!

There are many reasons why people pay for news – supporting independence of press is at best a justification from those who pay, than any proven positive impact on freedom.

Reuters Institute for the Study of Journalism / Digital News Report 2020 – link

B. Quality of news – does subscription model have an impact?

When you pay for a product, the makers have an incentive to make the product better. But is news really a product? No.

Journalism is not simply the aggregation of content. It is not a product, but a process, a way to search for truth and a conversation, not a lecture.

Richard M. Perloff, The Dynamics of News: Journalism in the 21st-Century Media Milieu

And what this means is, taking care of market economics is simply not enough (or the most important criteria) for good journalism.

If paying for news meant better news, most people who paid for news would have rated their consumption better and more reliable, right? But look at the reality.

The above chart shows us that the average trust is independent of whether something is behind a paywall or not! Below is how we Indians trust our news sources.

Source

Most of the Indian brands listed above make money primarily from ads! The business model of a news publication and the quality does not have a proven correlation. But generally if a publication is running ads of big brands, it is unlikely for the quality to be low. So as far as quality goes, ad-model >> subscription model.

Early American newspapers like Benjamin Franklin’s Pennsylvania Gazette and Alexander Hamilton’s Gazette of the United States were unashamedly partisan. … As they sought wider audiences in the 19th century, newspapers became more concerned with what they called “realism”. … And advertisers wanted less partisan coverage to sit alongside their messages.

The Economist, Jul 2020

Ad-money lead to news quality getting better – getting more objective.

Another way to think of why paying customers do not necessarily lead to the ‘product’ getting better is to think of mainstream Bollywood / Hollywood films – truck load of shitty movies in spite of paying customers. What about shitty Bollywood music of the 90s when we were still buying audio cassettes? When a business model depends upon a buying customer, the producer just ends up optimizing the cost of production and the sales-volume. Journalism should never work like that.

Why is everyone really talking about paid subscriptions then?

It is the failure of most media houses to retain the ad-money flow that they once had, that’s behind the push to make the ‘paid subscription based model’ work. It is not driven by a noble cause of freedom of press or quality of reportage – although both can definitely be achieved in this model too.

In fact, on the question of who should be primarily responsible for solving a key quality aspect of news – the misinformation problem – over 60% Indians think it is the government’s job.

Source

I earlier showed how other than Norway, the other Nordic countries in the top ten World Press Freedom list have lesser paid subscriber %age compared to US. The reason they have such higher freedom of press in spite of low paid subscribers is because of their governments!

In the Nordic countries, the states have played a key role by giving the press a high degree of operational freedom and helping it financially through subsidies.

The strong position of public service media fit with the welfare ideal where the media – supported by the state – are judged to play an important role in citizens’ well being alongside other public institutions and the societal responsibility of the journalists is emphasized.

A Welfare State of Mind? – Journalism Studies, Vol 18 2017

If you read the above cited paper (behind paywall) – you will also note that the most independent press in the world (in these Nordic countries) typically restricts its role to being detached watchdogs. They generally refrain from taking on the role of ‘critical change agents’ (that I explained in the beginning, involves influencing public opinion and advocating for social change).

Irrespective of whether you make money from ads or paid subscribers, if the governments comes after journalists, would there be enough freedom? Unlikely. We need a truly free media and yet paid subscriptions doesn’t necessarily ensure it.

Anyway, so now we know that the potential benefits of the subscription model are pretty debatable (even when logically, they sound so perfect, no)?

The follow-up question is: are there any problems that the paid subscription model itself creates? Plenty!

Paywall problems

#1 Readers love opinions

Theoretically, you have the freedom to put out whatever story that you desire. But can you? When you have paying readers, you have to cater to their tastes. And unlike advertisers, readers love opinions.

The incentive to keep readers happy – and the penalty for failing – are greater than ever.

The Economist, Jul 2020

I love the below observation by an IIT senior who has been a writer for many years now.

It’s interesting that back when the New York Times was [just] a dead-tree periodical, it had a tagline that went “all the news that’s fit to print”. Now that it’s gone online, got a paywall and had to get into real time news, it’s become an outrage machine.”

Pertinent Observations, 30 Sep 2020

#2 Information inequality

Not everyone can afford paid subscriptions, so those with less money get left out from accessing it. Who do they rely on for great quality news?

We saw earlier that in US, ~20% pay for access to pay-walled news. 24% of them are also concerned about others missing out on what they read.

Reuters Institute for the Study of Journalism / Digital News Report 2020

#3 Subscription fatigue

Even those who have subscriptions, soon run into a subscription fatigue – how many publications can you really subscribe to? And then you have other subscriptions to take care of as well, like Netflix.

When everything goes behind paywall, you would most likely miss out on a diverse coverage at the cost of a hypothetical freedom of press / better quality.

Although the number of readers paying for online news has increased in many countries, this trend is driven by a ‘winner-take-most’ trend in which large national news brands draw the highest proportion of subscribers. Around half of those that subscribe to any online or combined package in the United States use the New York Times or the Washington Post and a similar proportion subscribe to either The Times or the Telegraph in the UK.

The average (median) number of news subscriptions per person – among those that pay – is just ‘one’ even in high-income households in the US.

To sum up, a journalist can have freedom both in a subscription model and an ad-driven model (or a mix of both, with varying ratio) or even in a charity / donation model (that say Wikipedia deploys). Indians are indeed willing to support donation models too. In a survey, 37% showed support.

Source

In fact this is the model I advocate for my own writing – I want my wiring to be open to all, but ‘patrons’ are always welcome. If you want to fund my work, feel free. I would be grateful.

Likewise, freedom of press can be exercised both in ad-driven model and in a subscription model. There are way more factors at play than just the economics here. What matters at the end of the day is that journalists get to do a good job (and not just view their content as a product) and get paid one way or another.

I want to leave you with the following parting commentary, borrowed from here.

Journalism is facing stiff competition for attention and its connection with the public is threatened by news avoidance, low trust, and the perception that news does not help people live the lives they want to live. But in many ways, the best journalism today is better than ever – more accessible, more timely, more informative, more interactive, more engaged with its audience.

REUTERS INSTITUTE REPORTJANUARY2019

That will be all for this blog. Hope you learnt something.

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