Digital Day: the great paywall debate

New York Times' Paul Smurl and Huffington Post's Brad Cressman spoke about their publications' contrasting business models at yesterday's digital conference in Toronto.
Digital Day

Yesterday’s Digital Day conference in Toronto saw head execs from the New York Times and Huffington Post Canada give their take on the hotly debated paywall.

Naturally, Paul Smurl, VP of paid products for the New York Times and Brad Cressman, head of content for AOL Canada, Huffington Post Canada have a difference of opinion around charging for online content. The former installed a paywall, or what it prefers to call a “pay gate,” after almost two decades of being online last year.

The soft paywall has been a success for the Times, says Smurl, pointing to its 500,000 paid subscription base as of June this year. Plus the New York Times is also seeing a strong increase in its Sunday paper subscriptions, likely because of the free digital access given to readers when they subscribe to the Sunday print edition, he says.

Advertising continues to be the main revenue-driver for the New York title, notes Smurl, and the paywall has actually made contributions to ways in which brands can connect with readers. For example, auto brand Lincoln paid for 200,000 yearlong subscriptions of the Times for select readers as a part of a recent sponsorship. The pub is also “building creative new ad experiences for advertisers through our Advertising IdeaLab, [which includes, for instance] social reader sponsorships where marketers can align [themselves] with content that is linked to social sources.”

The AOL-owned Huffington Post Canada, on the other hand, is a free site that’s fully supported by ad revenue, and in Canada alone it has seen 150% growth since its launch in market last May, says Cressman. The brand is based on providing a platform for a social community through blogging, content aggregation and reporting. Cressman is confident that Huff Post Canada is able to supply free content by keeping its ad units up to the latest standards. The publication is regularly experimenting to monetize its offerings, he explained, such as its efforts to have advertisers use its social media platforms to push out branded content and be more involved in social conversations with its readers. “The majority of the social interactions out there are passing around content, it still plays a key [role] in the evolving social sphere,” says Cressman. “We’re now starting to get advertisers involved in what we deem as social [marketing], where brands create content, not necessarily about their products, but what is important for their readers [which we then share with readers].”

Huffington Post has also tried its hand at charging for content. When the brand launched its mobile app in the US in June it came with a monthly/yearly subscription fee. But the publication eventually decided to reverse the model, making it free to access a month-and-a-half later after realizing that the paid-service was inconsistent with the Huff Post’s positioning.

“You have to be humble with [paywalls], as we’re all trying to figure it out,” said Smurl. “There are no easy answers, but I think strategically it is the right thing to do. If you’re not experimenting in the space, just as the Huff Post did for its paid app, you’re almost committing professional malpractice. You need to, as a publisher, be thinking of alternative revenue streams. You need to diversify.”

The challenge for the New York Times today is trying to find more entry points for readers to access its content, says Smurl, adding that it’s currently looking into alternative, more affordable fees for the lower end of the demand curve (those with a lower willingness to pay) as well as membership-like subscriptions for those who are passionate about the brand and prepared to pay extra for more.

The Times VP advised Canadian publishers, such as the Globe and Mail, which coincidentally launched its paid-service hours before the session yesterday, to “have the courage in your convictions” and believe that readers will value their content as something worth paying for. “I’d say for all publishers, if you’re not producing quality content (and by that I say differentiating content) then you shouldn’t be in business,” he adds. “It’s that quality content that they’re willing to pay for.”

Photo from left to right: Brad Cressman, head of content, AOL Canada; Amber Mac, moderator and co-host of BNN’s App Central; Paul Smurl, VP of paid products, New York Times.