Jan 11, 2022 - Economy & Business

Media experts sound alarm on rise of paywalled content

Illustration of a newspaper shaped like an upward trend line
Illustration: Sarah Grillo/Axios

It’s a bull market for media companies targeting high-end readers, with Justin Smith and Ben Smith joining the likes of Puck, Air Mail, The Information, Axios, Punchbowl News, and others targeting influential, wealthy individuals with new digital publications.

Why it matters: "In this commercial environment, quality is being supported by paying audiences," said Rodney Benson, chair of NYU's Department of Media, Culture, and Communication. "Obviously, long-term, this is going to have tremendously negative civic effects."

  • "We're already experiencing those effects."

Details: As more of these outlets and paywalls pop up, academics and media opinion leaders have begun to voice concern over whether our society is paying enough attention to marginalized populations when it comes to news.

  • A new survey of senior media leaders globally suggests growing concern that new business models, and specifically subscriptions, "may be pushing journalism towards super-serving richer and more educated audiences and leaving others behind."
  • "That's how the business model works in a capitalistic system," said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center and founder of Factcheck.org. "The problem is that we can't have so much behind paywalls, that the public that can't afford to break through."

Flashback: A few years ago, media companies were pushing to scale their free offerings on social media, leading to a slew of economics problems between premium publications and tech platforms.

  • Today, many have regained control of their intellectual property via subscriptions. Free content is still available online for those willing to seek it, but social media algorithms, particularly on Facebook, have evolved to prioritize content from friends and family over brands and publishers.

Be smart: Some of the new subscription publications differ from corporate enterprise subscriptions that have existed for many years, which are usually sold via seat licenses for thousands of dollars per year, although there is some overlap.

  • Outlets will typically charge individuals between $100 and $500 annually to access premium content, often via newsletters. Some may choose to expense their accounts.
  • Many of these new efforts also target high-end advertisers looking to reach a premium audience that's willing to pay a subscription, further subsidizing the content that's mean for elites.

"It's not just a subscription problem," argues Benson. "Advertising-supported free media also don't pay much attention to marginalized, poor audiences," he said.

  • "All commercial media, one way or another, are most interested in the highest sociodemographic audiences," Benson said.
  • It "relegates everyone else to local TV news (still among the highest watched form of news) and the most sensationalistic, and often extreme partisan, news that continues to circulate for free on the internet and through social media."

The big picture: Experts argue more taxpayer-funded public media is a possible response to this growing trend.

  • "Taxpayers should take some obligation to ensure that you have that kind of access," said Jamieson, referencing the Biden administration's recent local news tax subsides that were included in the social spending bill that has yet to pass through Congress.
  • "The only substantial alternative is freely available Western-European style public media like they have in the UK, Germany, or Sweden, supported by all taxpayers, and produced for a mass audience," said Benson. "It's not perfect, and they are struggling to reach younger audiences like everyone else, but it's the only quality 'free' model that works right now."

What to watch: A growing trend of dropping paywalls during critical news events, like the onset of the pandemic, or offering some free content via social media marketing provides some optimism. The outlets that dropped their paywalls "perform a public service," Jamieson said.

The bottom line: "Literate and affluent people will be well served in the emerging economy for news," said Jay Rosen, journalism professor at New York University.

  • "We know this. Just as we know that the rulers of empires will be kept well informed. What we don’t know is whether democratic publics will have quality news and information that wins their attention and fits their budget."
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