Why can’t online news outlets hike their prices?

Everything has been going up in price lately, except online news subscriptions. Some news media groups now offer a superyacht, a newly discovered Faberge egg and eternal happiness to every new subscriber just to get a few more of them in.

That’s what I hear, anyway. There may be some small print. In the heyday of print, the newspaper industry was rarely shy about putting up cover prices. Even in the twilight of print, it has been known to do it. The stalling of online news prices, by contrast, feels telling.

The first explanation for the gravity is money: other people’s. The logic of disposable income is inarguable. People who don’t subscribe or donate to an online news publication, when asked what would most encourage them to pay, are most likely to answer: “If it was cheaper.”

That, at least, was the response of 24 per cent of the non-payers in the Irish component of the Reuters Institute’s mega-survey of digital news consumers, with the next most common answer – cited by 17 per cent – being: “If I could pay one price to access multiple news websites.” Not everyone is suffering from news fatigue, it seems. Some people want to pay for the relatively good stuff – or they say they do. They just don’t want to pay too much.

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How much is too much? For Kevin Doyle, group head of news for Mediahuis Ireland, perceptions of value are still influenced by the only recently ended period of history when Irish newspapers, and others around the world, merrily made their content free online.

“There’s no point going back over the past but there was a terrible mistake made once upon a time where someone decided that news was worthless so that has set in people’s minds,” said Doyle at last week’s Coimisiún na Meán’s briefing on the Reuters Institute study.

Correcting the expectations of the paywall-free era is the challenge certain companies have set for themselves in their bid for financial sustainability. It stands to reason that luring potential subscribers via knock-down prices will undermine this aim in the long term. And yet, compared to print cover prices, knock-down prices are what they are.

“The offers for Irish newspapers online are so cheap. I don’t know how they could be any cheaper, to be honest,” was how Doyle put it.

“The Irish Times, for example, at the moment, I think, gives you a doorbell that is worth more than the cost of your subscription. The Indo has a very cheap rate,” he said.

The Irish Times doorbell in question is a second-generation Ring video doorbell, which actually retails for €99 (not quite more than the cost of a subscription) and has been offered this year to new subscribers to the title’s Premium, Weekend and Complete packages. A Premium subscription costs €16 per month, though there is a €1 introductory rate for the first month, as there is on the €12-per-month Standard package.

Irish Independent publisher Mediahuis Ireland, meanwhile, has been selling its Premium and Premium Plus subscriptions with a 50 per cent first-year discount, which means they cost €4.99 and €6.99 per month respectively for the first 12 months before reverting to €9.99 and €13.99 per month thereafter.

Both news publishers have amassed creditable subscriber bases. The most recent company results for The Irish Times, which introduced online subscriptions in 2015, reported a subscriber total of about 137,000 as of the end of 2021, a figure that includes subscribers to the Irish Examiner’s then freshly launched packages.

Mediahuis, meanwhile, recently indicated that it has 70,000 subscribers across the Irish subsidiary of the Belgian-headquartered group, having only introduced a paywall here in 2020.

Above these price points sits publications such as profitable digital news start-up the Currency, which has built up 6,000 subscribers since autumn 2019 and has done so by charging premium rates to a niche business audience, tapping into its demand for in-depth original journalism.

The Currency charges €5 for the first month, then €25 per month thereafter, or €200 for the first year of annual membership, renewing at a price of €250. Its normal monthly price, therefore, is more than twice the cheapest non-discounted rates available from The Irish Times and Mediahuis Ireland. Among journalists who recognise pricing power when they see it, Currency-envy is a real thing.

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The mass-market online newspaper game is a little more complicated, of course. Reams of free news content are there to satisfy those who know well where to find it. Then there’s the even deeper special offers that float about, such as the “flash sales” periodically advertised by Rupert Murdoch’s the Times and Sunday Times titles, which includes Irish-commissioned content on a Sunday. These are usually set at a price of €5 for the entire 12-month period, then €10 per month.

News publishers, clearly, are still prioritising the expansion of their nascent subscriber tallies over any attempt to bring prices up. The mortality of print makes this strategy understandable. In certain quarters of the industry, however, the heavy discounts have elicited frustration. Former Irish Farmers Journal editor Justin McCarthy told me last month he believed some news publishers were sacrificing long-term revenue by “hugely devaluing” their products.

Doyle, too, has been wondering if the days of podcasts being made freely available on third-party platforms are numbered, suggesting “something will have to give in that space”.

Moving on from the “habit-building” phase to one where publishers dare to increase prices feels a long way off, though. And now – as everyone in the business watching their churn rate already knows – is an especially risky climate in which to try it.

The main reason why people subscribe to a news service is that they value what they get, the Reuters Institute survey found. Some 37 per cent of subscribers cited receiving “better quality” than what they could obtain from free sources. Such perceptions are inevitably price-sensitive and income-dependent, however.

“Right now, people are under a lot of pressure. The media is probably not the highest call on their money,” said Prof Colleen Murrell, co-author of the Irish report on the Reuters Institute study. “If everybody is keeping their prices low, who is going to push that?”

Who indeed? The obvious hurdle presenting itself to news publishers is that to charge more, they will likely have to offer more.