Why It Took So Long To Build The Pyramids

Michael Hedges November 15, 2018 Follow on Twitter

Scale is important to innovation. Anybody in the digital realm knows this, those fighting for digital transition in particular. Big publishers looking for digital traction very often look to work with competitors for scalable solutions. The problem is anti-trust law is a firewall to protect consumers from such collusion.

Spain’s news publishers are, more or less, united in adopting paywalls for their digital platforms. That is not to say they are excited. All fully accept that print circulation, kiosk sales and subscriptions are still falling. Advertising revenues, digital and otherwise, are not keeping up. The only solution they see is the paywall, one form or another.

Their hesitation, so far, is purely competitive with an added, and significant, fear of being first out of the box with a comprehensive digital revenue strategy. As the famous business strategy saying goes: nobody wants to be serial number 001. Spain’s dozen or so major national newspapers are published by four significant companies. There is no real market - or brand - leader. They are, informally, talking.

Whether in concert or not, “the big traditional newspapers have closed ranks to launch paywalls for digital content in an imminent way,” said El Español (September 19). End of June next year is the target date to put digital content behind the paywall. The idea is to force other publishers to follow suit and give consumers fewer options.

ABC publisher Vocento, in financial crisis for many months, reported €1.4 million in losses for the nine months of 2018 (November 14). Income was down 3.6% against the previous year but losses have been cut 70%. Newspaper revenues were down 3.5% but digital TV was up 21.5%. Vocento, like other Spanish publishers, is diversifying. The company statement made no mention of an imminent paywall for ABC. Chief executive Luis Enríquez suggested that paywalls might be “incorporated” into regional publications “within the next two years.”

Hopes have been raised for a different revenue stream for Spanish publishers. In October the government took another stab at an ad revenue tax to raid Google and other search engines to benefit Spanish publishers. An earlier measure to punish Google News - and others - with a link tax failed miserably as Google simple closed its Spanish search component. The current attempt might fail EU State Aid rules. More important in Spain, it reaches into publishers that have recently diversified into the digital realm, notable Grupo Prisa, publisher of El Pais.

“People are starting to appreciate the idea that if you want access to premium content, you must pay for it,” said INMA researcher-in-residence Grzegorz Piechota last week at the groups customer engagement conference in Miami. He, like others, argued that Netflix, for video, and Spotify, for audio, have increased the willingness to pay and has changed consumer behavior. Newspaper people point quickly to the three million paying subscribers for the New York Times, with a metered paywall. Fewer mention the million paying contributors for the Guardian (UK), without a paywall.

Any paywall plan in Spain, coordinated or ad hoc, will certainly come gradually, remarked Dircomfidencial (November 4). All are “assessing the risks that (paywalls) would have on advertising and traffic.” In recent weeks, little snippets have appeared in El Pais drawing attention to the importance of paying for quality journalism.

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