In the wake of the failed experiment that was CNN+, the news outlet’s website visitors are beginning to see something new: a CNN paywall.
The CNN paywall is inviting some of the site’s users to subscribe for a monthly or yearly fee. They’re not asking for much in the grand scheme of things. Subscribers can choose to pay $3.99 per month, which works out to about $1 per week. But there’s also a $29.99 per year option, which works out to be about 58¢ per week.
These days, even $3.99 is cheaper than a cup of coffee, now that coffee shops like Starbucks charge for a “coffee experience” rather than just a cup of joe.
But is $3.99 per month — or $30 per year — still too big a price for people to agree to pay?
What you get for the money
Subscribers will see fewer digital ads, KTLA reports. For some people, seeing fewer adds might make the relatively low price seem more reasonable.
The subscription also includes unlimited visits to the site, exclusive election features, original documentaries and what they describe as “a curated daily selection of their most distinctive journalism.”
The CNN paywall will inevitably turn some people off. The same thing happened years ago when newspapers added their own paywalls. Suddenly, these websites — which had always been free — now demanded payments.
Convincing readers to ‘buy in’
The majority of news consumers don’t realize how much journalism costs to produce. They also don’t realize how much robust websites like CNN’s cost to host and manage.
Frankly, they shouldn’t be aware of it. They shouldn’t even have to ponder such details. They want to assume that an established outlet like CNN is doing just fine. Instead of the cost of their work, the reader just wants the information. This is the Information Age, after all.
The reality of the digital world, unfortunately, is that the return on investment tends to be low compared to broadcast television has been. The day will come when that will change. But you see less revenue on the digital side of things unless you’re really able to do well in selling advertising.
Or, if you’re able to convince visitors to become subscribers.
For newspapers, that became essential as print production and distribution costs skyrocketed. They had to keep raising prices for print subscriptions. At the same time, to further cut costs, they cut the size and content of their papers. Every time I visit home and I see the newspaper I grew up with, I’m shocked by the physical size of it. It’s smaller and much thinner than it was when I was younger.
Shrinkflation, at least in the physical paper, is a reality. But newspaper websites at least give the added value of being able to look up old stories, something you couldn’t do unless you kept a lot of old papers and knew where (and when) to look when you wanted to find an older article on a particular topic.
Maintaining a large website with a large archive costs money. The more web traffic you have, the more website owners find themselves paying. Being successful can be a double-edged sword.
Local television stations rarely have paywalls. I hope they never have to go that route. Since TV is more video-dependent, those sites can run preroll video ads — essentially commercials — before videos to bring in extra ad revenue.
CNN has preroll, too. But CNN also has a problem that hits cable networks particularly hard: cord cutting. The number of cable subscribers is down, which means the amount of subscriber dollars from cable companies is also down. CNN doesn’t have traditional TV affiliates, so cable is a major source of income. When it dwindles, they have to look for ways to recoup that money.
Enter the CNN paywall.
Are you paying?
If you value their content, you might consider paying. If you think they’re on the wrong side of the table, you probably wouldn’t agree to pay a penny a year. (Although you may, curiously enough, continue visiting their site even though you don’t trust what they report. I see that a lot on multiple sites.)
A $30-per-year bill isn’t outrageous. Compare that to what your local newspapers charge for subscriptions!
CNN has a massive number of regular visitors, so despite needing to look for ways to bring in revenue, they can afford to charge a more “reasonable” subscription rate.
But you’ve been getting CNN content free for years now. Would you actually agree to pay for it all these years later?
That’s the challenge all media outlets who’ve never had a paywall must face.
And if you’re a news consumer, the question you have to answer is how much the content is worth to you — and can you live without it if you choose not to subscribe!
They will lose viewership and harm their underlying revenue projections from their ad base. Viewership down … means lower rates from ads placed. Dumb move.