Google’s paywall penalty has been a major barrier for traditional publishers trying to embrace a subscription-based journalism online – but the transition is not impossible.
Last week, News Corp's executive chair Michael Miller called it out in the Australian Financial Review, but it’s a problem that has plagued traditional publishers for many years.
I encountered it nearly a decade ago when I was group editor of global accounting titles that were purely subscription-based.
Back then we were looking to build a much better online presence while retaining the strict subscription revenue that powered our business.
Google wouldn’t allow our pages to be properly ranked if they were behind a paywall and as a compromise we had to make some of our news free.
It was an uncomfortable compromise due to the very high subscription fees we charged and as a result a small number of subscribers dropped off because they no longer saw the premium content as enough to justify the fee.
I sympathise with Miller’s position on this and believe that Google, if it’s serious about helping preserve high quality journalism, should work with the industry in finding an amicable solution.
Should Google searches produce the best quality information or merely the best quality information that is easy to access?
Google’s position on this is that paywalls affect the user journey and this tarnishes the utility of the search engine.
It’s a view I don’t share if search results are clearly signposted and users can decide if they want to click on a ‘subscription’ story.
Google allows a first click free solution which means someone searching for an article on Google they can click onto one article for free before a paywall comes into effect. This aims to appease Google's ability to crawl content and index articles but eliminates the whole point of paid-for journalism and will mean a lot of traffic is lost.
When I asked Google about whether there is a paywall penalty and how it works, I was directed to a page that explained their official line about user journey.
Google's monopoly allows it to dictate
Google has a monopoly on search (estimated at around 80% of search traffic globally) and can pretty much set the rules as it pleases irrespective of how that suits struggling publishers looking for a new way to fund their journalism.
While a paywall penalty applies to news, it doesn’t seem to apply to paid-for video and music content in the same way.
If you want to want to watch Game of Thrones, which will usually cost searches a fee, it’s pretty high up on a Google search across various different websites that offer it, with HBO naturally being at the top.
I believe there is an opportunity for Google to work closely with publishers as they transition away from ad-funded models to ensure paid-for journalism isn’t punished.
Google isn't duty bound to do this. At the end of the day, it’s a business and has to protect its commercial interests.
However, a sustainable and strong local media sector is very much in Google’s interest, as it is Facebook’s and the wider Australian public.
Publisher's conundrum
There’s an awkward irony about publishers complaining about the dominance of Google and Facebook.
It is true these digital behemoths are hoovering up most of the growth (at least 90%) in digital media budgets even if, as Google Australia MD Jason Pellegrino explains, there isn't a like for like comparison when it comes to display advertising and search.
The reality is publishers, including AdNews, feed Facebook sticky and engaging content that makes these platforms a more attractive proposition for users, keeping them on platform for longer and providing greater opportunities for Facebook to commercialise at the expense of publishers that feed them.
Too slow to react
It’s important to note that news organisations partly have themselves to blame for the situation they find themselves in today.
It was naïve and short-sighted for news brands to ever publish online content for free without considering how this might cannibalise print or devalue journalism in the future.
Mark Ritson’s comment piece in The Australian last week touches on this and News Corp digital boss Nicole Sheffield also alluded to it at the AdNews Media + Marketing Summit recently.
In those earlier years in the 2000s, it may have been the case that online content was an afterthought, a value-add for readers where it was uploaded after everything went to print. Print was so strong back then, it didn’t matter. That certainly was the sentiment at companies I used to work for.
Unfortunately, this apathy towards online publishing in those earlier years fostered a reader expectation that you could get news and analysis for free.
Transitioning to paid-for journalism
This free news addiction will be incredibly difficult to overcome, but it isn't insurmountable.
The New York Times provides an example of a large scale news brand making the transition in a profitable way.
It generates $242.4 million in circulation revenue (a combination of print and online) and only $130 million in advertising in the first quarter of 2017.
Importantly, and for the first time since transitioning to a subscription-based model, the publisher made a $13.2 million profit.
The Saturday Paper is an example of a much smaller, niche newsbrand that produces high quality journalism and is primarily funded though subscriptions.
The Guardian refuses to impose a paywall because it believes readers should be free to access its content, but how long it can survive on philanthropy and reader donations remains to be seen.
All three mastheads produce some of the finest journalism in their respective countries.
Two are legacy brands that already had huge print audiences, while the other has emerged in more recent times but has grown online without resorting to clickbait and other traffic acquisition tricks.
In The Saturday Paper, Mike Secombe’s analysis on the state of journalism provides insights into other journalism models in Europe, where governments partly subsidise private news organisations while allowing editorial independence.
Selling out legacy is a recipe for failure
The transition from ad-funded models to more paid-for will be a bumpy journey for publications of all sizes but one lesson is clear.
Serious news brands that compromise on quality with clickbait and downmarket journalism online will eventually lose.
As I have written previously, The Independent in the UK is one example of where this dual strategy failed. It killed its print title, which was already struggling, and almost destroyed its website as disillusioned loyal readers fled to The Guardian.
The Independent has, thankfully, been able to reposition its online brand as more upmarket since its sole focus became online and its traffic has improved.
Short-sighted decisions that focus on quantity over quality that are at odds with a newsbrands legacy may produce short-term success, but I question if they will be sustainable in the long-term.
News is a tough and extremely competitive market and readers have more choice and control than ever before.
For publishers, staying true to your brand and what it stands for is more important now than it ever has been in the difficult journey ahead, with or without Google’s help.