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Paywalls, Newsletters, and the New Echo Chamber

by | Dec 7, 2020 | New, News

Attitude is a little thing that makes a big difference.

— Winston Churchill

It’s difficult to visit a website today without being warned that you’re on your last free article. With social media devouring traffic, ad revenue collapsing, and layoffs ripping through the industry, paywalls are helping publications survive. Some are even thriving: The New York Times added a record 587,000 subscribers in the first quarter of 2020. Defector, which rose from the ashes of the horrendous private equity mismanagement of Deadspin, was dubbed the potential “future of media” in a New Republic article that said the new venture was on track to make at least $2 million per year in subscription fees.

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Creators deserve to be paid, and readers are saying these publications are worth the cost. The relaunch of Deadspin’s zombified corpse, despite being free, pulled in an embarrassing 10 percent of the traffic the site managed before the exodus of its beloved writers. But as paywalls grow more common (76 percent of American newspapers used them in 2019, up from 60 percent just two years prior) and stricter (publications are getting better at sussing out incognito mode and other tricks to dodge paywalls), most readers are still only willing to pay for one online news subscription. The media landscape, then, may come to resemble what it looked like before the internet, where it was difficult and expensive for any one consumer to traverse a wide range of viewpoints.

Just how far will this fragmentation go? Consider the case of streaming video. Subscription libraries of movies and TV shows are orders of magnitude more popular than those for the written word: The New York Times has 6.5 million subscribers, while Netflix has 183 million. But even there, as of mid-2019, the average American was spending just $29 a month, on an average of 3.4 streaming services. Even if readers turn out to be willing to spend that much for online publications, it won’t get them very far. Subscribe to both The New York Times ($17 per month) and Defector ($8 per month), and you’ve already used up most of your budget. A Washington Post subscription ($8.33 per month), your local paper (the Denver Post is $14.99 per month), and one or two Substacks (popular ex-Buzzfeed journalist Anne Helen Petersen charges $5 per month for her newsletter) would also zero out your budget; as would a single subscription to The Boston Globe ($27.72 per month).

Unless readers are willing to spend a lot of money—and substantially more than they spend on watching videos—it simply won’t be financially viable for them to consume a lot of internet content. Not coincidentally, a lot of internet content won’t be financially viable, either. The New York Times’ 587,000 new subscriptions outnumbered the combined efforts of 261 local papers across America. In a 2017 analysis by The Outline (one of many sites to perish in recent months), only 2 percent of Patreons were earning the equivalent of $7.25 an hour from content creation, and less than half of those people hit the vaguely livable $15 an hour. Far from every Patreon is a full-time endeavor, but there’s still a wide gap between the flashy success stories and everyone else.

The same problem appears to be reaching Substack. There’s long been a theory that if you can find 1,000 fans willing to pay you five dollars a month then you can make a comfortable $60,000 living online, and Substack was hyped as a simple execution of that concept. But where are those 1,000 readers going to come from when everyone’s pouring their money into legacy publications, and specialist sites such as Defector and The Athletic?

There are fears of a Substack bubble, too, and the financial pressure added by having more and more large and mid-tier publications taking the paywall route won’t help. We’re already at a point where so many streaming services are available that, according to a 2019 Deloitte study, users are suffering from “streaming fatigue.” People find toggling between subscriptions, managing all their logins, and trying to track down the content they want annoying and, aside from the complete failure of some services like Quibi, early evidence suggests that piracy is threatening a comeback if streaming services don’t improve their user experience. Online, 2019 saw the beginning of a war between publishers and paywall-jumping browser extensions created for frustrated (or cheap) users.

None of this is inherently bad. It’s certainly no worse than having writers grind out posts that read “EXCLUSIVE: Batman rumored to be in the new Batman movie?” to satisfy social media algorithms for sites that are 80 percent ads. But there are questions about who can afford to create content and who can afford to consume it. We appear to be moving towards a stratified internet for news, where a few huge success stories are supported by well-off readers, and then … everyone else.

That could leave us in a different sort of echo-chamber than the one we’re in already. Right now, social platforms capture us in algorithmic bubbles of personalized (and often polarizing) content. In the near future, those bubbles could be budgetary: a cap on the number of sites we can read on a regular basis, and on our exposure to diverse perspectives. Quoted in a 2018 AFP article, journalism professor Damian Radcliffe and digital media analyst Rebecca Lieb warned of a coming digital divide. Limited by financial realities, smaller publications may struggle for subscribers while not everyone will be able to afford access to high-quality news, they said. “There is a risk those audiences don't get access to the range of information and journalism they need to stay informed in the current era,” said Radcliffe.

We appear to be moving towards a stratified internet for news, where a few huge success stories are supported by well-off readers, and then … everyone else.

In 2020, that risk appears to be growing larger. Via email, Radcliffe noted that more paywalls have popped up since 2018, giving a typical consumer two likely scenarios. “The first is an increased likelihood that some people’s media diets will become narrower, relying on a smaller breadth of [paid] sources,” Radcliffe wrote. “The second scenario is that people who are priced out of news—or who do not see paying for news as a priority—will be pushed towards free news, some of which is more dubious in nature.” In other words, the news sites that do extensive reporting will be expensive, while the “news” sites that churn outrage and spin tales of secret pedophile cabals remain cheap; and the cost of the former could send unsuspecting consumers towards the latter. Paid news may come to resemble the pre-internet news landscape, but now every digital corner will have a modern John Birch Society hawking free stories about communists poisoning the water supply.

If the paywall sites are going to attract more consumers, and provide them safe harbor from the free-news vortex, then Radcliffe says they’ll need to make a better case for why it’s worth the money. That means letting people know the actual cost of producing journalism, and what’s at risk if you don’t financially support it. Otherwise, big publications will only serve a minority of the population, small publications will struggle to survive, and people who have grown accustomed to free news will continue to seek it out, even if it ends up not really being news at all.

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