Leading innovation in journalism
In a major report on the state of journalism, published in November 2012 by the Columbia School of Journalism, the authors gave one recommendation to news organizations – “SURVIVE.”
Part of this challenging task is in finding new revenue streams to finance quality journalism. At Haaretz, one of our main goals in 2012 was to define and implement a paid strategy for our digital entities; a major change for a traditional, print-oriented news organization, founded nearly 100 years ago.
In his blog post on Israelity, Brian Blum criticizes our decision to charge digital readers for our services. “The paper has to figure out a way to make money, or how would I receive any remuneration for my work? But as a reader, I’m frustrated,” he writes.
As I myself am an addicted digital user, who is used to free web content and relates to that ideal, I can sympathize with this frustration, but I would argue that a paid model is the right direction for us.
Let’s start with the basics. Most news organizations have two major sources of revenue – advertising and subscriptions. In recent years both these sources of income have suffered from continued decline at Haaretz – both for its Hebrew edition and its daughter English publication. The latter, which largely publishes translated material, was founded as a joint venture with The International Herald Tribune in 1997, the same year the paper launched its Hebrew and English web sites (www.haaretz.co.il and www.haaretz.com respectively).
Echoing the troubles of other newspapers around the world, Haaretz lost high-margin classified ad business to free websites (such as www.yad2.co.il, the Israeli equivalent to www.craigslist.org), advertisers switched to performance-based campaigns and partly abandoned print, plus the global recession and the local social protests led to a 10% drop in overall ad revenue in 2012. According to reports in TheMarker, additional declines are expected in 2013. Aging print readership and the wide distribution of the free Israel Hayom newspaper are also further reducing income from subscribers.
With this in mind, we have been increasingly focusing our attention on the digital sphere – where the majority of our readers, both in Hebrew and in English, consume Haaretz content. At present, three million unique users visit Haaretz.com per month. More than 65% of these live in North America and about 12% in Israel. This high foreign-based usage and the loyalty of Haaretz digital readers presented a business opportunity – to start charging those who have no option to subscribe to a Haaretz print product due to their location.
Following in the footsteps of the New York Times, FT, The Wall Street Journal and other major international publications, in May 2012 Haaretz shifted its digital strategy and began offering digital subscriptions. We asked our loyal readers to register in order to read up to ten free articles a month, or to pay $95 a year for unlimited access.
In the last seven months more than 135,000 users have registered with Haaretz, while the number of digital subscribers is a five-digit figure. Since access through Google, Facebook and Twitter is largely free, the number of unique users has remained stable. Overall, in the last seven months the advertising revenues have also remained stable, while the subscriptions added income.
Our innovative digital strategy received praise and attention on Harvard Journalism School’s prestigious Niemanlab blog in September 2012. “We can derive larger, even universal, truths from the Haaretz experience,” wrote Ken Doctor. The article goes into the “If you don’t charge them, they won’t pay” mantra, discusses the value of building a database of readers, lauds adding mobile entities with iPhone, iPad and Android editions, and emphasizes that newspapers must “back up your offer with…journalism.”
Hundreds of items are published on Haaretz platforms every single day. Over the past eighteen months, Haaretz has added editors, writers and contributors in Israel, the U.S., the U.K. and across the Jewish world. All create original material for digital readers. A dozen bloggers enrich the site’s content.
Haaretz’s example can be treated as a test case, which proves that frequent consumers are willing to pay for digital content if it’s branded, upgraded and more suited to their needs than the free alternatives.
* Lior Kodner is the Head of Digital in Haaretz.