This article is by Carina Tenor, Polis Research Fellow in the Department of Media and Communications, London School of Economics.
After several attempts, 2017 is the year when all major local media group in Sweden go for paywalls to save quality online journalism. This is our third go, and the best one, says Robin Govik, Chief Digital Officer at Mittmedia, the largest local media group in Sweden. But he would not explain the tipping point as a question of timing: This is not about online readers finally maturing into paying for content. Rather, these are ‘pistol to the head’ initiatives in order to secure the future for local news.
At the same time the first steps is taken towards what could be called a ‘Netflix solution’ for local news: Four media groups have started collaborating under the name Plus Network Sweden (Plusnätverket) referring to content behind pay walls labelled Plus (+). The network set a joint standard for pricing as well as giving each other’s digital subscribers access to all content behind paywalls.
Many companies have been experimenting with metered content and freemium, but this more definite and joint transition towards a readership paid business model for local news has only started, and is actually happening right now. In October the daily paper Skånska Dagbladet announced that they will also set up a digital paywall. Thereby the last of the Swedish regional newspaper companies has chosen a business model of paid online content (Marklund 2017).
The success of Scandinavian local papers is interesting from an international perspective – but they have not actually succeeded yet, says Axel Andén, Editor-in-chief at Medievärlden, reporting on the Swedish news industry. Paying for online news is of course nothing new, underlines Axel Andén. He is referring to big players like The Economist, Financial Times, Wall Street Journal – or even the Swedish national newspaper Dagens Nyheter. The difference with the Nordic model is the effort to fund local journalism with online subscriptions.
Nordic countries have the advantage of a strong tradition of subscribed daily newspapers, distributed to letter boxes in early mornings, later combined with free news sites. But the well-known changes due to digital development along with new media habits have had its severe effects here as well: For example, every fourth local newsroom was shut in Sweden in the years 2004–2014, and the number of journalists decreased by 25 per cent.
The last couple of years it has become more and more evident that global competition from actors like Google and Facebook makes it hard to transform substantial revenue streams from print ads to online ads. Facing the same challenges in different parts of the world is of course making the Nordic example very interesting, labelled as “gold standard in digital subscriptions” by Earl J. Wilkinson, Executive Director of The International News Media Association, INMA, after a recent study tour. The Nordic model is also highlighted in Reuter Institute Digital News report 2017, stating that the percentage of on-going online subscriptions is now the highest in Norway (15 %), Sweden (12 %) and Denmark (10 %), and Finland (7%) is also mentioned.
Where this development will end no one yet knows. In September 2016, Mittmedia, inspired by the Norwegian Amedia chain launched the project Paid Content 3.0. Starting in January 2017, paywalls were subsequently set up one by one for the 20 local web sites. A year later, the number of digital customers has increased by 220 %. Govik explains the difference from earlier attempts that gut feeling is replaced by data analysis, and journalistic content actively used to increase incentives to pay. In numbers, Mittmedia now have 48,000 digital-only customers – however, a bit surprising, the company found that print subscribers constitutes an even larger group of digital users.
As Amedia shared their strategies with Mittmedia, Mittmedia has also started a modest knowledge exchange with a few local news companies in the UK. The impression so far is that British organisations seem to have greater difficulties to create co-operation between sales and editorial staff compared to Sweden, and also more of hierarchy. “We have a much less prestigious approach, where people from different departments can take part in innovation”, says Robin Govik.
In Sweden, another strengthening action is taken: Four media groups providing local news (VK, Sörmlands Media, Hallpressen and Mittmedia) joining forces. More media groups have already shown an interest to join Sweden Plus Network in a near future.
The four purposes of the network at this stage are mainly:
- Creating a common standard – such as technical solutions, customer roles and paywall pricing (currently 99 SEK=£9/month)
- Facilitating editorial collaborations between editors-in-chiefs – one example is the coverage of the Swedish election 2018 with the same hashtag #kandulova [will you promise]
- Facilitating news production collaborations – such as live broadcasting of local sports, already put in action for the first time October 2017
- Technical analysis
Axel Andén, Medievärlden, thinks that the customer benefit of accessing the content of several local newspapers is limited: For commuters, or people wanting to stay updated on their home town or summer house area, the Sweden Plus Network could add value, but it will probably not lead to an increased number of subscriptions, he thinks. “It will be as when you buy a gym card that can be used all over the country. At the time you think it is a good idea, but then of course, you never do.” Yet another value could be found on social media: When you post links to interesting local news articles, you know more people can actually read them. This will become even more interesting if the large local media groups Gota and NTM join the network – and provided there is a user-friendly technical solution to browse all sites. Axel Andén think the greater benefit could be creative collaborations – and of course the immediate gain in sharing costs for coverage of events with local interest for different parts of Sweden, as the sports example above.
In conclusion, local media groups in the Nordic countries can be an inspiring example of an alternative road path for funding local news – instead of click baits, cultivating loyalty behaviour from local online readers, learning more about what content they find worth paying for.
Local media companies also seem willing to share their experiences and knowledge, since they do not (often) compete on the same market.
Still – it is too early to say that local news companies in Scandinavia have found a silver bullet solution in this changing media landscape: They are still experimenting, and there are also specific national traditions. In addition, there is the reality of major revenues still deriving from print. If these drop considerably, what local journalism will the news groups be able to provide, and will it still be worth paying for?
If you are interested in her research, then you may contact her at C.Tenor@lse.ac.uk.