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May 28, 2017
Friday, May 19, 2017

The Clarín Group is watching you

By Marcelo J. García
For The Herald

Influential media company explores the world of metered paywalls

Since 2014, the Clarín local newspaper has been monitoring the reading habits of its 1.3 million web users. Starting April 24, the web version of the newspaper became the first publication in Argentina to introduce a metered paywall for its online content.

“We feel comfortable with this new launch and we expect to see good results,” said Agustín Medina Manson, head of Investor Relations at the Clarín Group during a conference call on May 12, in which he presented the company’s financial results for the first quarter. “This model has been successful for many publishers around the world.”

From now on, after your read 40 free-of-charge articles on Clarín’s website, you will crash onto the paywall, which offers two subscription options. For 19.90 pesos a month, the reader gets full access to the website. For 49.90 pesos, readers get full digital access plus also the print version of the paper and Clarín’s loyalty card (called 360), which get you discounts and other benefits. After the first six months, the cost of subscriptions climb to 74.90 and 164.90 pesos, respectively.

“We are finally making a move to monetise our quality journalism in the digital era,” Medina Manson told the analysts.

Clarín is the best-selling newspaper in the country and one of the biggest in the Spanish-speaking world. As with most newspapers everywhere though, its print circulation has been declining consistently over the last few years.

Falling numbers

In 2013, a year before the company started its digital monitoring system that has resulted in today’s paywall, the printed version of the newspaper would sell on average 340,000 copies a day. In the first quarter of the year, according to the results the company posted, circulation was down to 212,000, 14 percent lower than a year ago. The company’s management had hoped that its 360 loyalty card subscription model would curb the decline in circulation. It did not.

The good news for Clarín, however, is that its circulation share only declined marginally from 40.6 to 40.1 percent, meaning four of every 10 newspapers sold in the country is a copy of Clarín.

According to a report by Comscore, on average each one of Clarín’s 8.1 million web readers clicks on 31 stories a month. This means the paywall is targeting a minority of readers. A company source said that a “one-percent subscription rate” (namely 80,000 readers) would be a good start for the first year.

Metered paywalls like Clarín’s are becoming the new norm in journalism’s digital realm, and is, so far, the only business model known to have returned decent results in the harsh context of the all-is-free social media world. In the United States, 80 percent of the newspapers with circulations larger than 50,000 a day have incorporated some sort of paywall, according to a study by the American Press Institute. The average number of free articles you get before you have to pay is 10 (thank you,Clarín, for the extra free reading).

The most emblematic case is that of the New York Times, which launched its metered wall in March, 2011. The Times also posted results this month and said that it had added a record number of 308,000 new digital subscribers in the first quarter of the year to reach 2.2 million. “This first quarter was the single best quarter for subscriber growth in our history,” said Mark Thomson, president and chief executive officer of The New York Times Company.

Digital subscription is now driving the Times’ economic results.

The “Old Gray Lady” might be too high a bar for the rookie Clarín Group to look up to, but the company’s executives are taking a close look at the press in neighbouring Brazil, where metered paywalls have been up and running for a while. Folha de São Paulo was the first newspaper in Brazil to introduce the system in 2012 — last year, the paper’s digital subscriptions surpassed those of the print subscription.

The economy according to Clarín

Meanwhile, the picture of the country being painted by the newspaper’s front pages does not necessarily coincide verbatim with Grupo Clarín’s corporate vision of reality.

In the aforementioned May 12 call, the company’s investor relations team noted that although the country was showing “further progress” in its “economic normalisation,” the process was actually moving along “slower than originally expected.”

Growth, commented Medina Manson, was mainly coming from the country’s powerful farming sector; and the rate of inflation was exceeding so far the Central Bank’s “aggressive” target of 12 to 17 percent for the whole year. The “consensus” Grupo Clarín presented to the analysts indicated that the cost of living would go up by 21 percent this year and the government’s GDP growth estimate of 3.5 percent had to be revised down to 2.7 percent.

But there was good news too.

“Despite this challenging macroeconomic environment, our business has performed very well,” said Medina Manson. “Well,” in this case, means that the shareholders were given in the first quarter dividends of 1.8 billion pesos, 62 percent higher than a year earlier. The group’s golden goose (over 90%) in terms of earnings is cable television distribution and Internet access. No paywall can beat that.

@mjotagarcia

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