How a reader responsive revenue strategy strengthened Spanish journalism
Good for revenues. Good for journalism. The paywall transition at La Voz de Galicia is paying off, writes Marta Caro and Jacqui Park.
La Voz de Galicia is a 130-year-old regional daily newspaper based in A Coruña, northwestern Spain. Born as a liberal newspaper, it is the highest-circulation newspaper in the Spanish region of Galicia (pop. 2.7 million).
The realisation that the technological capabilities of tech giants like Google, Facebook and Amazon made an advertising model untenable turned La Voz de Galicia into one of the first media outlets in Spain to set up a paywall.
The region’s highest circulation newspaper launched its ad-supported digital edition on May 17, 2000. “But about three or four years ago, we realized we were not competitive enough to yield the necessary revenue to sustain our business”, says Chief Digital Officer Tomás García Morán. “Their technological capability turns us into the weakest link in the value chain, and regional media outlets feel the pain much more than national and international news organizations.”
This frustration, however, led to the launch of a reader revenue strategy.
For García Morán, a reader revenue model is the safest bet to put La Voz de Galicia on a more sustainable path. “There may be other formulas, to be sure, but we don’t like what we’ve seen so far”, he said. “Many local media outlets have disappeared or have been acquired by actors whose interests are beyond journalism.
“Others have turned to digital with a different name and with a clear political agenda to attract readers. That doesn’t mean we won’t do our best to maintain a decent advertising strategy. However, I think that model is peaking. The number of subscribers and the pricing model will determine the future and the size of news media outlets.”
This reader revenue strategy has proven to be a smart move for La Voz de Galicia, especially since the outset of the coronavirus pandemic. “We set up our paywall in November 2019. Before March 2020, we had 3,500 paying digital subscribers”, García said. “By the second half of March 2020, we had doubled that number, reaching a milestone in our strategy. Right now (April 2021), combining new digital subscribers and print and digital subscribers, we have exceeded the 20,000 threshold, more than half of which are pure digital and the rest, print edition subscribers who have activated their subscriber account to consume digital products”.
This surge in paying subscriptions was possible despite the management’s refusal to drop the paywall on coronavirus information, unlike other news media outlets. “There was a hot debate about whether it was appropriate to drop the paywall, but we decided to keep it because we were committed to our existing subscribers and because, well, we had spent 20 years offering online news for free.”
The paywall allows for some free content (up to 15 stories in the web environment) and keeps some premium content exclusive to subscribers.
“There comes a time when you have to make a decision. You can’t just give it all for free. Ours is still a fledgling business, and people are just beginning to understand that paying for news in the digital ecosystem is necessary.”
A change of approach
La Voz de Galicia’s experience during the first wave of the coronavirus pandemic spurred them into rethinking their model. “We have found a balance between a transactional proposition, whereby you pay for a news product, and a support model, where readers pay because they believe in a cause, in a certain editorial project”, García Morán said.
“We are not a newspaper for right wing or left wing readers. We are a newspaper for Galician citizens. But we know we are a key player in our community, so we sent a message asking for support because we are providing and advocating for a public good. This message led to a steep growth in subscriptions, which extended well into the summer.”
For García Morán, part of the newspaper’s value proposition lies in the proximity to its readership, a strategy that is difficult to develop and expensive to maintain. “We run local and regional stories that are widely read across Galicia, and we want to pursue that model and make it sustainable and profitable.”
Betting on a subscription model means knowing your readership well and implementing ways to learn what they want.
How has La Voz de Galicia built a loyal readership?
“We’re not that concerned anymore about reaching a super-large audience but about building a loyal readership. Galicia has a population of 2.7 million. We closed November 2020 with 14 million unique browsers. That is one of the reasons why the advertising model is peaking.
“We are focusing on that cluster of loyal readers. We have a daily average of 1.2 million readers right now, a large number of whom are occasional readers coming from social media. Most of them, about 650,000 users, are highly loyal readers, 300,000 of whom, approximately, are registered.”
To build a loyal readership, García Morán stresses the importance of creating quality content and newsletters. “It took us a while to start sending newsletters, but now we offer 12 newsletters, including niche and hyperlocal content, some sent to more than 100,000 mailboxes every morning with open rates of between 25 and 40 percent.
Hoy en La Voz features the most relevant news of the day and is sent every morning at 8 am to 150,000 subscribers. “That is one of the main ways to get new readers into the funnel and convert subscribers, says García Morán.
The masthead is optimistic about the way the business model shapes their journalism. “The good news about all this is that journalism is back. In today’s media landscape, the performance of journalists is paramount because creating good content may translate into, say, 20 new subscribers per piece, says Garcia Morán.
“Journalists and readers are at the centre of this model. Newspapers have traditionally been unidirectional channels, so this is a paradigm shift, and we as journalists like to see how something we have written is working, even more so amid a serious crisis and in a context in which the sector is transforming.”
What have García Morán and his team learned from this experience?
“We know little about how all this works,” he says. “We are learning every day. Here we are as journalists with little or no previous knowledge of how e-commerce works. We don’t know how people want to spend their money.
“We are learning by the method of trial and error, which, in all modesty, is the way in which Silicon Valley companies have managed to dominate the world.” Garcia Moran says.
For example, he says, the masthead has learnt to be flexible to price.
“We have read for years that in the world of reader revenue you have to come out with a very high price, because then you cannot go up. Well, now we know that, in our case at least, that statement was false. We came out with a low price, because the other big Spanish brands (El País, El Mundo) still had everything free. When they came out, to put it casually, we felt foolish because they were priced higher than ours.
“So, last December we raised the price by + 40% and incorporated the annual subscription. One day to another. And here we are, alive. Since then, we have made more than 4,000 new registrations. We already have 19% annual subscriptions and the churn remains at rates very similar to what we had before all these changes”.
Garcia Moran says their focus right now is on generating “worthy and valuable content, so readers won’t go somewhere else to read it for free”.
In this spirit, the outlet is heading towards a model that puts journalists on the front line so they can decide what content to put behind a paywall and what content deserves to be open, García Morán said.
“And that is something that only journalists can decide. Otherwise, that’s it for us. We are a business run by journalists.”
Marta Caro is an IPI contributor based in Spain.
Jacqui Park is head of network strategy and innovation for IPI and a senior fellow at the Centre for Media Transition at the University of Technology, Sydney.
This story is part of the IPI global network report: Around the corner, around the world: How local news media around the world are rethinking everything
