The Paywall Gambit

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Last week, Reuters and CNN became the latest legacy news companies to put up paywalls, billed as the opening acts of sweeping digital reinvention. The two organizations have much in common: each debuted digital coverage for free in 1995 and is now in the process of deciphering what offerings might persuade readers to subscribe. Their efforts come at a time when ad revenue is down, along with the market for volume-driven journalism, and, according to recent Pew research, an overwhelming majority of Americans—86 percent—get at least some news from their digital devices. As Greg Piechota, the researcher-in-residence at the International News Media Association, has observed, most of those readers don’t pay for the news they consume. But many are willing to do so, for the right price, and there is global demand. “Most individual national news brands worldwide reach, with their paid online products, less than 1 percent of households in their markets,” he said.

For Reuters, best known for its licensing business, the paywall is aimed at growing its direct-to-consumer arm, Reuters Professional, so named to reflect its target audience of executives and the aspiring C-suite set. (The tagline of Reuters Professional: “The definitive destination for global intelligence that informs smart decision-making.”) Canadian visitors to the Reuters website and app will now be charged a dollar per week. To follow in the months ahead: a rollout in the United States, also priced at a dollar, and in the United Kingdom, at the cost of a British pound. Eventually, the paywall will go fully global. The pricing plan is designed to make Reuters accessible to a large international audience “in a way that is as simple as possible,” Josh London, the head of Reuters Professional, told me. “We think that the world needs reliable sources to know what’s really happening and wanted to make sure that we continue to reach the widest audience of global readers.” As for the fee, “it gives us the resources to both expand our audience and strengthen our digital experiences and return to invest back into the business.”  

Reuters began registering its digital audience in 2021, and has since tracked readers from 240 countries and territories around the world; the company says that it has between forty-five and fifty million unique visitors per month. The new initiative, London said, is meant to “complement” existing offerings, which “remain healthy, with year over year growth in revenue and margins.” He declined to reveal targets, current revenue, or future plans; the company has not decided yet whether the paywall will remain a hard one, or switch to a dynamic model. “We will watch the data, we’ll adapt, and we’ll learn as we go,” he said. He believes that the company’s reputation—Reuters ranks high in trust ratings—bodes well. “We don’t do opinions. We don’t try to tell people what to think, what to buy, what to make for dinner. We have a narrower focus that’s focused on delivering facts versus the breadth of other news organizations,” he said. “We think that’s very attractive.” 

For CNN—which will ask visitors who exceed a set (undisclosed) threshold of stories to pay $3.99 a month or a discounted rate of $29.99 a year—the paywall is part of a long-term transformation that its CEO, Mark Thompson, has called “existential.” In a statement, CNN billed the paywall as a move toward “reclaiming CNN’s pioneering spirit” and “regaining a leadership position in developing the news experiences of the future,” a message echoed by Alex MacCallum, CNN’s executive vice president of digital products and services, in an email to staff. “This launch is just the first step in CNN’s journey to become a more consumer-oriented digital product company,” she wrote. In the months ahead, “we will create new products and businesses, build new capabilities in product, engineering, data and subscriptions, and evolve how we work.” That includes developing CNN’s analytics infrastructure, as the company tracks the behavior of those who sign up to access the site.

By its own estimate, CNN has 150 million unique visitors to its website and app per month. The hope is to begin capitalizing on that audience, as television viewership has fallen. Over the past four years, the number of cable subscribers has dropped by a third; ratings are down; this year, for the first time, advertisers are projected to spend more on digital video platforms and retail media than on TV. The median age of CNN’s cable viewers is sixty-seven; most younger people get their news through other means. Between 2020 and 2023, CNN’s revenue fell from roughly a billion dollars to 892 million dollars.

CNN expects that its digital strategy will require patience. Thompson, who assumed the helm of the network this time last year, had previously overseen a digital reimagining of the New York Times, where he retired as CEO, leaving behind a thriving subscription business. That took a while: the Times put up its paywall in March 2011, with the aim of doubling digital revenue; over the course of a decade, the company met and exceeded that goal. But the Times is a family shop; CNN—owned by Warner Bros. Discovery, which has its own financial worries—may need to show results faster. When he arrived, Thompson promised CNN staff “a new revolution,” and executives have since talked up plans to “reimagine CNN for a vertical mobile-oriented format.” Overseeing the effort is MacCallum, who worked under Thompson at the Times and served as the general manager of CNN+, a subscription streaming service developed under the network’s previous leadership—until it was shut down, after a month. Emily Kuhn, a spokesperson for CNN, argued that the two subscription products should not be compared. “CNN+ was a bespoke, brand-new streaming service—with a starting audience of zero—that had custom video content and shows built for a paying subscription audience,” she said. “This new CNN.com subscription offering is our existing reporting and website that services millions upon millions of people every day.”

On Friday, CNN released its first subscriber-exclusive content, displayed on its homepage: a short documentary (a “Flash Doc”) exploring the role of masculinity in political campaigns. The “Flash Docs unit”—established as part of CNN+ in 2022 to produce short, timely, and topical pop culture stories—will develop a series of under-ten-minute documentaries; other products will aim to help subscribers “live a better life” with lifestyle coverage and, per MacCallum’s memo, offer “exclusive election features.” Subscribers will also see fewer ads. The paywall will not apply to everything—and there are plenty of downsides to weigh, as more outlets require audiences to pay for essential news. CNN is making vertical video, for one, freely available to all.

The young people most attached to their phones tend to be less interested in news, as Rick Edmonds, a media business analyst for the Poynter Institute, told me, but they seem to be more willing to pay for it. “They’re living in a world where you’ve got to pay for entertainment and you’ve got to maybe pay for Amazon Prime and the rest, so it doesn’t sound unnatural to be asked to pay,” he said. According to analysis by the Reuters Institute at the University of Oxford, which conducts a major annual survey of news consumers, the potential US market for paid news online could more than double what it’s been. Across twenty major world markets, the analysis found, the potential average consumer penetration stands at 53 percent—or 3.5 times—more than what it is today. “In my opinion, there is no subscription ceiling for online news,” Piechota told me. “Imagine that you are standing in front of the One World Trade skyscraper in downtown New York and looking up to the top observation deck. Most news brands have reached only the first floor, and the one hundredth floor is far away up in the clouds.”

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Adam Piore is a longtime CJR contributor and the author of The Accidental Terrorist, The Body Builders: Inside the Science of the Engineered Human, and, most recently, The New Kings of New York: Renegades, Moguls, Gamblers and the Remaking of the World’s Most Famous Skyline.