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Condé Nast to Put All Titles Behind Paywalls by Year End - WSJ 1/30/2019 Condé Nast to Put All Titles Behind Paywalls by Year End - WSJ ON CALL WITH WSJ Join WSJ journalists as they discuss what global trade disputes, tech earnings and interest rates mean for inancial markets in 2019. Register Now This copy is for your personal, non­commercial use only. To order presentation­ready copies for distribution to your colleagues, clients or customers visit https://www.djreprints.com. https://www.wsj.com/articles/conde­nast­to­put­all­titles­behind­paywalls­by­year­end­11548244800 MEDIA & MARKETING Condé Nast to Put All Titles Behind Paywalls by Year End Magazine publisher expects subscription revenue to increase signiicantly The New Yorker, which introduced its metered paywall in 2014, has seen strong growth in paid subscription revenue. PHOTO: RICHARD B. LEVINELEVINE ROBERTSNEWSCOMZUMA PRESS By Jeffrey A. Trachtenberg Updated Jan. 23, 2019 100 p.m. ET Magazine publisher Condé Nast said it would put all its titles behind paywalls by the end of the year, as pressure builds on major publishers to generate more revenue beyond advertising. Three Condé Nast titles, the New Yorker, Vanity Fair and Wired, already are behind metered paywalls that require consumers to subscribe in order to access more than four articles each https://www.wsj.com/articles/conde-nast-to-put-all-titles-behind-paywalls-by-year-end-11548244800 1/4 1/30/2019 Condé Nast to Put All Titles Behind Paywalls by Year End - WSJ month. Now, the company plans to build digital subscription businesses around its other titles, including Vogue, GQ, Bon Appétit and Glamour. More publishers, from news outlets to digital-media specialists to magazines, are turning to paywalls in response to challenges in their businesses. Condé Nast is searching for ways to revive its growth, as print advertising continues to fade and as competing for digital ad dollars against titans like Alphabet Inc.’s Google and Facebook Inc. is proving tough. Paywalls are a key element of its turnaround plans. “When you put a price tag on something, that must mean you have confidence in the product,” said Pamela Drucker Mann, Condé Nast’s chief revenue and marketing officer, who pushed for the paywalls. She said she didn’t expect any of the titles going behind a metered paywall to lose digital audiences. The iconic publisher, a unit of closely held Advance Publications Inc., lost $120 million in 2017, but aims to return to profitability by 2020. Condé Nast chief Bob Sauerberg has said the company expects to rely on advertising for only half of its revenue by the end of 2022, down from 70% last year. The company said in November that Mr. Sauerberg will step down from his position after a new global chief executive is named to oversee both Condé Nast and Condé Nast International. A search is under way. The Atlantic, Business Insider and New York Magazine-parent New York Media, are among the many publishers that have moved toward charging for digital subscriptions, following publishers like the The Wall Street Journal and the New York Times that put up paywalls. Other outlets, like BuzzFeed, have launched membership programs to collect donations. Not all publishers are convinced. Meredith Corp., which publishes such titles as People, Better Homes & Gardens, and the Magnolia Journal, doesn’t have any paywalls. “We have tested paywalls in a limited fashion with various titles in the past, however our non-paywall experience has consistently outperformed a paywall experience in those tests,” Andy Wilson, senior vice president of consumer revenue, Meredith National Media Group, said in a statement. He added that Meredith will continue to evaluate the use of paywalls. Hearst Magazines, a unit of Hearst, said it will launch a metered paywall for Runner’s World magazine in February but is still finalizing how much it will charge for a digital subscription and how many articles consumers will be able to read before hitting the paywall limit. A spokeswoman said this is the first Hearst title to go behind a metered paywall. The risk for publishers collectively is that consumers will hit a ceiling on the number of publications they can pay for, especially when more entertainment services—from streaming https://www.wsj.com/articles/conde-nast-to-put-all-titles-behind-paywalls-by-year-end-11548244800 2/4 1/30/2019 Condé Nast to Put All Titles Behind Paywalls by Year End - WSJ video to music—also now require subscriptions. The success or failure of Condé Nast’s push into subscriptions could hold lessons for other major magazine companies and publishers at large. Monica Ray, Condé Nast’s executive vice president of consumer marketing, said she expects subscription revenue to significantly increase over the next few years. She said the advantage of a metered paywall, in particular, is that it gives casual readers free access to a handful of articles that they in turn might post to social media, building a digital audience for the publisher. “In a sense, everything is free and nothing is free, depending on your consumption during a defined time period,” Ms. Ray said. Vanity Fair's Twitter page with the tweet about Caitlyn Jenner, when she was featured on the July 2015 cover of the magazine. PHOTO: MLADEN ANTONOVAGENCE FRANCEPRESSEGETTY IMAGES The New Yorker, which introduced a metered paywall in late 2014, generated about $115 million in paid-subscription revenue in 2018, up 69% from 2015, people familiar with the matter said. That revenue includes consumers who subscribed to the digital and print editions, although subscribers today no longer have the option of subscribing solely to the print magazine. The New Yorker’s regular renewal price for a print and digital bundle is moving to $149 a year from $119. The magazine will publish 47 issues this year. Wired, a tech magazine, followed with a metered paywall in February 2018, and Vanity Fair in April. Both titles have a regular renewal rate for print and digital of $30 a year, although both are rolling out a new rate of $49. Wired promises advertisers a paid audience of 900,000, while Vanity Fair promises a paid audience of 1.2 million. https://www.wsj.com/articles/conde-nast-to-put-all-titles-behind-paywalls-by-year-end-11548244800 3/4 1/30/2019 Condé Nast to Put All Titles Behind Paywalls by Year End - WSJ Ms. Ray said it wasn’t clear what form the new paywalls would take for each of its titles, which also include Self, Teen Vogue, the tech website Ars Technica and Them, which serves the LGBTQ community. Bon Appétit’s website has a lot of recipes. “We may take a different approach with recipes,” Ms. Ray said, by way of example. Matt Lindsay, president of the consulting firm Mather Economics LLC, said that approximately 91% of digital readers consume at most four articles each month from the same magazine, and that this group accounts for 55% of all digital article pages read. The cases of the New Yorker, Vanity Fair and Newsletter Sign­up Wired have shown metered paywalls can have varied effect on traffic. The New Yorker’s online audience last month was up 12% from December 2015, about a year after the paywall was first installed, according to measurement firm Comscore Inc. Wired and Vanity Fair, which both launched a paywall less than a year ago, saw their online audience grow by 12% and shrink by 3%, respectively, compared with the month before the launch. “The concern with a metered paywall is that you’ll lose advertising revenue,” said Mr. Lindsay. He noted, however, that paid subscribers may be worth more to advertisers because they are an engaged audience. Condé Nast is considering charging advertisers a premium for access to those subscribers, said Chris Mitchell, chief business officer for Condé Nast’s culture division, which includes the New Yorker, Wired and Vanity Fair. Write to Jeffrey A. Trachtenberg at jeff[email protected] Copyright © 2019 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non­commercial use only. To order presentation­ready copies for distribution to your colleagues, clients or customers visit https://www.djreprints.com. https://www.wsj.com/articles/conde-nast-to-put-all-titles-behind-paywalls-by-year-end-11548244800 4/4.
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