Paywalls are not the Enemy
Mar 31st, 2010:Internet Related
The Paywall debate is raging again, and everyone and his monkey has an opinion. Mine is that taking down the paywalls in the first place was a silly idea, and you can’t say they don’t work because there are successful paywalls in operation – but you need reputable and quality content that isn’t freely available elsewhere.
Then again, if you don’t have that, you’re playing a losing game anyway. Quality news content needs to be paid for, but you may need to get inventive with how you charge and what precisely you charge for – particularly if you’re a smaller player. So far very few have figured out exactly how to get creative with this area, but in the meantime I welcome the big players putting back up the paywalls, it will begin the reversal of the notion that because we’ve been getting it free we should continue to get it for free.
I want the people researching my news to be getting paid for it, in the hopes that they can take the time to do more than regurgitate press releases.
- Taking down the Paywalls was a bad idea
- Content must be Paid for
- There are successful paywalls in operation
- How will we pay for our news?
- What will we pay for?
- I welcome the return of the Paywall
Taking down the Paywalls was a bad idea
It was not a good idea to take down the Paywalls way back when. Even when you take into consideration that at the time advertising appeared to be the way to make money online, it made little sense to be building up a brand around an online destination for news and then making your money by diverting your readers to other online locations.
Advertising in a print publication makes sense as you read an article, then cast your eye over an ad before turning the page to the next article. Converting ads into cash online necessitates your driving your traffic elsewhere.
When the New York Times removed it’s paywall it was not because subscriptions were failing to meet expectations:
The Times said the project had met expectations, drawing 227,000 paying subscribers — out of 787,000 over all — and generating about $10 million a year in revenue. “But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site, NYTimes.com.
Content must be Paid for
In the words of David Simon
Yes, I’ve heard the postmodern rallying cry that information wants to be free. But information isn’t. It costs money to send reporters to London, to Fallujah, to Capitol Hill, and to send photographers with them, to keep them there day after day. It costs money to hire the best investigators and writers and then back them up with the best editors. And how anyone can believe that the industry can fund this kind of expense by giving its product away online to aggregators and bloggers is a source of endless fascination to me. A freshman marketing major in any community college can tell you that if you don’t have a product for which you can charge people, you don’t actually have a product.
There are successful paywalls in operation
The Wall Street Journal and the Financial Times both operate paywalls successfully. I couldn’t find recent figures but WSJ is said to have growing subscription numbers and in 2007 was said to be on target to generate roughly $65 million in subscription revenue in 2007.
The Financial Times expects 2010 to be a great year for their paywall:
The FT Group’s chief exec John Ridding is responsible for the news, unequivocally stating “we reckon [2010] will be the first year that revenues from content overtake revenues from print advertising.”
How will we pay for our news?
How exactly (including how much), and what exactly, we will pay for is the million dollar question. The Financial Times has a clever tiered system ranging from the unregistered to the free registration up to a premium account, and includes a system where free registered users can browse some content types a certain amount per month.
For now, publications are reliant on their own subscription systems, but centralised micropayment systems would make paying for content so much less of a barrier. Yes, micropayments are a whole other debate, but really, somebody needs to crack this and soon.
Why the hell PayPal, for example, don’t have a micropayment system in place is beyond me. The ideal would be to pay a very small fee to read an article. If that system allowed me to pay to read articles on all of my favourite publications without huge hassle to me it would be even better.
If you consider the growing trend on many sites to use FaceBook connect to allow people to comment and share content, then Dave McClure might be dead on when he says “Facebook, Google, & Apple will own your wallet by 2015”
It doesn’t seem a great leap to see a future where you can share items on FaceBook, but in order to read the full article you need to pay a 1c/5c/10c/50c/€1 fee. Because you’re logged into FaceBook already you just have to confirm the payment and you’re done. Read away.
What will we pay for?
In November 2009 Forrester, a consultancy, found that 80% of Americans would abandon news websites if they charged.
There are a host of studies like this available, but that’s because the perception right now is that news content should be free. We need a change in that perception. It’s not going to be easy initially, but I don’t think it will be as difficult as some people think. There may be an initial drop off in the numbers who access news content if it’s charged for, but for unique quality content at the right price people will pay and the readers of value will return.
Unique quality content. That could be an issue for some (read many) news outlets. That’s a whole other debate too.
So a one size fits all paywall system may not work for everyone, it’s true. Organisations will need to figure out where their real value lies and how to charge for it. This may require some fairly creative thinking, but in the meantime…
I welcome the return of the Paywall
It will begin the reversal of the notion that content is free, the big players can lead the way and the smaller organisations will be under less pressure to be free. For smaller, and local news publications the pressure is on to get creative and figure out where their real value lies.
Get the paywalls back up, hope to god someone cracks the issue of hassle free micropayments, and start working out creative tiered payment systems.
Paywalls are not the enemy, quality content has to be paid for, and if we wake up tomorrow to find we are paying but not receiving quality… well that’s a whole other rant.
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