At first, the notion of a paywall seemed silly. Better to take it down and get the traffic.
But when the traffic didn't turn into profit readily, the notion took on new seriousness. For some time now, publishers have been weighing the benefits of reconstructing a paywall to bring revenue.
In his latest post, veteran media and tech executive Alan Mutter notes the arrival
of new, well-heeled local players in the game (Yahoo, AOL, Huffington Post), all willing to give away content others contemplate placing in behind the paywall.
Mutter's conclusion: "For anyone other than publishers of mission-critical business or government news like the Wall Street Journal and possibly the New York Times, pay walls will not fly. It is time for everyone else to move on to more productive pursuits."
Those pursuits? Unique products for print, online and mobile, valued by customers and advertisers alike. Charging for day-to-day coverage is not likely "fruitful," he argues on his Reflections of a Newsosaur blog.
In the slow-news days of summer, even media transformation grinds to a near-halt. What is clear, though, is that major players and preparing for major plays in the months ahead, among them The New York Times as it (re)starts charging for content online.
It won't be a full paywall but a metered system and the Times is surveying its customers on an array of options.(survey below from Scribd). What it's looking for is the elasticity of demand and the price point when there is just the right mix of customers and revenue.
The Times is particularly examining whether existing print subscribers would pay additional fees for digital content, but it's also on record as saying its approach will be to permit a certain number of stories free each month to all before demanding fees. Some of the options include a day pass, an online subscription and an all-devices fee.
It'll be several months before the project is rolled out, but as might be expected, the industry is looking most keenly at its efforts.
Media writer and TV host Peter Funt argues in the Wall Street Journal
(media with a paywall) that history has shown people will pay for their media, even when it seems the odds are stacked against the concept. Just as television and radio have proven the case, so can newspapers.
Sure, he says, there are obstacles: A raft of free content abounds online, for instance, and there are aggregators galore scraping the Internet to make it difficult to sell your style of curation. Funt
says the industry has to end the debate and just get on with it.
"But the central question on which industry observers seem to dwell—will consumers pay?—has already been answered many times in media history. Yes," he writes.
The lead item in this edition of the Columbia Journalism Review
examines the opportunities mobile and e-reading provide the business of journalism. Essentially author Curtis Brainard argues that, done right, mobile gives journalism a second chance to find a business model.
But there are big if's in the journey: The content needs to be different to reclaim the added-value nature of what used to be, the advertising needs to find an easy way to campaign across various platforms, the industry needs to create partnerships to stay ahead of the technology curve, and there is that most tricky question of whether consumers will shell out for subscriptions and services in an era of abundance.
Still: "The circulation levels and ad dollars of yesterday may be gone for good, but there are real opportunities to reclaim control of journalism’s financial future. Second chances are rare, and if we miss this opportunity to capitalize on digital content, we may not get a third."
Last fall Google floated the notion
of Newspass, a publishing system that would enable e-commerce and also permit content to be searchable even when inside a paywall. It brought the idea to a gathering of publishers at a Newspaper Association of America meeting.
Now details are starting to emerge on the proposal, which appears headed to market by the end of the year.
The Italian newspaper, La Republicca, delved into the idea today
. Google so far is simply saying it doesn't comment on prospective products, but its comments to paidContent.UK
didn't dampen the report's contents, either.
Essentially Newspass will permit publishers to create a payment system, either through micropayments or direct credit-card purchases, through its Checkout system.
Google's CEO Eric Schmidt has repeatedly expressed concern about the news business' economic model in the digital sphere. While Google drives traffic to sites, and also benefits from search of those sites with its adjacent advertising, it sees a higher purpose in technological support of the news business --- the content is essential to Google's well-being.
It is common practice for newsrooms to use search engines to circumvent porous online paywalls. It is also common to learn this in journalism and other schools as a research technique.
Mark Potts, in his Recovering Journalist blog
, says he's dropped the online subscription to the Wall Street Journal, the financially successful WSJ.com. But he doesn't feel he's missing much of anything.
For one, the site itself continues to carry quite a lot of material, including many of the features Potts values. Then, there's the question of finding the rest, and while Potts doesn't divulge his technique, he leads you far enough to infer the rest of the journey.
What he's mainly saying is that technology isn't making the concealment of content anything but difficult. Access to much of it is relatively simple.
Media economist Robert Picard explains in his latest post
the difficulty in setting new terms of access to news content. He outlines the challenge of operating as a multi-sided media --- that is, media with several relationships that help set value.
Newspapers used to be two-sided media: sold to readers and to advertisers. The more readers one had, the more it could reap in advertising revenue. The more advertising revenue, the more resources to attract readers.
Now newspapers have turned into multi-sided media: to readers and advertisers traditionally in print, to online readers free, to online advertisers and to advertisers using both.
"If one alters the free price online to create a paying audience, it not only affects the willingness of online advertisers to pay, but affects the willingness of joint audiences and advertisers to pay and thus effects performance of the print sales as well," Picard writes.
As a result, he says it's not easy to monetize newspapers. Those who choose to do so need to weigh carefully the effect on the other sides of the piece.
In his weekly Monday Note, French media veteran Frederic Filloux paints a bleak picture
for the future of digital news.
He focuses on what he calls four facts: advertising will not suffice for some time, people are flocking to social media over news media, money will shift to mobile and lean-back devices like the iPad, and a small group of gatekeepers will control the platforms and operating systems guiding them.
He concludes that this shift will accelerate the creation of paywalls, that many media firms will try to capitalize through access to all their platforms for a fee, that small firms may flourish but that the free. flourishing Internet will wither. He also believes regulators will have their hands full trying to deal with content and economic issues.
John Yemma, the editor of the Christian Science Monitor, has spent the last year learning lessons about what the customer wants. He has been overseeing the newspaper's transition to a digital format and understanding the relationship between the technology and the user all over again.He has concluded
that the technology isn't the particular value in the equation. Rather, it's in using technology to develop a new relevance in the presentation of content.
"There is no future in a paywall. No salvation in digital razzle dazzle," he writes.
Instead, he sees a "bold future in relevant content."
As he sees it: "The multimedia debate needs a new question: How are we using technology to create a more relevant product? We’re not going to “save” media by out-featuring each other. We can and will re-cement media by using the technology to deliver the experience consumers want most: intelligent, meaningful news that’s accessible where they are in the moment."
Rupert Murdoch, the world's largest press baron, said some time ago that his operations could no longer continue to provide information freely online.
For years his Wall Street Journal has charged an online subscription fee (to be fair, he bought WSJ after it had been charging for several years). But he served notice that his major newspapers would soon be doing so.
Today his Sunday Times of London formally announced
what had been rumoured for months: a separate, redesigned site available only to subscribers for two pounds a week.
In writing about the move, the Times (which will create another paywalled site for its Monday-Saturday papers) argues that good journalism requires good financial backing. Giving the content away will not generate sufficient advertising support to pay for the kind of work that the Times believes is necessary to do its job.
"We believe many readers will be prepared to pay this relatively small amount because they value our journalism and they understand that nothing of value is free," it writes today.
It also believes others will follow and that the only free purveyors will be of inferior quality or public models like the BBC --- even they are starting to understand the impact of Internet investment and scaling back their foray into publishing, the Times suggests.
It is, as the newspaper notes, a significant gamble in a revolutionary age. It comes as a range of new e-readers are hitting the market (Apple's iPad at the end of the week) and publishers are setting their prices for subscription-based models in those formats.
WSJ, for instance, will be roughly 18 dollars through iPad, almost double its cost of delivery to the door, so presumably the online version comes with additional functions.
The Times believes its loyal customers will understand why it needs to do this. Study after study has indicated a small but loyal cohort exists t who would pay for access to the content.
But there are many serious questions lingering around paywalls, among them:
1. Are organizations capable of producing content sufficiently original to capture direct subscription financing?
2. Are paywalls technologically enforceable in an age of robust search engines and an aggressive culture of cut-and-paste bloggers of content?
3. Are there "good enough" freely available alternatives to the paywalled journalism?
4. Are paywalls actually going to hinder the development of a sustainable business model online by suppressing audience size and opportunities to attract new users?
5. Are organizations too late in reversing a decade-plus-old culture of free (once you've paid for your computer and Internet connection) access to content?
Not surprisingly, the Times is inundated with negative comments on its site about the initiative.
The New York Times will be the next major organization to try a metered system of access next year. But it would be surprising if many other major organizations, frustrated at the slow-developing digital business model for content, don't watch what happens very carefully in the weeks ahead and try to mirror any success that might develop.