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Why I’m changing my tune on paywalls

A Pew report says paywalls could yield content that justifies a price tag.

The Pew Research Center is out with its annual “State of the News Media” report. Much of it is what you’d expect: newspapers and local television are struggling, mobile is rising, digital revenue hasn’t — and can’t — replace traditional print revenue, and on and on.

But read carefully, and you’ll find hope.

For example, Pew says the embrace of paywalls might improve the quality of the content:

“The rise of digital paid content could also have a positive impact on the quality of journalism as news organizations strive to produce unique and high-quality content that the public believes is worth paying for.”

I used to criticize paywalls. I thought they could only work for specialized content or material that’s attached to a desired outcome (i.e. subscribe to the Wall Street Journal, use the insights to make money).

My concern was that publishers would slam walls around their existing content and ask people to pay for an experience that had once been free. That made no sense. Who wants to pay for slideshows and link bait and general news?

But content that’s “worth paying for” is a different thing altogether. Publishers who go this route are acknowledging that a price tag requires justification.

Will it work? Maybe. What I might pay is different than what you might pay. There’s that pesky return-on-investment thing to consider as well.

However, my bigger takeaway — and this is why I’m changing my tune on paywalls — is that value is now part of the paywall equation. That’s a good start.

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  • http://eddology.com/ Edd Dumbill

    My basic uncut reaction is: I’d rather watch HBO programming than the endless dross on network TV that must support advertisers. Makes senses that this translates. Smaller audience, but a model that gives you greater scope for quality and subject.

    • http://radar.oreilly.com/ Mac Slocum

      Re: smaller audiences — Scale prevented a lot of traditional organizations from addressing the value issue. Even a few years ago much of the talk was about moving a giant organization built in a print era over to the digital world. But that doesn’t work. We know that. Yet, the conversation persisted and that’s why previous talk of paywalls failed to explore the value of the content locked behind those paywalls.

      Now, organizations have cut and cut to the point where they’re *almost* at a scale that works on the digital side. So, we can finally have a conversation about how a paywall might be effective (i.e. value).

      We’ll know we’ve arrived at the full transition when we stop seeing mention of digital revenues not equalling past revenues. I’m looking forward to that.

      • Jim

        I think there’s another element to this. I’m more likely to read the things I’m subscribed to. I signed up for readmatter.com a few months ago and have since read everything they’ve published. It’s only 99 cents per month but it’s enough to make me not want to waste my purchase price and miss reading it.

  • http://www.facebook.com/bsmcconnell Brian McConnell

    I remember when O’Reilly used to pay guest authors for web articles. Not a lot, but enough to make the hours required to write and edit a decent piece worth the effort. Then they embraced the “volunteer economy”. It takes time to write a well written and researched piece. My time is worth money. So when publishers stopped paying, I stopped writing. It’s a shame. I enjoy writing, but can only afford to work “pro bono” when I am finished paying the bills. Pretty sure I am not the only person who feels this way.

    The problem with paywalls is they are a nuisance. I don’t want to sign up for an account on every site I read. If there was a paywall that worked sort of like the coin boxes for newspapers, that would be great. Want to read this article? Click here to pay ten cents (debited from your account). You’d use the same paywall everywhere. Make the payment low enough, and make paying easy enough, and lots of people will participate.

    • Robert Lucente

      The model of “paywall that worked sort of like the coin boxes” doesn’t in general seem to work. Consumer has to decided each and every time whether content x is worth y dollars. That is an awful burden. On top of that, the consumer would have to keep track of each and every transaction. There is a place for aggregators like newspapers.

      • http://www.facebook.com/bsmcconnell Brian McConnell

        Actually what I have in mind is more of a pass than anything. So if you hit the NYTimes, you drop a coin for a day pass. The thing I don’t want to do is maintain separate accounts on every site, but have something like Paypal that makes it super easy to pay small amounts like this.

        • terracerulean

          I agree – micro payment platforms are a solved problem. Though we do need to acknowledge they are a network-effect business model and will tend to monopoly over time, which tends to express itself in opportunistic price gouging. But if publishers could get their heads out of their ‘fundaments’ they might realise there is an opportunity to set up a consortium based run-at-cost only micro-payment platform.

          • fjcmclgm

            They’re a solved problem for the software developer, but not for society. People don’t want to spend the time to think. Even a daily pass for a newspaper requires thoughts. That’s why a yearly subscription is what’s taken over the magazine business. We’ve done the experiment already and the only thing that’s different is that the delivery prices are different.

    • nb8

      Excellent idea. I’m not sure what the average pageview is worth in terms of ad revenue, but I think most people would be happy to pay a dime or a quarter for a good newspaper article, or a buck for a high quality feature length article. (A business model that seems to have worked out well for iTunes)

      On a related note, it would be awesome if PBS/public radio supporters could be given rights to digitally skip over any and all pledge-a-thons!

  • http://twitter.com/lmholliday Linda Holliday

    “Paywall” is about as attractive a concept as “Pay-per-View” which was dead in the water FOR 10 YEARS until it was re-christened “On-Demand.” Those who do not study history…
    How about PREMIUM content, which promises something superior instead of something punitive? Premium content is a segment, a class, a privilege. A paywall is a tactic, and not maybe the most effective one.

  • terracerulean

    I have actually subscribed to deliberately support some new media initiatives that are looking to improve analysis and reporting and temper the mass-market drivers of pure advertising supported media.

    On the other hand I am wary of subscribing to content generally because it is effectively buying a pig in a poke. I have no real way to ascertain whether something is worth the money I am being charged until after I read, watch or listen to it.

    Information is not like clothes – you can’t try it on. When it was in print I could have a real good flick through at the news outlet before deciding if I wanted to buy an issue. Subscription was a decision one made for a few well regarded publications that one had come to trust over a number of casual single-issue purchased. The paywalls generally make it an all or nothing proposition – and some who support single article payment are thoroughly gouging their customers. We know they aren’t printing and shipping any more. But we are being charged as if they were.

    What I would like to see is a wallet-like micro payment approach – preferably on an open multi-vendor platform that lets me automatically pay (cents not dollars) for content when I click a button.

    But that would only work if the content was designed so I could sample a reasonable proportion of it first – not the one or two paragraph abstracts and summaries that some publishers are offering. (I am looking at you Scientific American).

  • fjcmclgm

    Thank goodness an O’Reilly author came around to reality. The publishing arm of the company puts a paywall around its books and the conference arm charges a fortune at their paywall. Why can’t others use the same techniques?

    The reason that free content sucks and is getting suckier because the ad revenue is so minuscule and the model encourages slide shows and other dreck. There’s NO reward for quality because a page view is a page view is a page view. It doesn’t matter if the article is brilliant or stupid. The author gets paid the same amount.

  • Adam DeRidder

    What we need are micropayments for great content. NYT sends email with summary of each article. There are about 2-3 a day that I’d pay 25cents to read, but I don’t want to get locked into a recurring payment. I’d probably end up paying more if I went pay-per-read, but I’d realize the value for each article.

  • AugustineThomas

    I”LL NEVER PAY EVER AGAIN! THERE’S ALWAYS A FREE SOURCE!