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Web & Print Design - New Media Communication - Marketing Victoria BC Canada

The recent announcements that the New York Times along with News Corp. publication Times UK will put their online content behind a pay wall comes as no surprise. Most newspapers and publications are bleeding money and are having difficulty reconciling advert revenue with print, distribution and content costs. The Times UK is reported to be losing £240 000 per day, and shedding online visitors while the NYT is gaining viewers but still not making money. But will putting all their content inside a ‘walled garden’ help or hinder? The answer seems obvious – it’s a losing proposition. It’s like watching your teenager sneak out for a tattoo – you know they will regret it later in life, but they have to learn through their own mistakes.

Pay Wall of Doom

Pay Wall of Doom

We are all part of a massive paradigm shift in communications; both witnesses to, and factors in, the ‘great experiment’. A decade ago Google began to redefine search – and to index all the information and content available within the World Wide Web; Facebook was a idea born out of a Harvard dorm 4 years ago, and the IPad is this years possible game changer for magazines and E-Books. Think about all that content, the streams content is provided, and the platforms for access – that is the key to understanding. Very little requires payment, most does not even require a user name and password, and for any specific topic, or news item, there will be a myriad of links, articles and web pages.

That is especially true when it comes to News. Print, radio and TV news all have web content – and compete with each other, and newer online only media sources (locally in BC Canada, like the Tyee). So what makes the Times UK or the New York Times special enough that the majority of their current online viewers will cough up a subscription fee? Very little. News is available from a wealth of sources that will continue to remain freely available – BBC, CNN, CBC, are highly unlikely to charge for content, and viewers seeking a daily dose of local, national and international news will simply avoid paying in favour of free. (and freely available – ie: no need to sign in). Media paywalls for basic news will simply drive viewers away, and deepen the revenue problem. Fewer visitors equals less advertising revenue, with subscriptions needing to be impossibly high to generate any profit.

If the argument is that users will pay for unique content, the NYT experiment in 2007 to charge for opinion articles proves the opposite. While Maureen Dowd, Gail Collins, Paul Krugman and many others are wonderful writers for the NYT, and often provide unique insight, they are only a small part of the paper, with most being news, as mentioned, freely available elsewhere. When the NYT placed their star columnists behind a paywall online readership dropped so far (nearly 75%) that is was the writers themselves who demanded a return to free content. Few were willing to pay for the NYT’s ‘unique’ content, they simply went elsewhere. Yet, once again in June, the NYT will place ALL online content under a subscription and the result will likely be the same – few long term pay users, a drop in advertising and a possible fatal plunge in revenue.

The same is true of the Times UK – what is unique, worth paying for from a newspaper where similar content is freely available from the Guardian, Independent, BBC…? Do Matthew Parris, India Knight, or Bronwen Maddox rate highly enough? No. In fact the real danger for the pay wall publications is not only revenue failure, but that the writers and Op-Ed contributors will jump ship with the readers. Writers need readers, as much as they need a salary. When readership drops, influence wains.

So what is the answer? Well, it’s not pay walls. The NYT and Times UK will prove, in short order, to every other publication this is not the route to follow. There may not be one single model that offers profit for quality content – rather a combination of streamlining, advertising, government assistance (as in France) and philanthropy.

If you have a spare 52 minutes, the brilliant Clay Shirky expounds on the ‘crisis’ in news gathering and provision, and prophecizes on a potential future.

http://www.youtube.com/watch#!v=tnW2Lv8aFGs

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5 Comments

  1. April 1, 2010 at 5:55 PM

    Heh – yeah Wright! 🙂

    There are a few notable exceptions where a media pay wall works, and you mentioned two.

    Where a local monopoly exists publishers can call the shots without fear of competition. Local content is also highly specialized. Few communities have competing media outlets who can afford a number of journalists to cover City Hall, local sports leagues etc.

    You mention the Economist and Wall Street Journal. The WSJ is behind a media paywall, and has stiff competition from the likes of Bloomberg. Reuters and business magazines. News Corp has yet to publish results but I would be surprised if the WSJ is actually sustainable under a subscription model.

    Highly specialized content, which by its very nature has a well defined but small audience, does well behind pay walls. Professional journals come to mind. They often have no competition, and appeal to wealthier clients who can afford to pay for content.

    The Times Colonist would never survive! It barely makes a profit as a free web service, and print subscriptions are falling.

  2. Ross-Reply
    April 1, 2010 at 5:24 PM

    Hmm, you may be Wright when it comes to big-city/international news and opinion that can be delivered by multiple sources, as is often the case with the NYT and TimesUK. But keeping free content off the web isn’t a bad strategy when you enjoy a relative monopoly (eg Economist, Wall Street Journal).

    Last weekend I was in Port Angeles. There’s only one real source of news in town: the Peninsula Daily News. The PDN keeps 90% of its content off its website. If you want to find out what’s going on there, you have to buy the paper. So most of the residents do.

    This won’t work everywhere, but I bet it would in many smaller markets. If I were the publisher of the Times Colonist, I’d put most of its content behind a paywall, and see what happens.

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