Once more into the pay-wall breach: No gravedancing edition

Rick Edmonds at Poynter offers a summary of a white paper that the American Press Institute provided to attendees of the recent newspaper execs’ conclave. (The paper doesn’t seem to be available on the API site. UPDATE: Nieman JLab has it.)

The overall thrust seems to be: time to make the customer pay up. Newspapers must “establish that news content online has value by charging for it.” If this is really the level of the paper’s economic reasoning, the industry is in even worse trouble than I thought. News flash: Pricing a product does not establish its value. What you have to do is find a price that people will pay.

Similarly, the report urges a new “Consumer Centric” strategy, which sounds dandy, until you realize that “Refocus on consumers and users” does not mean “serve the customer better” but rather “refocus” on their wallets instead of those of advertisers.

Reading this made me sigh. In the contours of this latest iteration of the argument over charging for content, I’ve recognized an unfortunate pattern. Those who advocate the “charge ’em” strategy cast themselves as hardheaded pragmatists and their opponents as wild-eyed Web idealists and anarchists.

Sadly, however, I submit that most of us in the “charging for content is a bad bet for newspapers” camp are coming at this from the perspective of bitter experience. We are grizzled veterans of this argument. We have Been There and Done That. We aren’t grave-dancing; we’re saying, “Maybe you don’t want to fall into that grave that almost swallowed us.”

During my time at Salon we tried every online revenue strategy you can imagine: Gate off some of the content. Gate off all of the content. Don’t gate any content but ask users for cash to join a premium program. Slate tried a subscription program well before us. Many others followed. Yes, there are differences between such sites and local newspapers. Yes, 2009 is different from 2000-2002. But the fundamental lesson remains: you can get some revenue from readers, and there’s nothing wrong with trying; but if in doing so you cut yourself off from the rest of the Web in any way, you are dooming yourself to irrelevance and financial decline. Don’t make your content less valuable at the instant you’re telling people it’s going to cost them more to get it.

The strongest confirmation of this fact (as I pointed out in an earlier post that was recently echoed by Silicon Alley Insider, and it’s nothing new either) comes from that poster-child for pay-wall advocates, the Wall Street Journal. The Journal has the longest-running and arguably most successful subscription program around, but it has smashed a giant hole in its pay wall and allowed anyone arriving from Google to read any article on its site. (That’s right: you don’t need a WSJ subscription. Just plug any WSJ headline into Google and walk on through the wall.)

The Journal execs can say, “Hey, we’re just being flexible, it’s a hybrid strategy,” and they’re correct, in a sense. What their strategy fails to take into account is how much traffic and mindshare they have lost from the perception that their articles aren’t a linkable part of the Web.

The Journal’s subscription model isn’t a crime or a disaster. It just isn’t the future. As the company’s own discovery that it needs to let Googlers in for free shows, this model is classic newspaper-industry short-term thinking. It’s backward-looking, and won’t help newspapers figure out where they need to be tomorrow.

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  1. And cutting yourself off lasts longer than the actual cutting.

    Sat next to a nice fellow baseball fan at a Giants game the other night. It came up that I work for Salon. Really like Salon, he said, but I never go there anymore because you guys charge.

    How long has that not been true? Eight years or something?

  2. Scott Rosenberg

    That is an important point. Not only is charging for most content a bad idea, it’s a bad idea that’s very very hard to back out of.

  3. Aaargh. I’d like to say King was drinking or something — and that’s true — but I hear this at least half the time from people outside the world of Salon insiders. It also set us back with the blogosphere and Google, because of all the years bloggers wouldn’t link because of the wall. Anyway, you guys know all this, but just to say: Gaaak, these people are un-smart.

  4. Carlos

    Wow, I feel like I’ve stumbled into an editorial meeting at Salon.

    Anyway, just like tech CEOs need to be reminded that they’re not Steve Jobs and therefore don’t have his Reality Distortion Field, newspapers need to remember they’re not the WSJ. The WSJ paywall worked for as long as it did because the WSJ fills a very specific niche in the newspaper ecosystem of being Wall Street’s paper of record. If you’re not in an equally privileged position, and are trafficking in the same news everyone else is, it’s not going to work for you. Given the fact that even the WSJ has breached their wall should immediately doom the paywall idea forever. It won’t, but it should.

  5. Great post. I felt about 98% sure that the idea that it was way too late to make a go of paid content for journalism, but harbored a little hope that it might succeed if Congress would grant the newspapers a cartel.

    You’ve convinced me, though, that it would be the worst form of corporate welfare.

    The immediate future of journalism scares me, but you’re right on a central point: that newspapers continuing on the web will allow them and their staffs to be a part of the evolving solution.

    That in itself is big.

  6. AxelDC

    I used to read Salon.com on a regular basis. I would even look at their silly ads to get a “one-day pass”. However, I discovered other free content on the web, and steadily stopped reading Salon.com. It just wasn’t convenient or interesting enough anymore.

    That was about 7 years ago. I rarely go to Salon unless someone links to it. Part of the reason people read a site is because they are familiar with it and know they will regularly find interesting content. Once that link is broken, the readers may never come back and you have truncated your relevance for small and temporary financial gain.

  7. Rusty

    Tragedy of the Commons: by making so much free content available, newspapers have imperiled themselves. If any single paper tries to go pay, they only hurt themselves.

  8. It’s sort of inexcusable at this point that there isn’t a standard, unified reader registration system available across major newsites. The main reason I don’t register even for free for sites is because I’m sick and tired of having to do it 200 times over, each time I come across a new site or article. A major player like google should be offering this sort of service and pushing it HARD.

    Because once something like that is in place, folding in a micropayments system is child’s play. You could even start off with a purely donation based system. If a reader visited a lot, you could maybe make a harder push (“you really seem to like us, won’t you help us produce more great content?”). Yeah, maybe you’re skeptical that a “like this article, click here to pay 5cents to help us produce more” button could generate revenue. But it’s better than nothing for a start, and no one has really tried to make it EASY to pay money, which is far more the holdup than the actual cost to the reader. And it works for things like public radio.

    If my browser had a built in counter of how much I’d spent/donated that day/week/month, I’d have little problem paying out tiny sums for good reads. The holdup is that my browser doesn’t have that, and instead newspapers are still banging their heads against the wall trying to figure out how to get me to shell out subscriptions that cover ONLY their website, instead of what I really want and would be willing to pay to subscribe to: the entire web.

  9. Thomas

    “t’s sort of inexcusable at this point that there isn’t a standard, unified reader registration system available across major newsites.”

    There easily could be: OpenID, which many many large and small sites are using to share authentication. Although I’m not sure that easing registration is really a very big problem in the scheme of things here. Asking the browser manufacturers to incorporate micropayment technology also dooms you to the long upgrade cycle of that software (we’re still serving a very large population of IE6 users where I work; many customers seem to take several years to upgrade a browser).

    Micropayments are never going to be “child’s play”, if they were, we’d have seen them crop up somewhere by now (for example, across Yahoo properties or WordPress blogs some other large federated network). It’s a surprisingly tough problem from both a tax/legal and technical point of view. It’s also socially hard: people actually really DO have a problem paying out tiny amounts in nickels and dimes. The iTunes $0.99 per song/app model seems to be about the right threshold for a small unit of digital value.

    I do think Drew’s last point holds the seed of something very interesting (which Xark’s explored at length): one solution might be to bundle “subscribables” in some way. NYT.com + ESPN.com + 2 Pay Per View events per month. Or an LATimes.com subscription + a Netflix subscription. You could imagine a cross-media sports subscription that blended online access with, say, tickets to my city’s soccer team’s games.


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