Why Pick Paywall When Other Options Abound?

According to an article in the Independent , Rupert Murdoch’s paywall at The Times has alienated advertisers, news sources, and even journalists that work there. These reported problems stem from a reported drop in traffic due to  the paywall, publicists worried that their client stories won’t be seen due to the paywall, and that journalists are suffering from “reduced reach of their voice online”.  Such concerns may hold water as evidenced by an exclusive story covered  by The Times, that could not be found in a Google search, which instead showed follow up stories from rivals ITN and The Guardian.

The choice to run the paywall runs contrary to the failures of the Newsday paywall that netted only 35 paid subscribers after three months and The New York Times‘ TimesSelect which was so unsuccessful that it was shut down, leading journalism pundit Jeff Jarvis to pen an obituary analysis of it here. The Huffington Post also declared “Court of the Web Rules Against Times-Select” in a well written goodbye to that paywall. In a recent post by Mike Koehler, The New York Times‘ decision to go digital was analyzed here.

Other analysts have volunteered their own calculations showing that the paywall at The Times could be profitable. If so, it would be in the face of  drastically reduced  traffic, down as much as 90 percent according to  estimates by The Guardian, here. The risk with speculating on profitability is that The Guardian has data and there are other proven cases where adding a paywall has lead to similar drastic traffic losses and lower returns. Any executive who bets on a paywall may be putting his/her job on the line while directly welcoming conflict with current evidence.

If not a paywall, then what are the options? One thing to consider is the Social News Organizations covered here on ReveNews by CT Moore. It’s a road map that new media journalism should seriously consider. There is one caveat affecting paywall options and some registration oriented access mechanisms, however, where the ‘news should be free crowd’ is growing and publishing articles on how to bypass those systems. One such example, where the commentators list workaround methods is here.

Other choices are discussed in a recent round-up provided by former Editor & Publisher author, Steve Outing. Outing implements and discusses alternate business models that support journalism such as donation systems from Kachingle and Flattr, and a sponsor funded thank you button called ThankThis in a discussion here. While Outing doesn’t predict the winners, he does express disappointment in the general unwillingness to pay exhibited by consumers.

For  a better grasp on the issue, I posted a request for news sources on a news source list that reaches over 100,000 publicists and readers, asking for user stories or publishers who could bring me user success stories about paywalls or the alternate business models. The result? Only two serious responses, and one was from a crowd funding company that didn’t quite match my reporting requirements. The one remaining source had no complaints with her solution, but she had tried several, and none was a “take it to the bank” success. The respondent receives over 100,000 page views a month and has shy of 30 supporters on Kachingle.  Her view is that readers “don’t really understand the economic situation of the web”.

The site, mama-is.com, was one where I thought the number of paying contributors would be higher. It’s unique content, not easily syndicated news (or available at hundreds of different sites), her audience is self-selecting due to its message, and the content is pretty good (of course that’s subjective). The site owner, Heather Cushman-Dowdee, is happy enough with Kachingle, as her content remains free and accessible, and believes that with time, education, and distribution, more and more readers will step up.

Paywalls and paid news/article content continues to be a  revenue challenge that needs to balance willingness to pay with content distribution and availability. New approaches should be taken where readers need to be educated that the content they love or enjoy has to be paid for somehow. Whether it’s any of the alternate business models or increased advertising from Social News Organization approaches, it’s important to innovate, move forward, and try new approaches that respect the user and don’t destroy traffic to media sites.

Disclosure: As a former micropayment executive and follower of paid content, I have had business dealings or active press relations with The Guardian, New York Times, Kachingle, and ThankThis, and I stated that I believed Flattr could work if people would open their wallets.

About Duane Kuroda

Business ninja, deal hunter, Internet marketer, and technology fiddler obsessed about growing companies and launching products. Currently at Peerspin, Duane’s past lives include Vice President of Marketing roles at companies leading micropayments, Internet video, and online communities as well as research and consulting for mobile advertising. Duane has spoken at conferences including Digital Hollywood and Digital Video Expo on topics covering monetizing online content and online video, has appeared on TechNowTV and KNTV, and has been quoted in various magazines. Follow Duane on Twitter: @dkuroda.

One Response to Why Pick Paywall When Other Options Abound?

  1. [...] Why Pick Paywall When Other Options Abound? (revenews.com) [...]

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