Bricking up the doorway: why newspapers should think again on pay walls

The New York Times is deliberating over online business models. Patricio Robles at Econsultancy refers back to a Gawker post which suggests that the Times (NYT) is looking at two possible online subscription models (Silver at $50/year and Gold at $150/year) in order to address the growing need for a new revenue model for newspaper websites.

Long story short, the NYT is toying with the idea of putting up a pay wall, reversing a decision in 2007 to make all post-1980 content free. While the newspaper industry is frantically hunting for a revenue stream, the question which needs to be asked is this: are people really going to pay for news in the 21st Century?

David Simon thinks so. In a post for Columbia Journalism Review, the former journalist and creator of The Wire issues a challenge to the NYT and the Washington Post to lead the newspaper industry out of its current slump by erecting pay walls:

“Content matters. And you must find a way, in the brave new world of digitization, to make people pay for that content. If you do this, you still have a product and there is still an industry, a calling, and a career known as professional journalism. If you do not find a way to make people pay for your product, then you are – if you choose to remain in this line of work – delusional.”

Simon believes not only in pay walls, but that “no half measures” should be evident: the Times and Post should join forces (any extension of this idea could raise questions on antitrust issues) restrict access to their sites to subscribers only.

It’s a simplistic idea, and one which relies upon the assumptions that people are willing to pay for news and won’t be able to get that news elsewhere, either for free or, for example, on premium news television channels for which they already pay (because that’s a business model we’re more used to, I suppose). Dave Winer, “the father of blogging and a pioneer of RSS feeds” thinks that Simon’s proposal is the opposite of what newspaper websites must do:

“With all due respect, putting up a “pay wall” is exactly what these organizations don’t need. They need to decentralize, get further out into the world, not hole-up behind a wall and try to tough it out.”

Winer knows as well as anybody that the landscape is changing and newspapers need to adapt to their new environment (that’s RSS feeds, communities and so on), not hide from it. As he points out, this doesn’t mean citizen journalism. It also doesn’t mean reverting to a now-traditional online advertising model. It sounds viable, but if it worked then the newspaper industry wouldn’t be half as tense as it is today. In his notes on a lunch with Huffington Post CEO Eric Hippeau, Richard Edelman reports that HuffPo has no plans to start charging for content.

While HuffPo runs on an advertising model, it is in a unusually fortunate position to be able to do so. Someone will have to come up with an alternative business model in order for traditional newspapers to succeed online in the long term.

Steve Buttry considers an interesting question, posed to him by John Newby, the man behind DeliveringQC:

“While I am on the fence, I have to ask – what have they to lose by building a paywall. If they continue as they are, they lose. At the end of the day, it is that news that is all they have to separate themselves from others. I’m not sure that paywall will accomplish anything, I’m also not sure it will hurt them as they get little revenue from that venture anyway. The only way you win is to try many options, failing at some and learn and grow.”

The emphasis above is mine. Newby is right to point out that the industry is struggling, and so logically asks what the newspapers have to lose? I think they run the risk of losing their readers, their revenue and their battle for survival. Buttry explains that the pay wall idea has been proven inadequate in the past, and revisiting it is akin to a golfer stubbornly attempting a difficult shot over and over when it was unnecessary in the first place.

I think the risk is higher than Newby suggests – there is ground to be lost. While I don’t think for a second that citizen journalism or blogging have the capacity to destroy journalism and mainstream media, there will be sites capable of providing perfectly adequate free news (with certain exceptions, such as lightning-quick market data, for example). OptimizeGuru argues that by building pay walls the newspapers would simply drive their readers elsewhere:

“I get CNN, MSNBC, and Fox News. I get the business channels and sports channels. Why should I shell out even more for papers….to get the same news? Even if it wasn’t an antitrust violation, there’s no way that news bloggers and the new brand of citizen journalists (who publish online) are going to abandon their business models, which is based on advertising. That means people will still be able to get their news for free.”

Another threat is posed by aggregation sites. Stewart Mader reports that PSFK, a site which enriches its own news using excerpts and comments from mainstream media sites, plans to adapt to a new pay wall era by signing up to the newspaper sites and continuing to aggregate news to its readers for free. Given the choice of the NYT or PSFK for the same story – notwithstanding slight differences in content – I know which I’d prefer.

Not only could the sites begin to haemorrhage readers but, according to Salon co-founder Scott Rosenberg, (via Stewart Mader), the content itself becomes devalued when hidden behind a wall:

“When you put up a pay wall around a website you are asking people to pay more for access to material that you are simultaneously devaluing by cordoning it off from the rest of the Web. So others can’t link directly to it, and the article is unlikely to serve as the starting point for a wider conversation beyond the now-narrowed pool of subscribers.”

So, instead of bricking themselves into a darkened room, maybe newspapers should consider better using their content outside. Next idea, please…

(Pic from ddk4runner/Flickr)