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Much has been said about newspapers looking more fondly at the possibility adding a paywall to their precious content so 'bloggers stop stealing it' and Google 'stops being a vampire'.

Almost all of the arguments centre around what the business side of this decision is. While that is important, the reaction of the public matters much more.

This list has little to do with the economics of the situation. Rather, I'm employing a method I made up on Twitter a few days ago when discussing with friends why Jon Stewart is seen as 'America's most trusted newsman'.

I call it the 'Jon-Stewart-is-America's-most-trusted-newsman-because-he-calls-people-on-their-bullshit' method.

It boils down to Jon Stewart's appearance as someone who speaks for the people who watch his program, not the important people he interviews and his peers. I'm going to try to look at this from the perspective of the consumer who would end up paying for access to the content.

Alright, here goes ...

5. Bottom line: Paywalls mean people have to pay, and most will not

The economic theory is that in a system like this, the subscribers subsidise the free users. The only problem with that is it has been tried and it failed. The New York Times used Times Select and shut it down in 2007 because the $10m a year in revenue it was generating just was not enough. 

4. Charging for something that was free is a losing idea

This only works when you've offering a free trial, often used by software companies. That's not the case with news. Niche and business titles aside, everything has been free for many, many years. Would you pay for something one day after getting it free for years and years? I wouldn't unless it was bigger and better than the free version.

3. People won't pay for something that was free unless it becomes much, much more valuable to them

Say you do decide to build a paywall around your content. It's the same content that was free, only now it has to be paid for. Consumers will not pay for something that was free unless the value of the commodity, news in this case, increases along with its price. If that doesn't happen, people will not buy in.

2. You're forcing people to make a choice - and news organisations may not like what consumers decide

You may have heard that Chris Anderson, US editor of WIRED and author of 'The Long Tail', has a new book out called 'Free'. In it he talks about the history and application of 'free' in the marketplace. He makes a very interesting point about what happens when suddenly consumers are confronted with having to pay for something that previously was free:

It's as if our brains were wired to raise a flag every time we're confronted with a price. This is the 'is it worth it?' flag. If you charge a price, any price, we are forced to ask ourselves if we really want to open our wallets. But if the price is zero, that flag never goes up and the decision just got a lot easier.

1. The timing could not be worse

This reason is more situational, however it's very important. You hear lots of people spouting off about how the recession is coming to a close, and more often than not they're completely and totally wrong.

But once the recession is really, truly over, it's not as though we're all going to be swimming in money. When that time comes, if people are paying for news, they will stop paying for something else. That's just how it works. Right now paying for news is an additional expense in the eyes of many. This is not the time for additional expenses. 

Ben LaMothe

Published 27 July, 2009 by Ben LaMothe

Ben LaMothe is a web & social media strategist with Florida-based advertising and marketing consultancy Renaissance Creative. You can follow him on Twitter.

22 more posts from this author

Comments (2)

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James

And they all have to jump at once. If one decent national newspaper stays free, why (for a UK example) pay to read the Telegraph online when the Guardian's staying free? Never mind the ideological differences between the two papers, people will be happier applying a politics-filter than with getting their credit card out. Then those online readers, when they find themselves on a train or somewhere else without proper internet, will tend to pick up the dead-tree version of the paper they read online.

Also, observe what happened when the WSJ went behind a paywall. No-one linked to it. It ceased to be a paper of record for the public, although those who needed it still bought it. It's less of a paper than it used to be, and this is one reason.

about 7 years ago

Ben LaMothe

Ben LaMothe, Web & Social Media Strategist at Renaissance Creative

Hi James -

That's exactly it. For it to work, it would require both a cultural shift in how news is perceived by the public; and an all-at-once approach to the paywall. Barring that, the ones behind the paywall will become niche by default. It could work out well for some, but really only if your niche is huge and contains mostly wealthy people with expendable income. If not, they ad rates will fall because the ad pool has been shrunk considerably.

about 7 years ago

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