PerfectMarket

What Price, Paywalls?

 

Paywalls: Who's starving who?

Paywalls remain one of the most hotly debated concepts in all of online media.

Supporters and naysayers stare across an ideological divide. For supporters, free online news sites amount to high-way robbery--giving away the hard work of journalists and editorial staffs to users who take the privilege of high quality journalism for granted.

Naysayers do not deny the value of journalism, but rather emphasize the importance, and indeed rewards, that come from the millions of eyeballs that visit, link, and share free content.

Thus, both sides have watched closely as Britain's The Times put up its paywall. It seems nearly everyday, Twitter has been flooded with a new number demonstrating drastically reduced readership of the online site.

Paid Content reports that only 0.5 percent of Times readers have chosen to become paid users of the online site. Worse still, only half of this 0.5 (0.25 for the mathematically challenged) are actual subscribers to the site (the other half pay on a day to day basis).

The Times and paywall supporters do not seem as shocked, or frightened, by these numbers as one might anticipate.

In the long run, they hope, these loyal customers will pay off:

“The Times is not operating a freemium service, and it has made a grand, long-term strategic readjustment in its conception of the role of readers between its output and its income - from 'visitors' to 'customers'...”

One key idea behind The Times paywall is their refusal to kow-tow to search — and by extension, social users. Indeed, as many in the publishing industry open up to the idea that search and social users can be valuable, The Times (and its ilk) adhere to the belief that search and social users do little more than flit in and flit out.

“It will shed few tears for the 99.5 percent of visitors, many of whom had flown briefly in and through from search engines, who have not paid up,” an executive claimed.

In many ways, the great paywall debate can be boiled down to the debate over the value of search users and other non-branded site traffic sources.

Until someone (cough, cough) can prove that search users and alternative traffic sources offer more to a newspapers website than merely a disengaged eyeball, paywall supporters will continue to discount their importance -- the ideological divide will remain, and walls will continue to go up.

Paywalls don’t seek to solve the problem of under-monetized search users, only to shut them out. This is a band-aid solution. Google is not going anywhere. Search and social media are here for the duration. We can embrace that 99.5% of users and take advantage of their clearly stated intent or raise the draw bridge on our digital castles.

As a history geek, I know one thing about sieges: eventually someone will be starved out, and its usually the ones behind the wall.

— Lee Glandorf

Tags: paywalls, perfect market vault, news business models,