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The Pay Wall: Leveling the Playing Field or Breaking All of the Rules

March 14, 2012

New York Times Pay wall

Paper Erects Pay wall

Why Can’t Newspapers Make Money Online

In a world where money talks and profits are the preferred vernacular, it’s no surprise that newspapers are attempting to stem the bleeding caused by their ever-declining revenue streams.  Print mediums have been on the decline initially with the creation of the Internet, but more recently with the expansion and mastery of the Internet.  With so many different things fighting for consumers’ attention, how can newspapers offer content in a way that both allows them to turn a profit and protect the integrity of their work?  Two words, pay walls.

Several newsrooms have erected pay walls for their online editions.  These make it so that readers can either view a select amount of content before being prompted to subscribe, or are unable to view anything other than headlines without a subscription.  The idea of paying for content on the web, when there is an incredible amount that is free, has caused many to ask why put them in place at all?  Is forcing people to pay for something when equivalences are freely available industry suicide?  So far the experiment has seen mixed results and the answer for the moment is yes and no.

The largest news group to make use of a pay wall is the New York Times, which has tried and failed with this idea once already.  The Times makes use of a soft pay wall, meaning they allow users to access a certain amount of content, roughly 20 pages, before they are forced to pay for it.  Although the website has succeeded in obtaining subscribers, people have already found ways around the safeguard.  The simplest of which is to max out the free page views on one device and then switch to another thereby resetting the counter.  Since the pay wall identifies readers using their IP address, all someone has to do is use a different computer to continue reading, which is relatively simple if someone is browsing in a campus computer lab or at a public library.

Another paper, the Augusta Chronicle, has also put a pay wall in place and has reported a 5 percent increase in page views in a three-month period.  A possible reason for the Time’s and Chronicle’s success, is that they are both using soft or porous pay walls that allow limited previews by readers .  Unlike the Greenville News, which is very close to the Chronicle geographically and recently installed a hard pay wall which prevents any viewership until a subscription has been purchased, and is most likely one of the reasons the Chronicle has seen an increase in traffic.

The idea of a hard pay wall is a bold move that can either net more revenue than its softer counterpart, or can push even more readers away.  Like in this article from Mashable, the author says point-blank that they stopped following their local newspaper, as well as the blogs it hosted, online because they installed a hard pay wall.  They went on to say that replacements with the same information were found in no time with no subscription fees.  This is the biggest hurdle newsrooms will face when installing pay walls.  If readers are not convinced that the content in front of them is worth paying for, then not only will they seek replacement content from another source but they might never use the original site again.

The pros for newspapers making this move are obvious.  There is the possibility for them to make money, an attractive idea since newspapers are for-profit organizations.  There is the potential to attach value to journalism and separate the professionals from the amateurs again.  Finally and perhaps most importantly, newsrooms might be able to use this new revenue source to stem the trend of downsizing that has crippled far too many staffs already.

The cons though entail a substantial amount of risk.  For example, there is the chance that readers who run into a pay wall will try to counteract it and siphon news without paying for it, or might leave the website forever and diminish page views and traffic, which is something advertisers will take note of.  Also, newspapers run the risk of looking stupid or greedy if they install a pay wall but none of their largest competitors do so, which would drive their readership to places that offer free content.

This is an aggressive and ambitious experiment and I can’t pretend to know how this will all turn out, but I do think it’s what online publications must do.  A website cannot release premium or professional-grade content without charging for it because they are for-profit entities that will not survive working pro bono.  With that in mind, I think the institution of a pay wall can only be done under certain circumstances.  For example, I would recommend that only mid to large-sized newspapers attempt to use pay walls because a small publication will just drive readers away to other local sources of information that don’t cost anything, like newsletters.  It would also be a bad idea for a newsgroup that is making money to jeopardize their situation by trying to make a little extra.  Most importantly, I think any pay wall installed must be a soft pay wall that allows for limited previews of the content in question.  Unless a publication has a stranglehold on its audience and runs no risk of forcing itself out of contention in the market, such as the Wall Street Journal and ESPN.

The biggest problem with an idea like the pay wall is that companies just throw them up and expect people to pay when they fail to realize that the people of the Internet are greedy and feel self-entitled because they are exposed to so much that is free.  If the content is of high quality and the information is credible and useful then most publications will be fine and will hold on to a majority of their readers.  However, if they are lazy and inconsistent they will gain nothing and stand to lose everything.

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