Are Newspaper Paywalls Possible? Maybe.

I finally got around to reading David Simon’s essay in the Columbia Journalism Review about how newspapers, particularly the New York Times and Washington Post, need to erect paywalls to ensure their financial viability. (Note: It’s somewhat ironic that the essay available for free online.)

Simon’s argument isn’t new but it does put the spotlight on whether newspapers can survive if they can’t figure out a way to generate significant revenue from the Web.

As important is the whether newspapers can continue to offer content that people will pay to read – be online or off-line – if industry conditions continue to shrink newsrooms and the quality of the people working in them.

While I love the idea of reading the NYT, The Guardian, The New Yorker and BusinessWeek for free, I also recognize it’s a take-and-no-give proposition. I read great content but don’t pay for it because it’s not required.

But – and I’m probably in the minority – I would be willing to pay if it meant getting access to high-quality content that was behind a paywall. For example, I would pay $5 to $10/month for the NYT, $5 for an online Globe & Mail subscription and $5 for BusinessWeek. That’s $15 to $20 that I’m not paying today – not a lot of money but hardly insignificant in the scheme of things.

Perhaps the most interesting angle to Simon’s essay is how TV has evolved from free to fee with the rise of speciality channels. In the process, consumers are paying $50 to $150/month for cable or satellite service.

How did that happen? How did TV manage to drag consumers to a paid product when a free product was available. Simon suggests initially it was content not available from broadcasters such as all-day sports and weather. In time, he said speciality channels have thrived because the content got better.

The question is whether are parallels to the newspaper business? Can newspapers convince people to pay for high-quality content that’s not available elsewhere? For newspapers such as the NYT and the Guardian, the answer is probably “yes”. For local newspapers such as the Toronto Star, it’s possible, although they need to get a lot more local to enhance their “value”.

Earlier this week at TEDxTO, Mathew Ingram argued Old Media (aka newspapers) needs to evolve, rather than be saved. and that newspapers need to engage with readers rather than just filter and broadcast.

These are certainly valid arguments but the challenge – and problem – is people such as Mathew need to be running newspapers because they “get” the Web and its opportunities. Of course, it would have better if people such as Mathew had been running newspapers five years ago.

As for whether paywalls can happen, ]Simons is right that everyone has to jump on the bandwagon at the same time if the concept can succeed. Someone has to make the first move because no one is going to leap out of the trenches to fight the good fight if it means doing it alone.

My take is the person to lead the charge is Rupert Murdoch, rather than the NYT or Washington Post. Murdoch is enough of a rebel with enough of a global media empire to make it happen, and open the floodgates for others to follow.

One final thought: While newspapers have embraced “free”, it’s been puzzling why magazines have followed suit given the kind of content they produce. If any media should be leveraging paywalls, it is magazines.

More: The San Jose Mercury’s Mike Cassidy has a column talking about the newspaper’s role – as well as the fact the number reporters working for it has dropped to 125 from 400.

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  • scott

    The question id why did Murdoch announce a plan to introduce the paywall in almost 12 months time rather than in one months time? Answer: he does not want to go it alone – if he did he would and not announced anything until just before he was ready to go. He knows if he does go ahead and everyone else keeps offering the same or close to the same content for free, his plan is doomed. And lets not forget this is the same man who just 18 months ago was ready to ditch the WSJ paywall.

    I think the pay option can work for niche / specialises content – which is why the FT and to an extent the WSJ can get away with it, but elsewhere? I'd argue less than half a dozen newpapers worldwide could make it work. With the rest there isn't enough differentiation. Also, in the UK market, the rather large elephant in the room is the BBC and the BBC website's news content (which we as tax payers – via licence fee – already pay for, and therefore will not go behind any paywall).

  • Fotis

    I have been mulling this over and I'm not sure a full subscription service is practical. It is somewhat expensive. I think we need more of a royalty system like the music industry. or the pay per use system used for toll highways. One possible example of how things could work would be:____- Having users set up a credit facility (either loaded with some money or billed to some debit instrument)

  • Eric

    I agree in large part to what you are saying Mark, I also believe that the Newspapers across the work and more spocificaly in Canada will either get local, highly specialized or go extinct.

    I am the typical case in point, my familly pays 150 a month for cable, I subscribe to a few magazines including WSJ and read the star for Local content (being in Toronto).

  • superchicken

    I don't know why they thought they should just give it away to begin with. By giving away their product like a whore at the end of World War II, they have decreased the intrinsic value of journalism to the point where we now expect our news for free.