Tag Archive | techdirt.com

Paywalls and journalists, sinking or swimming?

Image taken from runawaytrader.com

The future of traditional news outlets has been a topic of controversy for several years. Until recently, news companies, especially newspapers, have watched the internet suck up content for free.

However, these companies are now fighting back by introducing paywalls, which require readers to pay for articles and stories.

The Times of London was one of the first publications to block content behind a paywall in July 2010. The entirety of the site is restricted for readers who pay to see it. This is known as a “hard” paywall.

Since 2010, American publications have followed suit with The Times of London, but many sites do not completely block off readers.

The New York Times for instance, allows readers to view 10 stories before the paywall will go into effect. This is known as a “threshold” paywall.

Writer Clay Shirky discusses the benefits and downfalls of a paywall in his piece titled “Newspapers, paywalls, and core users.” He argues that 2012 may be the year newspapers drop the idea of treating all news as a product and all readers as customers.

Paywalls have introduced a feud between the newspaper and the reader that no one could have ever predicted. Writers are struggling to keep food on their tables, while readers insist they shouldn’t have to pay for something that has been free in the past.

An activist group, called Anonymous, has openly expressed anger over paywalls, specifically the one put onto WikiLeaks. The group, that had once coincided with WikiLeaks, has claimed  paywalls are unethical.

Anonymous released the statement:

“Regardless of any workarounds, the fact remains that a meretricious page is placed for the majority of visitors that cannot be closed. The obvious intention is to force donations in exchange for access. This is a filthy and rotten, wholly un-ethical action – and Anonymous is enraged.”

Shirky more or less agrees with Anonymous and argues only a select group of devote readers will pay for content. He said those who pay for access on a news site see the source as a vital part of society. These people are willing to read anything produced by the site’s writers.

Due to the fact that these committed readers make up such a small percentage of general population, many news sites have seen severe dips in readership rates.

Going back to the Times of London, it experienced a reported loss of 4 million readers after the paywall was implemented. That’s a conversion of only 14 percent of readers who were made into subscribers.

Paywalls have also taken a hit with advertisers. Advertisers want their content to be seen, and a paywall significantly cuts out the number of eye balls affected by an ad.

It has been argued that the combination of paywalls and advertisements simply doesn’t work. Ads need to be conveniently placed in front of consumers, not blocked behind stone walls where only a small number of subscribers can access it.

Mike Masnick, of techdirt.com, stated that putting on a paywall is “suicide” for a news site. He said the only reason the New York Times has gotten away with it is because it is one of the biggest newspapers in the country. It is also extremely “leaky,” he added.

When the Times first introduced the paywall, it allowed readers access to 2o stories a month before they were required to pay. To the average reader, this is a large number of articles that will rarely be exceeded.

If they do happen to overstep the threshold of allotted stories, readers can access an unlimited amount of stories via search engines or social network sites. So the question remains, why would someone pay for something they can easily get for free?

However, as with everything, there are positives incorporated with paywalls.

The New York Times Media Group has reported approximately 454,000 paid subscribers to its digital products. These dedicated readers are providing funds for writers and editors that were never there before the paywall’s appearance.

There are many speculations that the Time‘s revenue will only keep growing. Fredric Filloux, of the guardian, even said traders who sold their NYT stocks after the paywall were mistaken in doing so.

There are even optimistic points of view when it comes to advertising. By requiring readers to register to pay, the news site will have access to information about the reader, which positions it to target the individual subscriber more effectively.

Paywalls, whether hard or threshold, and the news outlets that implement them, still have many unanswered questions to account for. No one can predict the future of the news media, but it can be said something needs to be done if journalists’ incomes hope to stay afloat in a sea of free news content.

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