April 7, 2010 Last Updated 2:00 pm

If paywalls are such a good idea then why are its advocates pushing so hard to get others onboard?

Just a quick question: if you had a great trade secret — for instance, the answer to the question “how do I save my newspapers?” —  would you go around telling your competitor’s the secret?

Rupert Murdoch finds himself in a quandry: he wants desperately to construct paywalls, to start charging readers for content, but he knows that if his properties are the only ones to construct these obstacles to content then readers will simply migrate to his competitors. So while his papers begin raising the cost of entry, Mr. Murdoch is out there lobbying the newspaper industry hard, attempting to convince other publishers that the solution to the ills of the industgry is tightly controlling access to content, stopping the aggregators, and ending the era of free news.
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I am someone who believes there is an exception to every rule, so I do not doubt that a paywall, in the right circumstance, can succeed. But I think publishers place a much higher value on their own products than the public does. The best example of this is Murdoch’s Wall Street Journal. The WSJ introduced its iPad as a free app, but users must pay $3.99 a week to access the full content. If I were a broker I’d buy-in simply because I can expense it — it remains essentially free.

But what does everyone else think about pricing the iPad content higher than both print and online? As I write this 1,625 iPad users have rated the WSJ app: seventy-five percent of those have given the app the lowest rating possible; five percent gave it a five star rating.

To me, it looks like a trap, but many newspaper publishers are desperate enough to grasp at what they perceive to be an opportunity. Newspaper readers, though, are smarter than many publishers give them credit for. They have not been impressed with the web efforts of most newspapers, and are even less impressed with the mobile efforts they have seen to date. Newspaper publishers and the vendors that serve the industry continue to release cookie-cutter RSS readers that deliver the same old content, the same old way. They download these apps, and visit these sites because they are free. Put up a paywall and let’s see how many will chose the local daily’s bland offerings versus those from New Media companies.

I know what advice I would give a newspaper publisher considering constructing a paywall, but like Rupert Murdoch, I only give out free advice when the advice itself benefits me.

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