Paywalls: for many newspapers, the paywall remains more about print than digital

The issue of newspaper paywalls is one of those never-ending sagas where very little happens, but everyone likes to talk about the little details. Journalists love to talk about paywalls, breaking into camps that are more divided than the Democrats and Republicans in Congress.

Generally, I stay safely out of the way. I find these arguments among journalists to be… amusing. Rarely does the conversation actually involve points of view that I can take very seriously. For instance, the argument that paywalls are necessary to overcome losses in ad revenue can be simply countered with the question “where has this occurred, where a newspaper has made up for its ad losses with paid circulation?” Even the NYT, which has done about the best of any newspaper in driving paid subscriptions, has not seen total revenues increase due to its paywall – at best, it is mitigating its ad losses.

textures-wallpapers-bricks-brick-wall-red-bricks-texture-red-bricks-texture-wallpaperAs a publisher, I see a paywall like a boxer who ties their left hand behind their back to fight, then decides to untie their hand, but then tie their right hand – and then expects things to improve.

Peter Preston of The Observer makes a big deal about the new paywalls at Digital First Media. I see it as a non-event. None of that chain’s newspapers crack the top ten, and the actions of a chain that has twice declared bankruptcy in the past three years, and has been a laggard when it comes to digital publishing, is of little interest to me. What I see is simply a desperate attempt to mitigate continued losses in ad revenue, and little more.

My wife, who is a former newspaper ad sales person – we once sat at desks next to each other in the retail ad department at Hearst’s Herald Examiner in LA – traveled recently and talked to a fellow traveler who happened to be selling ad space for a Western newspaper. Ad space was down, he told my wife, and the reason was the paywall, he said. It is hard to sell digital with declining online readership.

There are many reasons why publishers put up their paywalls, but I am convinced that the only real reason they do so is that others are doing it. A few are true believers, and they long ago raised the wall. But others are simply going along because they have no other answers.

I am convinced that paywalls have more to do with print than digital. Still today, many publishers see their product as the print newspaper, their websites as extensions of that print newspaper, and so charging for online access makes sense. Conversely, how many free newspapers have raised online paywalls?

In fact, some have seen the relationship between their print and online products as so tight that they are considering going free in print because they believe the future is free access to news.

My position has not changed in the three-plus years of publishing TNM: paywalls will work for financial newspapers, I am convinced of this; for others, it is doubtful. The reason is simply the value on the information readers placed on the news. Where investment dollars are at stake, information is incredibly valuable. This would also apply in some cases to B2B: for instance, construction bid news is vital, a construction publication that incorporates bid news into their websites could charge for access without much trouble.

Still today, many publishers see their product as the print newspaper, their websites as extensions of that print newspaper, and so charging for online access makes sense. Conversely, how many free newspapers have raised online paywalls?

But in the area of newspapers websites, one has to evaluate the web properties. The Digital First Media websites and their outsourced mobile apps, are very low value properties. Charging for access probably will not work, if my theory holds. But what about the NYT, The Washington Post and other major newspapers? Depends, doesn’t it? If I lived in DC and worked in the government or at a lobbying firm, the WaPo would be vital. If I ran a grocery store in Alexandria, maybe not so vital. (I pay for the NYT as my reading habits have shown me that unlimited access is worth the price paid. But I do not pay for the iPad app as the paper has yet to show me where the added value is.)

Every six months I write another of these newspaper paywall stories and one feels we are not closer to resolving the basic issue of whether they work. The only thing that has changed is that more newspapers have raised the wall. One newspaper person asked me “how can all these people be wrong, clearly they know what they are doing.”

I was nice, I did not laugh out loud.

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