@ Media Dealmakers Summit: Arguments Over Pay Walls Are Practical, Not Ideological

Attempting to get some debate going from his panel at the Media Dealmakers Summit, Slate Group Chairman and editor-in-chief Jacob Weisberg actually had the best anecdote on the subject. After the panelists, Politico co-founder/EIC John Harris, Huffington Post CEO Eric Hippeau and Bloomberg Chief Content Officer Norm Pearlstine, agreed that pay walls represent a practical issue as opposed to an ideological one, Weisberg related Slate.com’s experience with pay walls back in the late 1990’s, just after it was formed with Microsoft (NSDQ: MSFT) (it was sold to the Washington Post Company (NYSE: WPO) in 2004). At its highest point, 20,000 people were paying $20 a year for access to Slate.com. Not bad, Weisberg said, especially for 1997, but executives quickly realized that it would prevent it from gaining a wider audience and with little revenue in return. So at one point, Michael Kinsley, Slate’s founding editor, printed up t-shirts relaying a message to Microsoft: “Mr. Gates, Tear Down This Wall.”

When Pearlstine was asked whether his views surrounding pay walls were “ideological” — simply a matter of right and wrong, that companies should get paid for their content, no matter the outcome — he said for him, it was a practical matter. “It’s supply and demand. If you can suspend those laws, you might as well try. But our own experience is that you can charge a lot of money from an audience that has a special need for your content. The report on where all the best football players are going to college is important to some people. But most general news is not sufficiently distinct. There are some smart people who are betting on it. It seems to me more out of desperation than from an actual business plan.”

Harris added that Politico has no plans whatsoever to charge for “anything we currently do.” The current revenue goal includes getting half of the revenues to come from online, with the other half from the print product. They’ve just about reached that goal, he says. “Most of the revenue was always coming more print, but not overwhelmingly so.” He also expects to get a lot of the digital revenues from the e-mail newsletter, which he said is sent to 25,000 readers daily. On the issue of paywalls, though, he did say that Politico would like to come up with premium products that “We can and should be paid directly for.”

Hippeau also stated his commitment to keeping HuffPo free and ad supported, while getting additional revenue elsewhere. He pointed to the non-profit investigative project it and and backers fund in Washington DC. “Everybody’s heard about Newsday and with the addition of only 35 paying customers, it’s simply not viable. We’re experimenting. That includes the non-profit model and sponsorships. When you have two million comments, our stuff has a tendency to go viral. We’re trying to find ways to monitor that activity and engage on a real-time basis. As we deliver more tools, we’ll have more self-serve ad tools. For example, we had HSBC sponsor our Davos Twitter feed and we’ll do the a similar sponsorship with others for the Olympics this month.”