Fans of newspaper paywalls like to roll out a number of defences for their position, including the fact that some publications — such as the Wall Street Journal and the Economist — charge for their content, and therefore, every newspaper should be able to. Another popular rationale is that other content industries charge for access to what they produce, and therefore, newspapers should be able to do likewise. The latest version of this argument appeared in an op-ed piece in the Wall Street Journal written by TV writer and host Peter Funt, entitled simply “Customers Will Pay For Online Content.” The important point to remember, of course, is that the type of content has a lot to do with whether people will pay.
One of Funt’s main examples is HBO, the subscription TV service he says revolutionized the television business by proving that viewers would actually pay for TV content — material they were previously used to getting for free over the airwaves. He also mentions that consumers have shown a growing appetite for buying old episodes of TV shows, first on videocassette tapes and then on DVD, and that radio listeners have also signed up for subscription-access services such as XM Radio. Funt says:
virtually all trend lines in recent communications history have moved, with success, from free distribution to some form of pay model. The viewing and listening public has demonstrated repeatedly its willingness to spend for content, so long as there is some degree of perceived value.
Funt isn’t the only one to turn to HBO for evidence that paywalls could work for newspapers. David Simon, the widely admired creator of The Wire television series and a former Baltimore Sun reporter, has argued much the same thing. But, the flaw in this argument appears in Funt’s own description of why HBO succeeded in charging viewers for TV content: He says that “much of the fare, such as recent movies, concerts and high-profile sporting events, was unlike anything available on ‘regular’ TV.” In other words, it provided something completely different, and thus worth paying for.
A similar argument could be made for much of XM Radio’s content as well. Both XM and its former competitor Sirius Satellite Radio paid millions of dollars to radio jocks and commentators such as Howard Stern to get them to appear exclusively on satellite radio (it’s worth noting that both companies also lost hundreds of millions of dollars and wound up merging in 2008). In other words, the content was unique and different — and satellite radio also arguably offers convenience of access and higher quality compared with terrestrial radio (DVD versions of TV shows could be seen in this way as well). Can we say any of those things about the paywalled content offered by newspapers?
As Funt notes, News Corp. has recently launched a paywall at two of its newspapers — the Times of London and the Sunday Times — (with a fairly predictable effect on readership), and the NYT is preparing to launch a paywall based on the “metered access” model used by the Financial Times. Other newspapers that have launched paywalls include Newsday in Long Island and several papers in the Gannett chain. In many cases, however, these experiments seem aimed as much at keeping existing readers of the printed version as they are at extracting money from online readers.
The problem with both of Funt’s examples — HBO and satellite radio — is that they offered something different, something new enough or unique enough that it made what they were selling qualitatively better or more valuable. Some newspapers (including the New York Times, with Times Select) have tried putting content from columnists or features or special sections behind paywalls, and had little success over the long term. The reality is that most of what newspapers offer is a commodity product, something that has a relatively short shelf life and therefore is difficult to sell as unique or different. Until newspapers solve that problem, their paywall attempts are likely doomed.
Related content from GigaOM Pro (sub req’d): What We Can Learn From the Guardian’s Open Platform