The pros and cons of newspaper paywalls: a Twitter debate


Debates over newspaper paywalls break out all the time, but not all of them involve a former Dow Jones chief executive, a former Wall Street Journal publisher, the current head of the Wall Street Journal‘s digital arm, the president of BuzzFeed and media writers for Bloomberg and All Things Digital. Just such a debate broke out on Sunday, however, and you can check out an edited version of it below (or there’s also a Storify version.)

I started things off with a critical tweet about a Bloomberg story by Edmund Lee on how the New York Times paywall was working “better than anyone had guessed,” which I contrasted with a post of mine about the decline in traffic to the NYT site (as measured by comScore) and what appeared to be a corresponding decline in advertising revenue — including digital revenue. Edmund responded that his story said circulation revenue has made up for the shortfall in ad revenue.

Edmund is right, of course — he did mention this in his story, using numbers from an analyst (which of course are estimates). And so I acknowledged that saying he “ignored” the shortfall was too strong — but still, his piece made it sound as though all you have to do is put up a paywall and your problems are solved, which I think is a Pollyanna-ish viewpoint. At which point, Josh Sternberg of Digiday noted that ad rates haven’t gone up at the NYT, as detailed in his recent post, even though that was the assumption on the part of many paywall advocates — i.e., that a paying audience would be worth more to advertisers:

At this point, I made the same point I’ve tried to make before about paywalls — that they aren’t a solution for everyone, and that even for those where such a strategy is working, they can’t be the entire strategy:

Peter Kafka of All Things Digital also jumped in to confirm that the NYT says the paywall has had virtually zero effect on ad rates:

Raju Narisetti, head of the Wall Street Journal’s digital unit, responded that one rationale for paywalls is that it allows newspapers to learn more about their readers, and thus hopefully target ads better — which is part of why I am in favor of membership-style approaches rather than blanket paywalls:

I noted that the latest estimates are that the online advertising market grew by 18% in the third quarter to $9.3 billion, and yet few newspapers — including the NYT — have seen anything like that kind of increase. Why?

Former Wall Street Journal managing editor and co-founder of paywall provider Press+ Gordon Crovitz then chimed in with a stat about how most paywalled sites see as much as a 30% premium for their ads — raising the obvious question of why the NYT hasn’t seen that:

Bill Grueskin — former WSJ deputy managing editor and now academic dean of Columbia’s journalism school — also jumped in to add that paywalls can harm a content business because they reduce the number of readers, and that affects the scale of the business:

At which point, former Dow Jones CEO Les Hinton said that quality is more important than scale:

And Crovitz came up with what for me was the quote of the day regarding ad rates and the newspaper business:

I suggested that it would be nice to see the industry spend as much time and resources on trying to get creative about advertising instead of just writing off the whole business as a lost cause, and Jon Steinberg — president of BuzzFeed — agreed:

And Grueskin said that the biggest issue for newspapers and advertising is that they no longer have the kind of pricing power they used to when they controlled the platform:

Post and thumbnail photo courtesy of Flickr user Giuseppe Bognanni


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