Feb 01 2009
10 reasons news sites should not use paywalls
I find it annoying that people are still bandying about old ideas when we need new ones. So here’s a Top-10 list that should, hopefully, move things along.
- Paywalls annoy people
- The hapless reader has found a link in Google or a blog or some other site. Worse, in his RSS feed. He clicks, waits, and finds he must sign up or pay money. He clicks back, angry for having wasted the time. If he clicked from your blog, he’s angry at you. He can get information elsewhere for free – why did you waste his time? Do you not respect him? Don’t you know he’s busy? Are you in cahoots with that other site?
- Paywalls discourage links
- Because paywalls annoy people, I for one won’t link to a site that has them. People shouldn’t: it’s disrespectful of readers. And for people inclined to troll through my site here and find examples where I have linked to something that requires registration, please do. I will purge, cleanse, and take wheat-grass juice enemas.
- Paywalls are anti-web
- The web is built of documents, and links between documents. No links, no web. It’s a tautology. So if paywalls discourage links, they must be anti-web. Do you want a business on the web based on an anti-web model? Yep. Like tits on a bull.
- Paywalls must fail
- “Information wants to be free,” said Google’s Schmidt. “Information doesn’t want to be free any more than gasoline wants to be free or food wants to be free,” says Gerry Storch. I’ll believe Gerry when oil and chili sauce spray out of my monitor. Anybody can make content and get it to me for free. And they will. Put up a paywall and watch them storm the ramparts.
- Paywalls cause war
- No, not the bomb-shoot-stab kind of war where people die and stuff. Tech and law war. Like the spam war. Like the Gatehouse “aw, stop LINKING to us” war. If you are actually successful at having content no one else has, and charging for it, someone will find a way to get it free. And then your programmers will get overtime to fix it. And someone will find another way. Ad nauseum. Why bother?
- Paywalls are a scam
- Because readers can get the content free elsewhere, and you can deliver it for free, you are trying to charge for something that has a value of…FREE. Rip-off!
- Paywalls limit readership
- Anyone in the content business knows that their product is not newspapers, or broadcasts, or magazines, or even news, or even content, or even information. No! It is readership. Your product is readership, which you sell to advertisers. More readers = more ads = more money. In the bad old print days, newspapers had to charge subscription fees to offset the costs of delivery. Hey, no more cost of delivery! Why charge subscription fees and limit your readership, then?
- Paywalls hurt ad revenue
- Follows from above, paywalls reduce readership. Someone will be quick to say, “Oh, but it will be a qualified readership, more valuable.” Bullshit. You can get the same qualification by having users sign up to comment/upload/post on forums etc. There are two types of readers: one hit wonders from Google and locals. Your job is to get locals to participate, not try to squeeze every last dime out of them.
- Paywalls are old-think
- In the olden days, newspapers had monopolies. Those monopolies can now die with a Wordpress install. In days of yore, you could force people to pay your price. Now, the only price is…FREE.
- Paywalls don’t work
- Oh right…we don’t have to argue from principles. We can just gather empirical evidence.
6 Responses to “10 reasons news sites should not use paywalls”
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#1 is true, but many people will respond to that annoyance by simply ponying up the money for an account
#2 and #3 are the same, and there are plenty of things on the web that have nothing to do with links and that people pay for (like iTunes)
#4 is true, and there will be piracy, but the effort required to pirate a daily newspaper will probably be much more than anyone wants to invest
#5 is the same as #4
#6 is ridiculous on its face.
#7 is true, and it's a big reason why the NYT dropped its paywall. But online ads are not supporting the industry like print ads were. And it simplifies the complex nature of paid newspapers. People are more attached to paid newspapers because they're valuable to them, and that's important to advertisers. 100 people paying $10 a month is better than 10,000 people creating a few cents in ad revenue.
#8 follows from #7. And most sites with paywalls don't have ads anyway.
#9 we can't start bashing old-think until we figure out what new-think is.
#10 is a strong argument, but the companies being used as examples aren't exactly raking in the dough. To be used as an example, your decision should be seen as successful. We don't know that yet.
The idea that newspapers should be free because newspapers MUST be free is an opinion based on a desired outcome, but I don't think it has enough evidence behind it yet. It may be that the future newspaper business model doesn't have a paywall, and I believe that's probably the case in the long term, but we can't call it a done deal until we have more examples of where it's worked.
Thanks Steve, some good responses. Now if you'll allow me to rejoinder:
#1: An insignificant number will pony up. My guess is less than 0.1% will pony up. Probably much less than that. Remember, most people are coming in from links on blogs and Google and other sites. They don't care enough bout you or your site or, very likely, even your town to bother signing up.
But just try finding some actual numbers on that. Nobody appears to be studying it.
But importantly, it's still an annoyance. A small point, smaller than the next point (which is NOT the same point).
#2. That paywalls discourage links is not the same as paywalls are annoying. Paywalls discourage links BECAUSE paywalls are annoying. Just as good etiquette should prevent you from linking to a huge mo-fo PDF file without warning, good manners should prevent you from linking to spam sites, garbage, or anything requiring you to sign up.
#3. Again, this is a different point. It is BECAUSE paywalls discourage links that they are anti-web. It requires the link-discouraging part plus some other premises. To complete the syllogism:
a. Any action that tends against the essence of a thing is anti-that-thing.
b. The essence of the web is links.
c. Paywalls discourage links.
d. Ergo, paywalls are anti-web.
But you did try to present an argument here: that the essence of the web is not links because there are things on the web that have nothing to do with links.
It should come as no surprise, given that the essence of the web is links, that things that have nothing to do with links are not on the web. iTunes is not on the web. You have confused the web with the Internet.
#4. This one wasn't about piracy. It was about other smaller (or bigger, I don't care) entities such as bloggers and online-only news companies etc. eating your lunch. If you don't provide the news for free, someone else surely will. And they will eat your lunch.
#5. This was the one about piracy. And people will definitely find ways around paywalls if it is easy. And it is easy.
#6. Really? Then you should sell ice to Eskimos.
#7. Yeah, but online ads don't HAVE to support the industry like print ads were. Get rid of the whole print apparatus, and you don't have to make as much revenue. You said this yourself in our interview!
#8. Right: #8 does follow from #7
#9. Like, if it ain't broke don't fix it? I think it's broke.
#10. Agree. And you have WSJ on your side. Someone help me out here.
And I agree with your closer.
[...] gone to great lengths on this blog (I’ve been tenacious, even) to argue that paywalls are the wrong way to go. [...]
I think that you’re spot on. Given the economic climate at the moment, this would probably be a very bad time to start charging subscriptions. The ‘credit crunch’ is already making consumers cut back on things that they would normally buy (eg. actual newspapers), so they’re just going to turn to the free alternative rather than pay a subscription.
I think the Jeff Jarvis quote is particularly true; “Micropayments have never been shown to work except when distribution is tightly controlled (see: mobile phones and iTunes)”.
Printed Matter’s quote is also a really straight forward way of thinking about profitability in papers across the board “Your product is readership, which you sell to advertisers.” – fantastically concise + accurate.
This comment was originally posted on http://onlinejournalismblog.com/)“>Online Journalism Blog
You’re dead right and dead wrong at the same time.
You’re dead right that anyone who thinks they can charge for their bog standard information online just because they need to is doomed. The supply of generally interesting content and very specific interesting content and the ability to sort through it and find it are such that the value of most content is zero.
But you’re dead wrong in saying that micropayments don’t work or can’t work. They are already all around us. There are plenty of circumstances in which people pay for content in small chunks if it’s provided in a format that means they are actually buying something else as well. Generally that’s time or convenience or information that has monetary or social value from which other people are excluded.
Facebook is a good example. There are two factors preventing Facebook charging subscriptions. They are a network business where there is really only room for one or two massively scaled providers. If they charged then they would cease to benefit from network effects and would be very quickly dead. Secondly competition – if they charged then along would come another service that didn’t. The low cost of setting up a social network service means that they can’t charge because a competitor will come along and offer the same service for free and take advantage of those pesky network effects.
So what has this got to do with newspapers? Well, it means that ny newspaper that wants to be a mass medium can’t charge. But a newspaper that wants to specialise and develop deep walled content on something that matters to a big enough audience can indeed charge. They just won’t have anything like the sort of revenues that newspapers currently expect to have.
The second element that this analysis and similar ones never take into account is the feedback loop. Given that online ad revenue can’t sustain any online only news operation, many of these newspapers are going to die and take their websites with them. That has a dramatic impact on the supply of certain types of content and potentially therefore in increasing the price above zero. Your assumption that there will always be an oversupply of reliable information online is an assumption I don’t share.
It is silly to say that it is not possible to charge on a platform where content has previously been free. In fact that’s the norm.
HBO makes good money on a “free” platform because their stuff is high quality and the price for alternative ways of getting that content is too high (wait for it to come to dvd or network TV vs $10 a month)
I pay a few dollars a month for an ESPN Insider subscription because I hate hitting walls inside their site and they bundle it with a magazine.
I pay 99c for a ringtone on my iphone that with a small amount of effort I could make for myself. But hey, what’s 99c vs messing around for 10 minutes with Garageband..
I pay $12 a month for satellite radio even though I can get free radio because it goes deeper than I can get on broadcast radio.
I pay $25 a month to Lynda.com so I can have training videos at my fingertips rather than have to scramble around a bunch of Knowledgebases designed in 1996.
But what you’re doing has to be exclusive and it has to make life more convenient. Anything that doesn’t meet these criteria is indeed doomed to fail as a paid medium.
In the end I feel quite positive about all this. If we get to a point where content producers find niches and alliances that create information that people value enough and ways of delivering them conveniently enough to give them value then journalism becomes harder … but possibly better. That’s good.
This comment was originally posted on http://onlinejournalismblog.com/)“>Online Journalism Blog
Thanks John – I agree there are ways to charge for content online, but my headline was about online news – not training videos or entertainment or ringtones or other content. But I also think the micropayments strategy is stifling real creativity in online business models. If you look at the successful business models online, they’re not based on micropayments; they’re based on being useful platforms that either generate a large enough audience to sell advertising, a large enough audience/enough utility to sell freemium services (e.g. Flickr), or effectively create a new market for new goods (e.g. Facebook’s virtual gifts). I don’t see enough exploration of this from news orgs.
This comment was originally posted on http://onlinejournalismblog.com/)“>Online Journalism Blog