In defence of paywalls (a thought experiment)

It may be received wisdom that paywalls don’t work, but that seems to me a great reason to challenge that wisdom.

Here’s the thing: the media landscape as we know it is now unsustainable.

It doesn’t matter if all newspapers stopped publishing online overnight, or blocked Google, or anything else. The problem lies offline: the business model no longer supports the debts. The advertising has left the building.

Now news organisations are looking to online to save them.

And hence we come to paywalls.

Turning around a tanker

If you work in a news organisation this is the institutional position: your whole structure is built around selling and distributing 2 things: advertising; and platforms filled with content (newspapers).

Now, when the first (and main) revenue stream goes, what do you do? Do you take a long-view gamble on something that requires you to restructure the culture of your organisation? Or do you go with route of trying, somehow, to get people to pay for content alone?

Seen alone, that may look like a flawed strategy. Your product is perishable, the customers have already paid for the platform, and you don’t control the distribution.

But the people you have to convince in your organisation believe their work is worth paying for. Do you lose time and money convincing them otherwise, or do you move fast because time isn’t something you have to spend?

Do you come up with an idea that requires investment and change – which also takes time – or do you come up with one which adjusts the existing model cheaply – and quickly – and is more likely to bring in some money, even if not at the levels which might secure the long-term future of the organisation?

Do you come up with an idea that looks to protect what revenues you have?

When you’re driving a tanker and you see a big rock ahead – do you ask everyone on the ship to rebuild it as an aeroplane? Or do you start steering away in the hope that your part of the tanker will somehow avoid the worst?

Sometimes we need to make mistakes twice. Sometimes things change enough to make it work second time round. Sometimes it’s in the execution and not the concept. And sometimes things need to get worse before they get better.

What happens next

I can see a number of things happening as a result of news organisations charging for content:

  • First, it will put organisations like the BBC, NPR, ProPublica and (to a lesser extent) Guardian in a strong position to claim they are providing a public service and appeal for, retain, or increase, public and donor funding. Among all of the mercenary rhetoric it’s worth remembering that news has a civic and democratic value as well as a commercial one.
  • Second, it will strengthen the ability of any organisation that has free content to attract larger visitor numbers and therefore higher advertising revenue. In effect, the paywalled news organisations will be giving up on at least part of their advertising, which will actually make it easier for other news organisations to make advertising viable.
    (And yes, paywalls may well be the final nail in the coffin for some companies – it’s fair to say that advertising revenue is now so thinly spread that it will not support the number of media outlets it once did. Let’s not extend that misery. Some news organisations have already lost.)
  • Third, it should put pressure on paywalled news organisations to create unique, valuable content that people are willing to pay for. That’s a very different dynamic to filling column inches with a roundup of what’s happened in the past 24 hours. And it’s a very different commercial context to the one that led to only 12% of stories in the quality press being generated by reporters.
  • Fourth, it will most likely force news organisations to look beyond content alone and towards providing services like those that have given some creative news organisations profit margins of nearly 30 percent.
  • Fifth, for that reason we might discover some models that actually work. And we’ll discover which ones don’t. It’s never as simple as ‘Paywalls don’t work’. History may suggest it’s not a gamble that’s likely to pay off, but there may still be a black swan out there.
  • And finally, it will clear the way for independent media companies and startups to do more with their own content and services, and more agile business models. They will have the luxury of starting from scratch, without debts to service, stakeholders to satisfy, or cultures to rebuild.

So when the alternative is a slow, passive agonising death, let’s stop fussing about hypotheticals and let the Great Paywall Experiment begin.


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