FAQ: How would paywalls affect advertisers? (and other questions)

More questions from a student that I’m publishing as part of the FAQ section:

1. If News Corp starts charging for news stories, do you think readers would pay or they would just go to different newspapers?

Both, but mostly the latter. Previous experiments with paywalls saw audiences drop between 60 and 97%. And you also have to figure in that a paywall will likely make content invisible to search engines (either directly or indirectly, because no one will link to them which will drop their ranking). Search engines are responsible for a significant proportion of visits (even the Wall Street Journal receives a quarter of its traffic from Google). Still, some people will always pay – the question is: how many?

2. A newspaper website which introduces paid content is very likely to see a decline in number of visitors. How would this affect advertisers and the amount they agree to pay to that website/newspaper?

Advertisers will pay more per user, firstly. Both because they will know more about that user through registration details (and therefore advertising will be more targeted), and also because they know that that user has paid to see content, making them both more engaged and likely to be more affluent.

Of course, there will be fewer of those users, so the challenge is compensating for the loss of quantity through the increase in quality.

3. In your opinion, how could the concept of ‘charging for content’ affect the quality of journalism?

The interesting thing about the recent announcement by the editor of The Times is that he said they wouldn’t charge per article because that would influence their commitment to expensive journalism such as covering Sri Lanka.

An optimist would hope that charging for content would mean that a news organisation would focus more on unique journalism that doesn’t replicate what is available elsewhere for free. Sadly, I don’t think we’ll see that happen, at least in the near future.

It’s worth pointing out that many web operations churn out content because the advertising rates are so low they need to get as many views as possible.

On the flip side, if your paywall is preventing you from attracting enough readers to fund decent journalism, then you save the same problem.

More generally, putting up a paywall means that your journalism is seen – and criticised – by fewer people, which I would argue does present a quality issue. The future of journalism is collaborative, so if you’re putting up barriers you’re not enabling that opportunity to tap into the enormous knowledge in your former audience.

4. Do you think other newspaper publishers would follow News Corp and start charging for content or there would always be “free” places for news?

If News Corp makes it viable, then yes, others will surely follow. Until then I think almost all will sit back and see what happens with News Corp. But there will always be free places for news for a range of reasons: firstly, publicly funded organisations like the BBC and those with a social remit such as The Guardian; secondly, those funded by voluntary or foundation income such as The Bureau of Investigative Journalism and organisations like Amnesty; and finally, passionate citizens and those who simply like to chat.

5. Do you think that ‘charging for content’ is a vital business model which would last for long time?

I think it’s a business model that can work in some circumstances, if managed intelligently. The FT, for example, seems to be making it work, mainly because that content is financially valuable (I’d argue it’s information they’re charging for rather than content) but also because they’ve not cut it off entirely.

But broadly I think it’s the most difficult model because people never paid for ‘content’; they paid for a package and a service that included content. They bought a newspaper, not ‘the news’.

As for its longer term viability, as the means of production and distribution become more widely available, and advertisers themselves become content producers, it’s going to be increasingly difficult, and we’ll see increasing pressure on government to legislate to shore up publishers’ monopolies because of that, I fear.

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9 thoughts on “FAQ: How would paywalls affect advertisers? (and other questions)

  1. Caroline Beavon

    Do you see the papers putting price tags on the information they have become synonymous with? The FT is a respected financial paper, so people will gladly pay for their information.

    I guess we could see The Sun make a killing from flogging celebrity photos – one would appear in the paper, then you could subscribe to see more (i.e. the really juicy ones) online or via SMS.

    I know the Guardian has a social remit, does that stop them from making money to ensure the future of the paper? If not, then surely charging for their media jobs section, for example, would be an obvious choice.

    I agree there is so much choice of regular news, and unless all the papers agreed to start charging, then this can’t work, but some papers do have areas of expertise.

    Nick Davies touches on this issue in a recent lecture: he makes some really interesting points about how these proposed internet file-sharing rules could be used to protect anyone from getting over these paywalls and pinching the material, copying it and making it available for free

    Have a listen here

    http://carolinebeavon.com/2009/11/28/nick-davies-bad-news-whats-wrong-with-the-news-lecture-listen-here/

    Reply
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  3. Paul Bradshaw

    Yes, I do see newspapers moving in that direction, although that may take quite some time. Related to that, I can imagine news organisations partnering up to match strengths and weaknesses – the most immediate prospect of this is the independent news consortia.

    Reply
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