More Movies Trying Out Tiered CwF+RtB Support Models

Yet Another Paywall Experiment Fails

from the doomed-to-repeat-mistakes dept

Fri, Apr 9th 2010 4:36pm — Dennis Yang

As we've seen time and time again, generally, when newspapers put up a paywall around their content, things do not turn out well. Yet, newspapers continue to put them up. While we applaud the spirit of experimentation, if they simply keep repeating the same experiment over and over again, with the same results, they're apparently not learning anything. So, it's not really surprising to see that yet another paywall experiment has ended badly. This time The Valley Morning Star, a small paper in Harlingen, Texas, decided in mid-2009 to implement a paywall. The paper, which has a circulation of about 23,000, was chosen as a test case for Freedom Communications' stable of newspapers.

The paywall, which launched the week of July 15th, cost $3.95 a month, 75 cents per day, or was included if you had a subscription to the print version of the newspaper. The rationale was that since online readers were not paying a subscription fee, somehow the value to the print subscribers decreased:

"It will allow greater value to our many loyal print-edition subscribers by not giving away the news to non-subscribers," Patton said. "The days of giving content away, which costs money to create and for which we charge our print subscribers, I think, are just over."

As we've discussed here before, this is a flawed argument. The subscription price of a printed newspaper barely covers the costs of printing and distribution, not the production of the content, which is generally funded with ad revenue.

In any case, after 8 months, the The Valley Morning Star took the paywall down, proudly proclaiming they "will be moving back to a completely FREE Web site." By now, so many of these paywall experiments have failed that you have to wonder when the industry will finally heed the lessons they teach.

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Filed Under: newspapers, paywall
Companies: freedom communications, valley morning star

32 Comments

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Wesha (profile), 9 Apr 2010 @ 3:53pm

So how many paid readers they got? The same 35?
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Nick Dynice (profile), 9 Apr 2010 @ 4:54pm

Their logic was: luddite = loyal.
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Anonymous Coward, 9 Apr 2010 @ 5:22pm

Paywalls for newspapers will work once every newspaper enacts a paywall.

IT'S SIMPLE ECONOMICS!!!
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Anonymous Coward, 9 Apr 2010 @ 5:33pm

I'm calling it right now. Their will be an expansion of copyright, and the DMCA to include "hot news".

The people that have traditionally controlled the flow of information are determined to do so in this, new age of peer broadcasting.

Their are lobbyists on capitol hill right now hammering out agreements, to push some yet unknown protection on their news. The argument goes: "It's no different than hearing a song, having a cover band play it and then selling it right along side of the artist that struggled to create it.". This is a fight that's been brewing for some time, but you can bet, it's going to come out of nowhere and get pushed through really quickly. As usual it will be embedded in some sham legislation called "Protect Children from Sexual Predators" or something else the crooked senators wouldn't be caught dead voting against... They know it's coming, these guys, the ones that are putting up pay walls they're just not big enough to know whats in the pipeline.

Q2 - 2011
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Anonymous Coward, 9 Apr 2010 @ 5:44pm

paywalls dont work when you are the only one doing it. row after row of free lemonade stands it is hard to charge a dollar for a glass. but the free lemonade stands dont last forever especially with the decline of income from print. it is a question of timing not of a failed concept.
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Anonymous Coward, 9 Apr 2010 @ 5:53pm

Re:
NO ITS NOT!!!

The film and music industries have paywalls around their content, and that leads to rampant piracy. However, since their content is relatively "long-life" they still manage to survive and even do quite well. Not so for news outlets, where their content is stale within a week. If they force their customers to turn to pirate news outlets, they may be doomed.
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Anonymous Coward, 9 Apr 2010 @ 5:55pm

Idiots
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Chargone (profile), 9 Apr 2010 @ 6:03pm

Re:
so... it'll work if you form a cartel?

...

...

yeeeah.
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Veritas, 9 Apr 2010 @ 7:30pm

I take the 4th, for fools
Is this the same group that lead the cheer for the Iraq war?
Is this the same group that didn’t see ANY of the financial melt down?
What kind of reporting are we really talking about?

Calling these people “professional” reporters is offensive to America. They can’t get the real stories that are affecting our country, so they latch on to the “current events” and claim they have “something to offer”.

Shame on US for listen to these charlatans.
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Anonymous Coward, 9 Apr 2010 @ 8:14pm

Re: Re:
no it will work when it is the norm, and when there isnt so much free stuff out there supported by other business models. right now websites are often just dumps of content paid elsewhere. when they become the only focus when print disappears then people will look at protecting their content more. then the subscription model is more appropriate.
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Anonymous Coward, 9 Apr 2010 @ 9:47pm

This proves that they are all INSANE!!!!

The definition of insanity is doing the same thing over and over and expecting different results
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Anonymous Coward, 9 Apr 2010 @ 11:12pm

Re: Re: Re:
Don't let reality hit you on the way out of your fantasy.
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Anonymous Coward, 10 Apr 2010 @ 12:17am

Re: Re: Re:
". . . look at protecting their content more."

While a massive amount of other people will go in the oppostie direction.
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Marcel de Jong (profile), 10 Apr 2010 @ 4:02am

Re:
The biggest news site in The Netherlands is arguably www.nu.nl which is a free (as in beer) news site. They don't have a print circulation but they have their own redactional staff now, all because of ad revenue.

Now what would happen if one of the large Dutch print newspapers were to put a paywall around their website. More people would flock to the free ones, causing them to have bigger ad-revenues because of more ad-views, so more money to do fun stuff with and expand their empire. Meanwhile the big print newspaper is doomed to failure, as they don't have the page views and the ad views, and arguably even less pageviews than before the paywall.

It's a simple matter of knowing human behaviour.

You can't get ALL online news outlets to go behind a paywall. There will always be at least 1 rogue outlet that would refuse to put up a paywall.
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Bradley Stewart, 10 Apr 2010 @ 4:40am

Everyone Is Just
getting tired of fees for everything. Before the ongoing scandalous treatment of banks and other financial institutions of their customers become so well known there was a comedy bit about a fellow calling his bank for some information. The customer service rep. on the line asked is that a question or a statement? The fellow asked why? The rep. said because if its a statement there is no charge, but if its a question that will be two dollars. Sure the people who work for these papers need to be paid just like anyone else who works. Its just that every time I seem to turn around someone wants to charge me for something. Just one last example. If I choose to pay my electric bill over the phone to a computer mind you just for the privilege of paying my bill I am charged an extra $3.50. Oh Brother!
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abc gum, 10 Apr 2010 @ 7:41am

Re: Re: Re:
Yeah, the only business model allowed is the one you presently own. All other (competition) business models should be outlawed in the name of protecting (your) copyright.
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Anonymous Coward, 10 Apr 2010 @ 7:58am

Re:
You are confusing "newspapers" for news sources. It could work once every news source puts up a pay wall.

If the papers followed your advice they would all put up a pay wall, and the internet readers will simply move on to another source.
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Anonymous Coward, 10 Apr 2010 @ 8:43am

Re: Re: Re: Re:
no business model holds up to everyone stealing things. the tolerance of such theft under the guise of information wants to be free and other little lies will evaporate over time. when you get old enough to actually make something of value you will change your minds.
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Anonymous Coward, 10 Apr 2010 @ 9:26am

Re: Re: Re: Re: Re:
So does that mean when I read a story about Joe Schmoe jumping off a bridge to kill himself on website B for free I'm stealing that information from website A and keeping it to myself so no else can have it? I mean, if website A who "owns" that story wants it back I guess I can give it back to them. get a clue before you post moron.
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Improbus (profile), 10 Apr 2010 @ 10:02am

Distributed News Syndicate
Has anyone started a web site that takes reports from the Internet and fact checks them? I am thinking that some one needs to start a site like Wikileaks or Wikipedia but for news ... WikiNews. You could get paid for your article/video/photos/commentary by the number of page views. This hypothetical news bureau could charge other news organizations a fee for accessing their content. This news would be distributed and not monolithic like the MSM (main stream media) who everyone knows work for their corporate masters. The MSM can not be trusted to give the news ... just propaganda.
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Anonymous Coward, 10 Apr 2010 @ 11:56am

Re: Re: Re: Re: Re:
Well, I'm convinced! You're arrogant.
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Hephaestus (profile), 10 Apr 2010 @ 7:45pm

Re: Re: Re:
"it will work when it is the norm, and when there isnt so much free stuff out there supported by other business models."

I spotted a really large gaping hole in your argument. Its Called Reality, perhaps you have heard of it. Currently the number of new blogs is growing at the same percentage year after year (previous I mistakenly said exponentially). A sizable chunk of them are news blogs. People are consuming news differently now than they were 10 years ago, they are choosing the news based on topics they have an interest in and from different sources. This trend is accelerating as more and more people go online and communicate with one another.

"when they become the only focus when print disappears then people will look at protecting their content more. then the subscription model is more appropriate."

Here is a word you might like to look up "Rationalization"
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Anonymous Coward, 10 Apr 2010 @ 8:55pm

Re: Re: Re: Re: Re: Re:
no you arent stealing anything. what a dense argument. if website b copied it from website a without persmission, then they stole it and you are just profiting from the theft. wegbsite a doesnt own the facts they own their writing of the facts. website b can write their own story. your argument is a fail, making you the moron.
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Anonymous Coward, 10 Apr 2010 @ 10:35pm

Re: Distributed News Syndicate
http://en.wikinews.org/wiki/Main_Page
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Anonymous Coward, 10 Apr 2010 @ 10:39pm

Re: Re: Re: Re: Re: Re: Re:
making moron is stealing in dense website, without permission, then you stole writing own the facts of theft through profit but website x has copied story. argument b from fail is just their writing from it. then they and of the website y over website z.

Well, I'm convinced!
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tom davis, 11 Apr 2010 @ 12:09pm

This has nothing to do with theft or IP. Its just business.
The newspapers make most of there money from ads now. Before they could get money from classifieds, but that is finished. They need to increase subscribers in order to increase advertising income. Have people sign up to view content online sure but for free. This way they can charge more for advertising. There are few papers that can get away with charging people to view online and not lose viewers. A paper would have to have something that no other paper can provide. The economist or the wall street journal come to mind.
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DoxAvg, 11 Apr 2010 @ 6:59pm

Re: Re: Re: Re:
As an aside, growing the same percentage year after year is the definition of exponential growth.

In a great Hindu legend, the king owes a single grain of rice on the first square of the chess board, and 100% (see: constant percentage increase) more on the next, and the next, and the next. It ends up being a lot of rice.
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Sal, 11 Apr 2010 @ 10:06pm

my town
so odd to see my town mentioned in this blog that i have been reading for years and years. :)
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Anonymous Coward, 12 Apr 2010 @ 12:44am

Digital version no good for
mopping up cat piss.

You can have the worlds most bestest digital news site but only the physical newspaper is absorbent enough to soak up common household spills.
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DerekCurrie (profile), 12 Apr 2010 @ 6:19am

Paywall FAIL, Subscription Over-pricing
The 'Paywall' experiment ended in failure back in the 1990s during the advent of the Worldwide Web. These retrograde attempts at paywalls are amusing testaments to ignorance. The fact is that there will always be free alternatives that will attract larger audiences simply because they are free.

Another FAIL is the attempt to over-price subscriptions to websites. Blatant user gouging has been going on such that paying for extended website access and features is prohibitive. With time there will be price corrections such that users will happily pay a reasonable fee if only to help out their favorite sites. For example, it's great that the New York Times now provides paid electronic versions of their paper. However, the cost is remarkably high considering the lack of required paper printing and shipping fees. Once they adjust their subscription fee to a reasonable price, their subscription rate will increase.

Conclusion: Herr Rupert Murdoch, Führer of News Corp., is a 20th century Luddite. Like all other over-priced paywalls, his will FAIL.
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BP, 12 Apr 2010 @ 7:54am

RE: Yet Another Paywall Experiment Fails
I don't see this as a problem with wanting to charge. I see it as a problem in not adding value when you sell something that is free elsewhere. What the news agencies haven't come up with yet is a way to make it worthwhile to pay for news. You see it in other Internet business models. For example, Slacker radio gives additional benefits for pay customers plus a free option for cheap people like me. I don't know how they're doing, but I know people willing to pay for those additional benefits.
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Stephen, 15 Jun 2012 @ 10:40am

It's 2012', this paywall is back up, the NYT paywall a huge success
And ya'lls look like a bunch of douchebags
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