Rupert Murdoch's Paywall Disaster: Readers, Advertisers, Journalists & Publicists All Hate It
from the and-it's-working-for-who-exactly? dept
We had already seen the early indications that Rupert Murdoch's paywalls from The Times and The Sunday Times in the UK were a dismal failure, but as more information gets leaked about how the paywalls are working out, it's looking worse and worse. Beyond the fact that not too many people are signing up to pay, the move has upset advertisers who don't want to advertise to such a small audience:Faced with a collapse in traffic to thetimes.co.uk, some advertisers have simply abandoned the site. Rob Lynam, head of press trading at the media agency MEC, whose clients include Lloyds Banking Group, Orange, Morrisons and Chanel, says, "We are just not advertising on it. If there's no traffic on there, there's no point in advertising on there." Lynam says he has been told by News International insiders that traffic to The Times site has fallen by 90 per cent since the introduction of charges.On top of that, various PR people and publicists are keeping their sources away from Times reporters, preferring to provide access to news organizations where the story might actually get seen by people, rather than locked up behind Murdoch's paywall:
Publicists have told me that clients are increasingly reluctant to give interviews or stories to The Times, on the grounds that they would not be made freely available via search engines.Oh yeah, and because of all of that, journalists at the papers aren't very happy either. None of this should be a surprise, of course. Many folks, including us, warned that this would happen. Murdoch and his supporters keep trying to spin a happy story about the paywall, and are expected to release some official data soon, but the feedback coming out already suggests that rather than "saving" his newspapers, this action may have sped up the troubles they face.
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Filed Under: paywalls, rupert murdoch, the times
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Every single publication that is going the paywall route has plenty of experienced businessmen around who could see this coming a mile away, just like Techdirt and half of the internet did. I don't know whether they willfully ignored the obvious, or if they were really so deep in denial that they couldn't consciously acknowledge it... but it's pretty damn pathetic.
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The company I currently work for has a consultant (let's call him Andy) they use for "expert" advice. He's been involved in instigating numerous projects that everyone in the business, strategy and IT think are a waste of money, and can show why they're a waste of money.
We then implement said projects because the powers above force us to.
The project fails because it was pointless/stupid/ill conceived/whatever and the powers above ask us how we fucked it up so badly.
We then point to the consultant who turns around and says. "Hey guys, I just give advice I didn't actually tell you to do it"
Oddly enough, he's been getting away with it for eight years and counting.
My conclusion is many, many business have an "Andy" who "advises" on the best course of action. The problem is, none of the senior decision makers seem to realise "Andy" is only acting in his own best interests and that involves generating more work for his company. Usually at the expense of your own company.
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No need for Andy
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Great idea
Just call.
Andy
555-3455-344
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There's a problem that occurs...
So basically with Murdoch the best thing we could do is nothing at all. Might as well let him smack himself on the reality of the pavement than try to ease him down back to common sense territory.
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finish it quick
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Yes indeed, the Emperor has no clothes.
I could say he as as dumb as a bag of hammers, but that is being nasty to honest hard working hammers :)
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This guy is a big-name chief executive? He doesn't seem to have a very clear grasp of business or economics.
If a user is reading your content, they are providing you with something: their attention. You turn around and sell that attention to advertisers like WPP. How can an advertising exec afford to be so obtuse that they ignore this notion entirely?
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Re: Possibly a reverse meaning.
Newspapers, like any industry, basically have a set rate which they charge for advertising. If they hurt themselves by creating a paywall, an advertiser can either drop them and look for better advertising space somewhere else or they will negotiate for cheaper advertising costs with the dropping of the paywall. Advertiser wins, newspaper loses, and newspaper has to also find a way to get back readership of the people.
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Elite Power Masters Insist They Can They Bend Us
Billionaires like Sir Martin Sorrell and Rupert Murdoch are used to making the world suit their means, and the internet is their greatest challenge because its so unwieldy. Their greatest goal right now must be to end net neutrality -- it's the only way their grand schemes will work.
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Interestingly, if all of the private businesses providing news content (as opposed to those who use the content of others) go bankrupt, the state-supported news agencies (VoA, AFP, Xinhua, RT, etc.) will be the only ones left. Of course the governments of these various countries are far more democratic than any of the "private" news organizations, par. the Murdoch ones ....
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However, if the market or people are willing to pay $1 for it, then it's only worth one dollar, no matter how much it cost to produce.
What the solution?
Well, either
1) make it the most desirable object by marketing or any other kind of kool-aid and people will pay anything you want them to pay. e.g. The Apple Method
2) make it cheaper or less costly to produce so you can cover cost. These methods varies case by case and some has been discussed here.
Obviously, no one want to drink kool-aid from Murdock, so he needs to use 2.
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But to do 3), you'd need to work your nads off to get and keep a large audience. A paywall is a big, suicidal step in the wrong direction.
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Personally I think micropayments is an idea that needs to be re-investigated, that when you go to a site it can easily charge you a micro amount to your Internet wallet. I wouldn't mind paying a few cents to a nickel for each news story I read, provided I did not have to go through a complex sign-up process or pay flat rates ....
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For local, you'd have to focus on the cost side of the equation as well. You'd have to lower production values. And this is something we've seen in every local paper and local TV station as compared to national news. The best-hair anchors are national. So this is already done.
You'd have to leverage some low cost content to fill out your locally produced content. And this is something we have seen for years, with wire content filling out local papers.
Producing local news has always been a financial challenge, but one that has been solved. And web news is less of a threat to local than national. It often is STILL more efficient to get local news through a local newspaper than the web. ex: If I search for "new potholes" in Google, I'm unlikely to find the new holes in roads in my town. However, my local free rag has the pothole rundown, and pays for it with local ads. Local ads are also very valuable, because they are actionable with a short drive. I am unlikely to respond to a national barbershop ad, located in Cincinnati - given that I live in CA.
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Re: Everyone [Rupert] Wants Advertising Money For Free
At ACME, we bring tremendous value to your newspapers, Murdoch. We give you the money that keeps the journalists paid, and keeps the lights on. All I ask of you is that you deliver me an audience, and I'll keep giving you the money.
But now, you want my money for free? You want to cut the audience by 90% and you expect me to continue paying your bills? [and paraphrasing anon coward] "Take a serious look at the money I'm providing, and how much of an audience it would take to make it worth it."
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Re: Re: Everyone [Rupert] Wants Advertising Money For Free
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Re: Re: Everyone [Rupert] Wants Advertising Money For Free
I used to spend a good deal of time on The Times site. And I would click on adverts that I found interesting. Obviously, I can't do that any more.
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Why?
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Since when is Windows 7 or Office 2010 ad-supported?
Since when has FB made any money? Maybe they will make some in the future, but, like Google and Yahoo, they don't create content - they just create a software environment, which is vastly cheaper than having to hire people to write news stories.
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if no paywall, then what?
what about thankthis (thankthis.com), the no charge option, that Mike covered last week?
http://www.techdirt.com/articles/20100830/13072810827.shtml
Are there other/better options?
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Re: if no paywall, then what?
Paywalls restrict you from viewing the content until you pay.
and with the other two, you pay after you've read the content.
See the difference?
but other ways of making money online is going the google route, or provide an extra service no-one else delivers for a fee.
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You will never see them..... Murdoch will take them with him to the grave.
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Its called disruptive technology
But rather than fight to preserve that which is dying off, you have to find a new way to thrive. A pay content model can work if you provide people with a service for which they are willing to pay.
And while we're on the topic why is the times accepting advertising if they are on a pay model? If I pay to subscribe I shouldn't have to put up with advertising.
Mike, while its less dramatic rather than present bone-headed ideas like trying to get folks to pay for news that essentially is advertiser-supported and meant to be free, why not show a few examples where a pay model can and does work for this type of content? Hmmm.. maybe none exist. LOL
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Re: Its called disruptive technology
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Re: Its called disruptive technology
1) sex and things that get you laid
2) things that you can write off on your taxes
3) things that make you money
4) things that a required for work
Those are the things you can put a pay wall up for.
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Apple, Google, Yahoo, Microsoft, Facebook, Tweeter, Craiglist and others are players that know how to make money on the internet and they will supply whatever it needs to continue to do so, even if all news papers got under those players would pay for news like they are paying for music and video in a small way but growing.
In a few words "Mr. Murdoch is murdering his assets"
I almost few sorry for people who will be dependent on Apple, old Steve is notorious for his control tendencies bearing insanity, I also worry about the dynamics this will have but since ol'media seems incapable of adapting someone will take their place and I do think those better positioned are established internet business.
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Murdoch is old school
I feel sorry for the people who work for him. He's not going to admit that he's the one at fault. He's going to blame someone else.
The best thing his employees can do is to start job hunting. Actually they should have the second he mentioned his paywall idea.
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I'm just hoping he loses enough money so he can't pay the utility bills over at Fox News and the power gets shut off in the middle of a Glen Beck moronic rant...
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you're doing nothing. If it's not accessible on the web it doesn't exist.
If a dinosaur falls to his death in the forest, and no ones around to pay him...will his tears make a sound?
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I can't decide if that was brilliant or lunatic, but I love it either way.
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It doesn't have to be this way
No, buying things on the internet is way too bothersome. The government needs to institute an electronic cash system where you can make a simple click and buy the 50 cent daily paper, downloaded to your device of choice. No user-names and passwords to keep track of. No link to your bank account. A government backed gift card that you can deposit money on that acts like cash. Make that happen and micro-payments will be the new digital economic engine.
The technology is all there to make it happen. The REAL hindrance is advertisers greed for personal information, and the governments desire to turn the internet into a forensics playground.
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Re: It doesn't have to be this way
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Re: It doesn't have to be this way
I don't "hate" micropayments, I just understand enough economics to explain why they don't work.
Knowing it won't work and "hating" are two different things.
It's a fool's errand to assume that micropayments for such content will ever work. It's got nothing to do with it not being convenient. It has everything to do with economics.
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Re: Re: It doesn't have to be this way
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Re: It doesn't have to be this way
- You forgot "and track your ass across the globe recording your every move"
"The government needs to institute an electronic cash system where you can make a simple click and buy"
- No they dont. That is a horrible idea.
"The REAL hindrance is advertisers greed for personal information, and the governments desire to turn the internet into a forensics playground."
- and the media giants desire to turn a simple communications platform into a convoluted distibution device capable of watching you watch their content.
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Re: It doesn't have to be this way
Let me run through the drill:
1. Shows brought the audience,
2. advertisers paid to sell to the audience provided,
3. we, the audience, that is, bought the products the advertisers told us about,
4. the TV producers, in turn, got some of that money because the advertisers bought time slots for the next show.
It worked. Why is that a problem today?
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Re: Re: It doesn't have to be this way
All those factors have pushed the price of online advertising way down - it's not at all comparable to the rates newspapers & TV stations get.
Of course, I'm not defending micropayments. To me it's obvious that the real challenge is in improving the efficacy and value of online ads, and charging higher rates or selling more advertising (or both). But that is a challenge that will require creativity and innovation to overcome - unfortunately plenty of newspapers are trying to ignore that challenge and build a brand new revenue stream with paywalls/micropayments.
But it is still a real challenge, and though the overall model is "old hat", there is still much to be done to make it function in the new media landscape.
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It gets even better
Also, another innovation via The Guardian using the paper.li platform is the "Twitter Guardian" (http://j.mp/ayObau) where I can once more read something like the now defunct Guardian Technology Section, built using the Guardian's Twitter feed. Its actually rather good. I've been prefering it to the Twitter feed.
I am loving News Corp's faux pas with tech. First MySpace, now paywalls. Whatever next? Any ideas? :-)
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Nice article
I'm all for a light bit of Murdoch bashing with my morning coffee, but this is just rubbish. Put some effort in.
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Re: Nice article
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Re: Nice article
You want numbers? I have 4 letters for you: RTFA
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Re: Nice article
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Its better than paying for advertising we dont want.
Knowing it won't work and "hating" are two different things.
They dont work eh !!!, tell that to iTunes, or any phone company that charges micropayments for each SMS or call. iTunes has a hugly popular method of micropayments for music.
And ofcourse, whenever you see an add in Google, or whatever, you know fully well that each time you purchase an item that has ever been advertised you pay a MICROPAYMENT (sometimes not even that micro) as a part of the purchase price of the product.
To make statements that advertisement paid news or content is any cheaper than other methods of payment is wrong.
You fight against micropayment, but you cannot even see the big picture, and you somehow think that all the adds you see on google are there for free, and therefore all the money google makes each year is from providing content.
ITS NOT, its from being paid by advertisers, those advertisers are PAID BY YOU, and me, and everyone else who uses that product directly or indireactly, through the advertising tax.
But you cant see that, you only look at things through tunnel vision. I would rather pay NOT to PAY advertisers, especially of products that I will never use.
Consumers have worked this out, that is why various forms of NON-advertisment subsidised content is available for those who prefer to pay for content as opposed to paying for an advertising tax on everyone..
Where do you think these big companies get the money from to pay google, newpapers, magazines, TV and Radio advertising, billboards etc etc etc.. And you want them to pay for my news with MY MONEY, even if I would never read the NY Times. ? Nice one..
Talk about not seeing the big picture, or deleberate bias.
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Re: Its better than paying for advertising we dont want.
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Re: Its better than paying for advertising we dont want.
Which makes it even more insulting that Murdoch wants money from me twice. Once from advertisements and once from these so-called micropayments.
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Re: Re: Its better than paying for advertising we dont want.
What is different is this: The WSJ is the only consumer media site that has been able to charge for access on a sustaining basis.
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Re: Re: Re: Its better than paying for advertising we dont want.
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Re: Its better than paying for advertising we dont want.
SMS? Nothing to do with micropayments OR Internet based commerce.
Google CPC advertising? Micropayments? Hardly.
"various forms of NON-advertisment subsidised content is available for those who prefer to pay for content as opposed to paying for an advertising tax on everyone." ?? Please provide some examples?
Sorry Darryl, I think the one not seeing the big picture is you.
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Re: Its better than paying for advertising we dont want.
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Re: Its better than paying for advertising we dont want.
Impressive logic!
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Re: Its better than paying for advertising we dont want.
What, and you think that if you support a news site with micropayments, that you will get a discount when you buy the products advertised on the site? Rather you will pay the advertising costs in any case....
Moreover even if all the online news sites moved to micropayments AND abolished online advertising, the advertising industry would continue and you would still be paying your "tax" ....
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http://www.shirky.com/weblog/2009/03/why-itunes-is-not-a-workable-model-for-the-news- business/
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Re: www.shirky.com/weblog
Its far older than the internet.
Sure some advertisers might not like the lower exposure, but others might (and will) see that as an opportunity.
Its a tradeoff, how much you pay for content, if you want to let the advertisers pay for your content, then expent the content to be cheaper, but the cost of all products you buy will be more expensive.
Or you can have no advertisers paying, no adds and the cost of the content is all yours.
Most prefer something in the middle, advertiser driven news is generally biased and less accurate than independent news. (after all what news company is going to expose their biggest clients).
So if nytimes, wants to create content and allow people to purchase that content, its THEIR right to do so, and there is no reason why it cannot be made to work.
The hardest part of any micropayment system, its the payment system, iTunes have a system where you purchare credit, so does WoW, so does most ISP's and prepaid services.
So there is no reason at all that nytimes could not come up with a deal with ISP's, or carriers or easy billing agencies that would allow micropayments to be added to your monthly phone or internet bill.
You would find that once it becomes easy to pay 10c for a page view, then more and more people will take up that service.
But to say because something (especially on the WEB) has not worked in the past so it wont work in the future is very shortsighted.
May be the likes of shirky.com cant get the formula right, but companies like phone companies, electricity companies, ISP's, satellite TV, Pay per view, iTunes and many many more have been able to incorporate micropayment system very easily and effectively.
for how long have we been hearing about the demise of the print news media, except it never seems to actually happen.
I would not mind making a bet the nytimes will be around alot longer than Techdirt will be.. just a guess..
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Re: Re: www.shirky.com/weblog
If you aren't bothered to read - please don't write.
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Re: Re: www.shirky.com/weblog
Are you aware of Einstein's definition of stupidity?
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Re: Re: www.shirky.com/weblog
- Most people are NOT WILLING to pay for news content. The problem isn't how to collect the money the problem is people do not want to pay the money.
- iTunes, PVP, Sat TV, public utilities are not paid for with micropayments and have nothing to do with micropayments.
- 142 daily and weekly newspapers folded in 2009. The demise of print is real.
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I don't think anyone could come up with a better slogan for Darryl.
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The real problem
The biggest challenge facing newspapers is ... other newspapers (basically through the concept of globalization). There are WAY to many news organizations, between tv, radio, and newspapers. There are approximately 1500 daily US newspapers and just like Wal-mart, Target et al. slowly destroyed mom and pop shops, so too will large news organizations (like AP and Reuters) slowly eat up smaller news agencies.
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Re: The real problem
The problem the newspapers have is more complex than just globalization. Here is a small list ...
1) Peoples news reading habits have changed, they get their news passed to them from friends and family.
2) Classified ads have been replaced by craigslist, e-bay, monster, etc.
3) There are free sources for news.
4) People have gone more subject and interest specific in what news they read. Most articles in news papers are unread by people for this reason.
5) Advertising is cheaper and more targeted online, making it a more effective use of advertising dollars.
6) The news papers are leveraged to the hilt with debt.
7) People have noticed how biased the papers actually are.
Losing advertising dollars, drowning in debt, and people finding what they are interested in elsewhere has doomed the papers.
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Re: Re: The real problem
Nah. People view papers as biased only when the paper's viewpoint differs from their own and the same can be said about other media. Nothing new there.
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Re: Re: The real problem
Also, I would argue that most of your points are side effects of globalization, which is really a side effect of more efficient communication. TV probably would have had the same long term effect on newspapers if the Internet hadn't come along and speed up the process.
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Re: Re: Re: The real problem
Conglomeration and intra-market competition has a lot to do with that. There has been a decline in the number of family farms in the U.S. since ~WW2. They're still around and profitable, but bigger companies are occupying more land. The number of farms went down though...
Where do you think the blogs get their news? Do they have reporters? Usually not. Yahoo links to stories from NEWSPAPER COMPANIES. As does Google, MSN, etc.. Lee Enterprises, Gannet, AP, Reuters, Tribune inc.. You see these on stories all the time, but hey, who needs newspapers?
IHQ
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It's because of all the brain-dead MBAs.
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Now I remember - I used to read that once, but I have been in Italy for some years, their international edition is rubbish, and then the online edition went to a paywall, so I don't even read it now when I'm back in the UK...
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Monetization FAIL
1. Searched for reviews of a certain film to quote for an article I'm working on
2. Followed a link to a Times of London review of said film
3. Got booted by the paywall
4. Shrugged
5. Found an equally juicy quote from The Telegraph
6. Moved on with my life
The end.
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Right...
The responses to this article being a prime example.
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Right...
The responses to this article being a prime example.
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No one pays for lies and spin
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only 90% ?
A lot of early "free" stuff on the web went from free to charging and hoped to hold onto 10% . I'me sure services like Logmein, AVG anti virus, etc would be overjoyed if only 90% of their users opted for the free version of their product.
But if it's free somewhere else, people will eventually find out when they see the costs add up.
I see no future for newspapers. But I can see a future for reporters, if they can sell timely copyrighted content to outlets who are prepared to contribute something (when there are no newspaper sites left to link to).
Reporting of plain facts will be mostly crowdsourced. Opinion and analysis (ie added value) will be bought by websites from contributors to differentiate their sites.
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Micropayment etc
"Registration walls" tend to stop people in their tracks even when there is no charge, so it's not a money thing. I pay for wired magazine through my door (it's free online) but balk at free registration walls because they get in the way when I have no time (ie at the moment I am trying to read them). I pay for Economist subscription because they give me it all in MP3 form to listen to when walking the dog.
We pay for convenience and added value.
Someone should have the sense to develop micropayment that is so tiny financially as to be trivial, so that the only problem is the inconvenience. Then work on (and improve) the inconvenience aspect relentlessly till it works. Then let it spread until it becomes the norm.
then, down the line,(when no-one can remember a time before it) raise prices gradually. By then it will be a true friction free market and people will be able to vote for value with their feet.
By convenient I mean "built into the browser".
With crowdsourced ratings for articles that learn what you like and steer you to content you'll also like.
Effectively what google already invisibly does for web content. News will become like any other content. But some content (news or otherwise) will be free and some will cost a fraction of a cent. Dross will be voted out of sight, like a crap website in the search rankings. Quality will rise to the top and free market real time pricing will allow the microprice to reflect that.
My time to read a news article costs money. $1 for 5 minutes at least.
I'd rather spend a cent to know in advance that the article is worth my time, than waste 5 minutes for free finding it's not.
I'd like a system clever enough, for example (from related user feedback) to know that if I've already read X then Y will tell me nothing new.
But it can't happen in a single overnight leap.
Murdoch etc want us to make a step change and his product isn't good enough.
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Payfall parody
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No Way
Yes, because we all want to pay more for stuff, right? Sorry, micropayments are like a cancer as far as I'm concerned. Once they're accepted it'll be a micropayment for every single thing you click on. Thanks but no thanks.
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No Way
I would. Half the stuff I read turns out to be sensationalistic crap and worth nothing. And you can't tell until AFTER you've read it.
If paying for access makes you happy, then donate to the places you like...but don't suggest forcing a pay-or-else like this on the rest of us just because you're happy pissing your money away.
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No Way
Really? Looked at the magazine racks lately? There used to be thousands of magazines available, but not any more. The same goes with papers- so many have gone out of business in the last 10 years that I find your comment hilarious.
Print news media IS dying, slowly but surely. There will probably always be some still available, but face it: printed media is declining rapidly. It hasn't died utterly (and probably never will) but the trend is clear.
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It's quite simply an excuse so that when the Times etc die, they can blame "those greedy internet users" and not their own short-sightedness and failure to create a new viable business model.....it's all about passing the buck rather than just saying "Look we screwed up, newspapers were doomed from the day the internet was born....".
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