The Media's Paywall Obsession Will End In Disaster For Most
from the you're-just-not-worth-it dept
We've written about paywalls for many, many years -- often in fairly critical terms. It's not that we think that paywalls are somehow "bad," but that (1) for most publications, they won't actually work and (2) they are quite frequently counterproductive. In addition, we believe that there are both societal and business advantages to having certain information be available for free. Paywalls are (once again) getting attention, and there it's worth discussing this latest round of interest and why it's misguided. First, the general opinion from media folks on paywalls is pretty nicely summarized by Megan McArdle's recent story (possibly paywalled...) entitled "Farewell to Free Journalism." The key thesis is that the online ad market has basically disappeared, and thus, paywalls are the only option. The first part of the argument is correct: the online ad market has almost entirely disappeared. Non-publishers don't quite understand how massively online advertising rates have declined -- whether it's due to greater and greater supply or Google and Facebook (the usual targets) sucking up all the ad revenue with their superior targeting.
But, just as a data point: ad revenue here at Techdirt is now on the order of about 5% of what it was six or seven years ago. Not down 5%. Down 95%. That... makes it impossible to survive if you're just supported by ads. Thankfully we're not tied solely to that revenue, though the decline certainly hurts (speaking of which: feel free to support us directly). At this point, we barely even consider ad revenue when we look at how the company makes money.
So, if you believe that there are only two revenue models for media: advertising or subscription, it's not hard to see how many publications are jumping over to the paywall (subscription) model. The problem is that just because one business model doesn't work, it doesn't mean that the other will.
The latest big name site to go behind a paywall is Bloomberg. It's unfortunate because they actually do pretty good reporting over there, and as Jay Rosen noted, Bloomberg has a tremendously successful "other" business model in providing its terminals and information to lots of businesses that rely on it. And Bloomberg, somewhat amazingly, has decided to aim high with its paywall, asking for $35/month, which seems significantly higher than most other paywalls. It's so high that Felix Salmon has argued that you should spend that money elsewhere, on smaller sites that need it more -- especially those not subsidized by things like terminals. Furthermore, he points out that Bloomberg is losing money elsewhere on its silly TV station, leading him to argue that this is really about subsidizing the flopped TV station by trying to set up a paywall on the internet side:
...the Bloomberg paywall feels much less justifiable than just about any other paywall. You’re not paying for the news you’re reading; instead, you’re paying for the television content you’re almost certainly not watching. Bloomberg LP might have some strategic interest in the television station, or it might serve some vanity purpose for Mike Bloomberg personally. But it feels wrong to ask for the TV station’s losses to be borne by readers of the website, very few of whom have any interest in its content, and all of whom have much less ability to pay for those losses than Mike Bloomberg does.
Besides, for anyone other than Mike Bloomberg, money is a zero-sum game: If you spend it one place, that means you have less of it to spend somewhere else. If you’re going to spend $420 a year on news, there are much more deserving places to spend it than Bloomberg. Paywalls are here to stay, and that’s almost certainly a good thing for the economics of the news industry as a whole. But a good paywall should pay for the journalism that its subscribers are reading, not for a broadcast folly that almost nobody watches.
Om Malik hits back that Salmon is wrong, and that plenty of people will subscribe to the Bloomberg paywall (often using business accounts), but then goes through a spot-on explanation for why paywalls won't work for most sites, including (importantly) the fact that most sites vastly overestimate (1) how large their audience really is and (2) how much people actually value their content.
And yet, I think the paywall craze which is sweeping the media herd will be a big reality check for the news and magazine publishers. So many of them are drinking their own spiked kool -aid. They will soon realize the size of their “real audience” and will soon realize that they don’t pass the “value for money” threshold. There are very few publications that have a feeling of must-reads and must-haves.
This is an important point, and one we've tried to make a few times in the past, highlighting that all of the metrics you hear about concerning audience side are complete bullshit, but everyone in the ecosystem has strong incentives to keep up the charade. At least they do while they're pitching advertisers. When the actual hard subscription numbers come down, it can be a real wake up call. I'm reminded, of course, of the newspaper Newsday that implemented a paywall with great fanfare... and three months later had a grand total of 35 subscribers. Thirty. Five.
And they were hardly the only one. We've written time after time after time after time of paywalls failing for newspapers, and actually doing a lot more overall harm in terms of reducing both audience and influence.
So the idea that paywalls are somehow inevitable seems foolish. That's not to say that advertising is the answer -- because clearly, it is not. But we do need to start considering more carefully thought out business models for news that go beyond merely putting up paywalls are hoping the advertising market comes back. Again: a paywall can work in certain unique circumstances. But it tends to be highly differentiated news publications with strong, loyal audiences. But, of course, most sites have spent the past decade or so pissing off loyal audiences with ever more intrusive ads, blocking adblockers and watering down the journalism. It's hard to see how those kinds of publications have any realistic path to remaining solvent.
All of that, of course, is just focusing on the media side of the equation. But as many in the media are fond of reminding everyone, having a strong free press is often critical to having a knowledgeable and educated democracy. Indeed, that's quite frequently the argument people make to try to guilt you into paying for news. Without it, the argument goes, democracy itself is weakened. But... if we take that argument to be true, then there's a similar argument that paywalls are similarly bad for democracy, as Buzzfeed's Jonah Peretti argued last year. Indeed, Heather Bryant recently made a similar point on Twitter, noting, in effect, that by putting up paywalls, we continue to feed information to a wealthy elite, while leaving everyone else out.
Fixing journalism to serve those for whom journalism is not necessarily broken—those already with the means and capacity to aquire and consume quality reporting—is not the same thing as saving journalism.
— Heather Bryant (@HBCompass) May 5, 2018
We talked about this a bit in our recent podcast responding to people who have been arguing that free social media is somehow "bad" by pointing out that it's fairly incredible that anyone could look at the wealth of information, knowledge and connectivity created by the internet and argue that it's somehow bad that people can access so much, so easily. It feels extraordinarily elitist to say "well, just pay for it," when a large number of people literally cannot -- or even if they could, could only pay for one or maybe two source of news (which, inevitably will default to some of the most well known players).
There's no doubt that there are all sorts of problems in the journalism world these days. Unfortunately, it doesn't feel like rushing to a paywall is a serious attempt to solve any of them.
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Filed Under: advertising, journalism, paywalls, subscriptions
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https://www.kickstarter.com/projects/mmasnick/cia-collect-it-all
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It's not that ads are 5% of their current revenue, but that the ad revenue they have now is 5% of what it was in the past. No word on that paragraph if the total revenue is still the same, so no way of extrapolating that broader comparison.
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The media is slanted enough as it is.
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You mean like reporters are working for the likes of Rupert Murdoch.
When multiple patrons donate small amounts via the likes of Patreon, they have less direct control than a newspaper editor. It becomes more a case of the reporter finding their own voice, and the audience that appreciates it.
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Paywalls & Newsites
The reason ads are detested are many and it is both the fault of the ad flingers and the sites for not controlling them and allowing them do interact to much with browsers. Fix the ads and you might see more ads displayed. Plus, ignore the hype about overly targeted ads as they are about as effective as a generic ad.
What some YouTubers are doing is using funding sources such as Patreon to get people to voluntarily pay a few bucks a month to keep the site going. Watch your costs carefully and you can have a viable site but you are probably not going to get rich.
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Re: Paywalls & Newsites
Except, who even pays attention to the site? I often open 10-20 news stories, each in a new tab. If 10 minutes later I find a tab called "Forbes Welcome" or whatever, I probably don't even remember which story it was for. If I do... well, am I going to waste 10 minutes getting a credit card, reading the associated legal agreements and privacy policies, setting up a password manager... instead of just going to one of the other open tabs? Certainly this one story isn't worth it, and if I'm not already a subscriber to the site, I'll never have read any other story making me think it's a worthwhile site—or maybe I did, but, looping around, will I remember which site it was from? Enough to say this is worth $x/month every month? In practice, all I remember is to never click on links to certain sites, because I won't get the promised story.
Nevermind that I don't want anyone tracking the stories I read.
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Re: Paywalls & Newsites
That is generally the problem for me. If I follow a link to, for example, the NYT it's because another site I'm reading is discussing something that was written there. I won't be trying to visit that site again until such time as I'm following a link in a similar fashion. While it's nice to view what the other site I'm reading is talking about directly, I'm not going to pay as I'm generally not going to read the NYT primarily.
That's the big problem with the sites on this issue - they all work from the presumption that people are choosing to go there as a primary source, not as a secondary, disposable one.
"Fix the ads and you might see more ads displayed"
Also true for the most part. People who use ad blockers do so because ads have become intrusive, annoying and worst of all a vector for malware. If your income needs to be derive from a shitty animation that autoplays sound, follows you around the screen and makes your computer unsafe, then that's a bad business model no matter how you define it.
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Re: Re: Paywalls & Newsites
At least, that's how it often starts ("straw that broke the camel's back"). Once people get used to ad-blockers, why would they ever disable them, even if ads become "less intrusive"?
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Re: Re: Re: Paywalls & Newsites
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Another downside to paywalls: political siloes
Most news sites have some level of political bias to their politics-related reporting. I accept that, and sometimes read sites whose reporters are clearly in conflict with my politics, just to get a sense of how "the other side" thinks about an issue. While I might be willing to pay some for quality journalism from a few sites, I'm almost certainly not going to pay for a subscription to a site that routinely tells me my opinions are "wrong." If I wanted a browbeating, I could get that for free from social media. I'm probably not alone in this, and if so, paywalls will just encourage people to read the sites that agree with them. That will further exacerbate political siloing.
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Re: Another downside to paywalls: political siloes
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Re: Re: Another downside to paywalls: political siloes
You're also really stupid if you think there's only 2 sides to any issue. Which is why it's important that every viewpoint is freely available and not locked behind doors to trap audiences into an echo chamber.
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Money?
When the big cable companies here in Canada tried to out-Netflix Netflix, as one radio commentator pair said:
"How many streaming services are you going to pay $10 a month for?"
"One".
Same with news. Lest the paywall sites forget, there are some sites that are mandated to be free - like BBC, NPR and counterparts CBC (Canada) and ABC (Australia) that are government supported and so less motivated to find alternate funding; as are many of the broadcasrt media who have a less impacted business model than print (so far). There are also news aggregators (like Drudge Report) that will happily collect and point readers to secondary free news sites.
I had contemplated if paywalling got too prevalent, what would I do? I would consider subscribing - but only one or two sites. Not my local paper, but something with extensive coverage, like the NYTimes or Economist (but they're pretty expensive). Or, cycle through my 4 iPads, 3 phones, 2 computers and 2 virtual PC's, and read my limit on each; for each of a dozen good news sites. I cannot imagine some local newspaper assuming they are so important to those who get their news online that they will pay significant money... especially when the majority of their news except a few local tidbits are simply recycle wire service stories.
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Paywalls means there's no competition
However considering the state of the mass media these days being both biased and pretty much construct the stories to fit whatever narrative they push, its not worth it. Add to that the thousands of competitors offering the same, independent news sites and thousands of news aggregators, why would I pay my hard earned money for some pretentious schmuck to tell me what somebody on twitter said about something in 280 characters?
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7 reasons this clickbait is behind a paywall.
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I subscribe to my local paper. But I don't log into the site. When I get a warning telling me I've run out of free articles, I clear my cookies. What's the point of logging in?
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What's the point of storing their cookies before hitting the limit?
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public libraries
My biggest complaint is having to pay $5 to view a magazine article from decades ago that I can read for free in the local public library's bookstack or microfilm/microfiche section. Libraries have a fantastic assortment of ways to access information using *old technology* (paper & microfilm) but are far behind --by decades-- in getting those same publications in digital form, presumably due to all the legal minefields.
Google can throw down the gauntlet at publishers because of its size but your local library can't afford to get into a legal dispute with publishers over digital access rights. This is keeping public libraries locked out of the 21st century, and in time, perhaps turning them into museums as digital publishing takes over.
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Re: public libraries
Libraries do have reasonably powerful groups that could throw down a gauntlet—and note that the Librarian of Congress gets to make DMCA exceptions. Sadly, a lot of libraries have been jumping into DRM-based platforms for "lending" digital books, rather than pointing out the absurdity of this.
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Re: public libraries
Of course we all know the answer to that question -- because publishers have armies of lawyers to keep that sort of thing from ever happening.
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Ads ...
***
Like ninja, on insider chat, I'm at the point of ignoring ads, and especially hate when they follow me around the internet post-purchase of whatever one-time-thing it was I bought.
The one site where I might buy from an advertiser, the ads are on-topic to the site, and, I believe, vetted by the site's owner. That vetting has been lost for most sites...the ad cost some tiny fraction of a penny per impression, so it is in reach of basically anyone.
In fact, most times i want to purchase something specific, I start with search...and yes, that means Google is sucking up all the available revenue if I don't already have a good idea where to purchase it.
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SO, their choice between "give away / get 0" and small income?
NOR is Google / Facebook! Simply aren't going to be *allowed* monopolies over search / advertising / speech outlets.
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Re: SO, their choice between "give away / get 0" and small income?
A small income is better than no income at all.
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"on the order of about 5% of what it was six or seven years ago"
So enjoy your FIVE percent, Masnick. That's about your actual appeal to general populace: my views aren't at all remarkable on most sites.
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Re: "on the order of about 5% of what it was six or seven years ago"
What is remarkable, however, is how you keep returning to a site you hate so you can gloat out of spite whenever you “win” (read: when the facts can be read in a way that bolsters your argument). When did rage and hatred and all-around anger take over your life such that you let yourself be consumed by your spite for Techdirt to a point where you have committed yourself to a years-long trolling effort that has accomplished nothing but making you look like an asshole?
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Re: Re: "on the order of about 5% of what it was six or seven years ago"
He's literally taking an aside about how this site has successfully managed to remain a going concern without demanding that this idiot pay a fee to post here, and he's convinced himself this means that it's a failure and he's "won". It's a story about succeeding by not depending on ads, and he thinks that lack of ads means something in that context.
It's not the rage, hatred, obsession, childishness, lack of civility, etc., that makes this particular mental case so interesting. It's that with all of that he can't understand the most basic facts of what he's raging against.
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Re: "on the order of about 5% of what it was six or seven years ago"
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Re: "on the order of about 5% of what it was six or seven years ago"
Yes, your views are not remarkable. Rather inane they are.
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No Fee News
Just read your news on NoFeeNews.com...
Its a news aggregator that links to paywall-free alternatives to all the top stories. The top stories are covered by more than just one source, and most sources still have no paywalls.
I get all my news there and it's awesome because I usually never have to worry about paywalls
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the same news on every wire
If even one of the multiple sites pulling news from the same wire lets you read for free, why pay to read it again on the others?
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Non-publishers don't quite understand how massively online advertising rates have declined -- whether it's due to greater and greater supply or Google and Facebook (the usual targets) sucking up all the ad revenue with their superior targeting.
I read this line from the previous paragraph as indicating that ad revenue has declined so much in large part because the payouts from ads have shrunk enormously for whatever reason.
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Journalists don't understand their own business model
If you translate this to today's situation it is easy to see how this goes wrong. The news papers were still trying to get the largest number of eyeballs assuming that would deliver the biggest payments. This has resulted in everybody trying to have the news faster, join every craze or meme that was available and by delivering the shallowest news possible as long as you are first, fact checking be damned. Reminiscent of old-timey paper boys shouting on the street.
Currently eyeballs are very plentiful and cheap for advertisers. So that model brings diminishing returns. The solution is to either bring very targeted eyeballs or make news that people actually want to pay for, so something they can't find anywhere else.
I think all the old names will die since they seem unable to adapt. Out of the ashes will rise the new winners. What that will look like is open for debate but Patronage seems like a viable model, perhaps combined with a more traditional agent model that does the managing of the journalists if they're not capable themselves.
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I don't get it.....
For 200+ years news was behind paywalls - i.e., subscriptions for newspapers & magazines. And this was never seen as detrimental to liberty. A Free Press doesn't mean that the information has to be free of charge.
Initially the internet wasn't completely free either, and then things exploded in the late 1990s, and overhype of new business models that relied entirely on advertising.
As the dust has settled a bit the world has realized that all that advertising doesn't have as much value as the advertisers originally thought they would, and they have pulled back on their investment in that media model.
The result may be that we swing back to a model where we have to subscribe to our favorite periodicals once again. That will most likely cause many businesses to exit the market as they can't be sustained in that business model.
Frankly, that's probably not a bad thing because the explosion actually gave everybody with any sort of wacky ideas a widely accessible, public forum to support their nuttiness. And businesses like Google allowed others to find those forums. That situation wasn't exactly conducive to real liberty because so much false narrative is available that people have a hard time determining what's real.
Sure, it's great to be able to exercise our inalienable rights and actually have an audience, and to get paid for exercising that right, but what we're seeing is really a market correction.
It's possible that these business models are just not sustainable, and we're seeing that in this new shift.
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Re: I don't get it.....
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Re: Re: I don't get it.....
The nearly total loss of control that advertisers had over where their ads appeared didn't help either.
So we'll swing back to fewer channels available, and advertisers being more choosy about which ones they support (or link with).
One upside (hopefully) is the elimination of click-bait linking. Those folks will need to find real jobs somewhere.
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Re: I don't get it.....
The idea behind news being free is paper less society. We were promised the web would allow us to be a paper less society and make it cheaper then paying dozens of workers to print materials.
Now it seems the opposite has occurred. Not sure where we went wrong though one thing the switch to phones only makes it hard for creativity and we now have ass ugly graphics to match the low powered phones.
On a computer it is awful and it makes keyboards not work right as you will find skipping letters and stuff whichoffline doesn't happen. The reason for that is phones don't have a keyboard.
I am not sure what it's called but it's not a keyboard. One person said they have to use their pinky to do it. I'm like WTF? I took typing classes and learned also on Mavis Beacon. Now all that is thrown out the window. With phones there is no 'home row' technique or centering yourself.etc.
I feel sorry for today's kids as phones are just apps NOT software. Software is LOTS of code often unique to that product. Apps coding is generally universal so the next set of developers can keep it updated though often dumb it down for the next set of bozos.
Minecraft on Windows 98 is an APP as it's simple to do once you know how to do it. Doesn't take a team of rocket engineers to handle. Now the Kerbal Space Program on Steam now THAT'S a challenge even Triple AAA teams wouldn't dare touch for liability reasons.
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How to lose me from your audience...
Paywalls when I was sent to the article by a Google news link, and may never visit that particular news site again.
2.a. Sites that use ad services that don't vet their ads and try to serve me malware or unwanted NSFW ads. That's ALL 3rd party ad services besides Google, btw. Sites that serve ads themselves seem to do a better job of vetting them (e.g., WOWHead.com).
3.a. Sites that use anti-ad-blockers and present messages whining that I am a selfish, evil thief for not wanting to expose my computer to their badly-vetted ad malware. Guess what? I don't give a flying fuck--your financial mismanagement issues do not give you the right to control what my computer downloads. Insulting me on top of interfering with my browser functionality and trying to install malware on my computer? I hope you go bankrupt, asshole.
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Re: How to lose me from your audience...
However, as this all shakes out - meaning as the business models change due to the economics of the situation - we may be back to having to subscribe to sources that we trust/believe in/support, as we used to do with newspapers, magazines, etc. There will obviously likely be more options available due to Internet-based distribution channels.
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Re: How to lose me from your audience...
Wikia has anti-adblockers? I don't recall even seeing ads there.
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Re: How to lose me from your audience...
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When it's just one pay wall that's no problem. When the whole web becomes paywall (which it pretty much is) then it IS a problem as most people do not keep track or have a hard time. You can easily get into the hundreds of pounds just in news services alone. Again I can understaind paywall for entertainment but not critical news.
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Some information like roads and weather articles should always remain free as it can determine life and death. "Entertainment" articles I can see being paid that don't impact roadways or infrastructure.
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I'm not paying for news. If there is an emergency or warning ( boil your water, gas leak, meteor strike, whatever ) I mean if it's important i expect to be notified for free.
If it's Kim K stuff or sport, fair enough, pay for it if you find it interesting.
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They're all failing and got merged
They are all failing and it's because of the massive buyouts in the late 90s/00s. There were laws limiting how many TV stations you could own and radio stations. Bill Clinton did away with all that in 1997. Bloomberg in particular is VERY left wing and people have had it with the hate Trump bandwagon. The TRUMP RALLIES are JAMMED PACKED! They were on the same day the media said his ratings were somewhere in the (30s). Their words not mine.
So now with a failing TV Station as their BS is called out they have to catch up and reshuffle but they don't realize the core of their problem.
The biggest news media mergers happened under Bush we lost what little independent news we had. 90 percent is owned by USA Today so if you go to a news site chances are it has the same exact look because it's owned by that and Gannett Company (If I spelled that right).
Statesman Journal used to be independent but bought out all the local town papers so are tied to it and then after that was subsidized by USA Today so now they all shake hands.
This is dangerous back door monopolies and they don't bother to try and compete so you don't really have a choice just an illusion. This is NOT capitalism anymore. I am not even sure what to call it but it definitely isn't capitalism.
Trump tried to stop this crap but eventually caved in like the rest. He has to look into his own mirror first. Frankly I wanted Ben Carson having the world's best brain surgeon being well respected we wouldn't be in a crap storm right now. He knows how to do the poker game better then Trump.
Trump just does what he knows how to do which is egg people on like as other people described "poking at a hornets nest" to get them to react and expose themselves.
He knows what they will all say. NONE of this is a surprise to him.
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