Financial Times Looks To Put Its Blogs Behind Paywalls Too

from the missing-the-point dept

In talking about the recent decision by Rupert Murdoch to lock up the entire website of The Times behind a paywall, we noted that one of its editors, Danny Finkelstein, claimed he was still going to post links to stories at The Times on his Twitter account, even though people wouldn't be able to read them without paying. We pointed out that, in our experience, even linking to registration required sites annoyed the hell out of people, and Finkelstein might want to think twice about engaging in social media by sending people to a paywall. Finkestein responded with a bit of snark:

First, I won't be tweeting stories that followers can't read. I will be tweeting stories that followers have to pay for if they wish to read. That is an entirely different thing.

It's not that different. Most people won't pay, so the vast majority of people who follow your links are going to get frustrated. It's not a good consumer experience at all -- especially when you're talking about using Twitter or other social media platforms where sharing and link passing are encouraged.

Apparently, folks over in the UK aren't quite getting that message. Felix Salmon notes that the Financial Times, who has one of the more annoying paywalls out there is now putting its blogs behind a paywall too. Salmon rightly questions this idea:

The move makes sense in a kind of tyranny-of-consistency way: the FT.com site believes that paywalls are the way to go, Money Supply is on the FT.com site, therefore Money Supply must be behind the paywall. But beyond that, it's silly.

For one thing, the best reason for newspapers to put a paywall around their website is to support the circulation of the print product, where readers are much more lucrative in terms of both subscription and advertising revenue. Newspapers with free websites fear that their print readers will desert the newspaper for the online product, and they put up paywalls to make that decision less attractive.

Blogs are a great way for a newspaper to add online value for their print subscribers: they can put nichey content like wonky posts on central banking online, without using up precious newsprint. But the FT doesn’t give online access to its print subscribers: that's a key difference between the FT paywall and the one being proposed by the NYT. And print subscribers understandably don’t particularly want to pay twice for the same content. So their relationship with the FT will necessarily weaken when they lose access to the blog content.

But that's the thing about both the Times and the FT's view of things. It's never been about "adding online value" at all. It's been about stamping your feet and declaring "we are valuable, now pay us." Unfortunately for them, that's not how the world works.

Salmon goes on to explain how this will totally take certain FT blogs out of the conversation. It's a key point. What makes blogs work so well is that they usually are not the same as a traditional journalistic reporting platform. They're not designed to just report the news and move on. The blogging ecosystem tends to be about discussion and conversation, with blogs linking to each other, building off what each other said and continuing the conversation and the debate. But walling it off takes away from all that. That's why we've already seen at least one blogger from The Times bail out from the paper and move his blog elsewhere. I wouldn't be surprised to see FT bloggers do the same. Putting a paywall on blogs is the equivalent of putting a paywall on a conversation... And, speaking of that, I'd be remiss if I didn't mention our conversational paywall t-shirt, which is getting mighty close to selling out:

Filed Under: blogs, conversations, journalism, paywalls
Companies: financial times

Because One Paywall Sorta Worked Very Briefly Many Years Ago, Free Is A Joke

from the interesting-theories dept

Pickle Monger points us to this hilarious and uninformed piece by Sean Coughlan, at the BBC, which talks up the brilliance of paywalls and mocks the "digital hippies" who believe in free. Amusing, of course, that he's writing this for a free online publication. Damn digital hippy. Coughlan uses a single anecdote to prove paywalls work. Apparently, back in 1997, he worked for Rupert Murdoch and a digital group that, very briefly, offered a fee-based service for The Times (which is now going under its new paywall). And some people paid. That's about all the details we get. There's no indication of how many people paid. There's no indication of how much they paid. There's no indication of how much the service cost to run. There's no indication of what the competitive landscape was at the time. But because a few people sent in checks (ok, it was the UK, so "cheques"), paywalls are a brilliant success, and those damn digital hippies (you know, the ones who understand basic economics like supply and demand and marginal cost and price) ruined it all.

To support his position, he found an equally uninformed journalism (not economics) professor named Tim Luckhurst, who used to be an editor at a newspaper:

"It was an entirely irrational decision. We were wrong," says Tim Luckhurst, now professor of journalism at the University of Kent and former editor of the Scotsman. He is referring to the struggle to replace subscription revenue with that created by advertising. "It was a huge mistake. But we were all guilty of believing in the myth," he says.

Except, of course, as has been pointed out time and time again, subscription revenue has never paid for content. It's hasn't even covered the cost of materials and delivery in your average newspaper. The content has always been paid for by advertising, and you increase your advertising by increasing your viewership. The real mistake by newspapers wasn't that they didn't put up a paywall at the beginning, but that they didn't do much to actually engage their community. They just took their static newspapers and moved them online. But they didn't realize that they had always been in the business of selling the attention of their local community to advertisers. The problem was that in the online world, that local community had other options, and newspapers failed to do much to keep them.

This is one aspect that I expect we'll explore at the Techdirt Saves* Journalism event -- not just business models and what works, but actually engaging your community (and that means more than just putting up a comment form).

Filed Under: evidence, journalism, paywalls

The Economist Warns That Newspapers Putting Up Paywalls May Create Newspaper 'Pirates'

from the well,-duh dept

The Economist has become really sharp on the sorts of issues we talk about here these days lately. Just this year alone, it's published articles on how the patent system is broken and hindering innovation, and how copyright law is broken, and has little to do with its intended purpose. Recently, it also highlighted a study showing the problems with gene patents. Not bad. And, now, as a few of you have sent over, it's warning the newspaper industry that it would likely be a mistake to put up paywalls, because it will create a new breed of "newspaper pirates." Most of the article is about "TV piracy," which the magazine appears somewhat indifferent about -- noting that it's not really a big problem, since TV is designed to get people hooked on watching future episodes, so free and easily available shows probably isn't a huge deal.

However, the final paragraph notes a warning to newspaper paywalls (and to television folks who think that charging for shows online makes sense):

In this sense the pertinent parallel is not with music or films but with newspapers and magazines. These days print piracy is a trivial issue, since most general news articles are given away free. If newspapers and magazines begin charging people to read their output, the pirates are likely to turn up, and quickly.

Of course, it's not clear whoever wrote that piece talked about it with the management at The Economist, since last year they decided to bring back something of a paywall for its own content.

Filed Under: newspapers, paywalls, piracy

As Murdoch Puts Times Online Behind A Paywall, Competitors Happily Plan To Stay Free

from the good-luck,-rupert dept

As Rupert Murdoch is getting ready to put paywalls on two of his UK publications, The Times of London and The Sunday Times, his competitors are remaining adamantly free online. The Guardian, for example, has been a loud and proud supporter of free content, and now the Daily Mail Online is standing by its free online site by noting:

"A pay-wall MIGHT make a little money -- we will make a lot."

The management of the paper explained that people don't pay for news -- they've paid for the convenience of paper, but that online news will likely remain free -- and that they're big enough to make advertising pay well. In fact, it seems likely that if Murdoch locks up his content behind a paywall, that will only drive more readers to sites like The Daily Mail and The Guardian and boost their ad revenue...

Filed Under: paywalls, rupert murdoch

How Engaging Is An Open Public Discussion If It Costs $20 To Enter?

from the civic-square dept

There's been a lot of attention paid to Pierre Omidyar's attempt to build a new kind of local news organization in Hawaii. Omidyar, of course, was the founder of eBay, and many of the early comments about the project made it sound like a "new" type of news organization that really was very much about making the community a part of the process -- something that we've pointed out makes a lot of sense. Omidyar also brought in John Temple, the former editor, president and publisher of the (failed) Rocky Mountain News -- who had been quite introspective in recognizing why RMN failed. So it seemed like the new project, originally called Peer News, had a good basis.

But the details are coming out, and they seem... odd. Apparently, the newly named "Honolulu Civil Beat," which is supposed to be more like the discussion found in a "civic square" thinks it can charge people $19.99 per month to take part. That's quite a steep entrance fee to a "civic square." I thought part of the value of the civic square was its openness.

Even worse, Temple (who clearly knows better) is trotting out the old school media's most tired excuse for why paywalls will work: claiming that because the WSJ has done it, others can as well:

"People are paying on the Web for (publications such as) The Wall Street Journal; it has established value. ... We believe people will pay for content and experience that they value."

But that ignores why people pay for the Wall Street Journal, which is not just that "it has value," but that it has scarce value that helps people make money now. I don't recall similar information being covered in the normal civic square. In the meantime, I'm sure there are plenty of local community sites for Honolulu already. Why would people want to pay extra to join just one of them?

Filed Under: civic square, paywalls, pierre omidyar

Rupert Murdoch Doesn't Recognize That There's Competition Online

from the wow dept

People keep insisting that we're crazy to think that Rupert Murdoch is going down the wrong path with his paywall plans. I keep hearing from people saying "don't bet against Rupert -- he's the sharpest guy in the news business and he knows what he's doing." But I just can't see it. Not when he continues to say things that just aren't true. The latest, sent in by reader sinsi, involves yet another interview with Murdoch where he insists that once he puts up paywalls Google and Microsoft will be forced to stop linking to his stuff. Instead, he wants them to put up a subscription form:

"We'll be very happy if they just publish our headline or a sentence or two and that's followed by a subscription form,"

Ok, Rupert, how about you start? After all, we've pointed out that a ton of your own properties have news aggregators, and looking through them, not a single one appears to have subscription forms. Why not?

But, even more ridiculous, is his insistence that people will start paying:

"I think when they've got nowhere else to go they'll start paying,"

Not if but when. Recent profiles of Murdoch have suggested he doesn't use the web, so perhaps he doesn't realize it, but there's always somewhere else to go, and if News Corp. is so short-sighted to lock itself away from the open web, well that just opens up a much greater opportunity for his competitors to make sure they're the place to go.

Filed Under: paywalls, rupert murdoch
Companies: google, microsoft, news corp.

Murdoch Puts Up Some More Paywalls

from the adios dept

Last year there were rumors that two publications that Rupert Murdoch owned in the UK, The Times of London and The Sunday Times -- separate operations, but who share a website and a common owner -- would begin experimenting with a different sort of business model, which actually didn't sound too bad. Rather than charging for news, the rumor was that it would involve a "membership club," where people would be purchasing access to additional benefits -- which actually sounded like a CwF+RtB kind of plan. Of course, there weren't many details, and we wondered what the benefits would be, and if they'd be enough to make it worthwhile.

Unfortunately, the details look like the rumor was wrong, or the plans changed entirely, because now it looks like both publications are going with your standard everyday super expensive paywall. Starting in June, both publications will begin charging a whopping £1 per day or £2 per week for access -- which is actually pretty steep, especially in a market where there's an awful lot of competition. On a yearly basis, it's only a bit less than what Newsday is charging for its website -- which has been a colossal failure.

Good luck, Rupert, because it seems like you're going to need it. On the other hand, this might explain why the Times Online is already trying to block companies from sending them visitors. It's as if they don't want anyone to know they exist online.

Filed Under: paywalls, rupert murdoch, sunday times, times of london, uk

Wishful Thinking And Misinterpreting Surveys Won't Save The News Business

from the that's-not-enough dept

Renan Borelli points us to Atlantic Business staff editor Derek Thompson's recent defense of news paywalls, coming in the form of a series of posts responding to the Pew Research Center's State of the News Media report, and also to a January Harris poll of online adults and their news reading habits. Thompson argues that the numbers in the latter "weren't so bad", but his reasoning makes very little sense.

"43% of those surveyed read the newspaper [online or offline] regularly, and 23% said they were willing to pay a fee to continue reading. That means even before the dawning of the Age of the Paywall, more than 50% of regular newspaper readers said they would pay for online news. As for the other 60% of respondents: who cares? They're hardly reading newspapers online anyway."

This is a surprising attitude for a business expert, and one that would certainly be foreign to a newspaper publisher. 43% reading daily means a lot of room to grow volume and frequency of readership, especially when you consider that 72% said they read at least once a week, and 81% at least once a month. It would be foolish to disregard that audience. Besides, 50% (a shakily extrapolated estimate to begin with) is hardly a good reader retention rate, and Thompson ignores the clearest message of the survey: less than a quarter of online adults would consider paying a monthly fee for news, and only four per cent said they would pay more than $10. Moreover, "how much would you pay" surveys are notoriously unreliable.

Thompson also makes the curious argument that people have demonstrated their willingness to pay for news online by paying for internet access to reach that news. This is irrelevant and confuses value with price: yes, by making online news one of the reasons they pay for internet access, people have shown that they value it. But this demand doesn't set a price, it creates a market—one that is highly competitive on the supply side and will always offer free alternatives. The simple fact that a market exists does not say anything about the best pricing strategy within it.

These poorly thought out arguments come from the first post, which Thompson admits was rushed because he wanted his "opening salvo to get out fresh and early". The second post looks at the Pew report's breakdown of online ad spending by format, which shows the expected dominance of search advertising, followed by display ads—where newspapers get most of their online revenue—in a distant second place.

Based on this, Thompson seems to take it as granted that advertising can never pay the bills for online news, so paywalls and "other exciting ideas" are the future. He makes no mention of increased spending overall or growth in the display ad sector, of news gaining a foothold in other ad categories, of increasing the efficacy and value of advertising, or of going after brand new markets—all missed opportunities on the road to a walled garden.

In his third post, which discusses some of the "other exciting ideas" mentioned in the Pew report, Thompson finally starts to make a bit of sense. He is skeptical of micropayments, seems ambivalent about microaccounting (basically micropayments billed monthly), and he scoffs along with everyone else at the idea of blocking Google. Conversely, he is enthusiastic about improving targeted ads and curious about the possibility of newspapers gathering more demographic information from their online readerships. Unfortunately, he still seems to think that WSJ-style paywall models are the best strategy for the immediate future.

Perhaps the most common mistake that paywall supporters make is forgetting that people haven't paid for the news in 180 years. Newspaper readers used to pay for paper, ink, trucks and delivery boys—and often barely paid enough to cover that bill. Now they pay for internet connections instead. Then and now, the reader only pays for access—advertising always has and will continue to pay for everything else.

Filed Under: content, journalism, news, paywalls

Cablevision Buying Blogs... Will It Lock Them Up Behind A Paywall Too?

from the strategery dept

While Cablevision may be fairly innovative in delivering broadband services, its foray into the content business has been a bit of a disaster. As you may recall, Cablevision bought the local newspaper, Newsday, two years ago. Going in to the deal, the company admitted that it didn't know much about the business, but planned to talk to newspaper experts. As we noted at the time, that seemed like a bad idea, because it was "newspaper experts" who were driving newspapers into the ground. True to form, Cablevision decided the best thing to do with Newsday was to spend $4 million redesigning and putting up a paywall that drove away some writers and convinced 35 people to sign up in its first three months. Yes, 35. Of course, Cablevision insisted that the goal was really about reducing churn by offering the newspaper website to Cablevision cable TV and broadband subscribers, but it still seems like a pretty big failure all around.

So it's a bit surprising to hear that Cablevision is apparently trying to expand in the content business by buying the blog network Gothamist, which has a series of city-focused local blogs. The deal is relatively cheap, but it makes you wonder what Cablevision is planning to do with that content. First of all, most of the blogs in the network cover cities where Cablevision has no presence at all. The only exception is Gothamist itself, which focuses on New York City -- even as Cablevision is more focused on neighboring Long Island. Is Cablevision now going to put up a paywall around the blogs to?

On the whole, it looks like Cablevision is just confused about the online content business, and buying some blogs doesn't seem likely to clear that up any time soon.

Filed Under: blogs, gothamist, paywalls
Companies: cablevision

Truncated RSS Is A Bad Business Decision

from the respect-your-audience dept

A few years back, I wrote about why we had found full text RSS feeds to be much more powerful and useful than truncated RSS feeds. The reason that many sites push truncated feeds is the belief that it will force people to click through, and the ads on the webpage are worth a lot more than the ads found in RSS feeds. But it's a short-sighted view. Because what it's really doing is trying to push readers to do something that they don't want to do. Many of them use RSS readers because it's a more convenient way to organize and read the news they want. And, we found that by making life easier for our readers, we were able to get a lot more readers, and then that allowed us to put in place a better business model that didn't rely on trying to trick or force them to click through. This is the same debate as the debate over ad blockers. It's a question of whether or not you respect your community and want to add value for them, or if you just view them as dollar signs and feel you need to force or guilt them into doing stuff they don't want.

The full text vs. partial text debate is flaring up again as Gawker Media has just shifted all its blogs to partial feed blogs. From my standpoint, this makes it significantly less likely that I'll link to them, because I'm less likely to actually read through their posts to see if they're worthwhile. I'll stay subscribed, but whereas in the past I might read through an entire post before deciding it was worth writing about, now I'll only have a snippet to make that decision -- and that makes it that much less likely that I'll find their posts worth linking to. And that seems like a mistake.

Matt McAllister from The Guardian responded to Felix Salmon's blog post (the one linked above), and noted that when The Guardian moved to full text RSS feeds they saw their web traffic go up significantly. Admittedly, there may be other factors involved here, but it's yet another data point in favor of being open and making it easier for your audience and your community to engage.

What I think both this and the whole ad blocking discussion come down to is a question of how different sites look at and treat their audiences. If they feel they need to take a short-term view and "monetize" every interaction with them, or if they realize that there's a long-term value in building up a strong and loyal relationship. It's also quite similar to the constant debates over the music industry -- where the music industry feels that it wants to get paid pennies every time you hear a song. That's the short-term "we have to monetize every use" view, compared to the longer term view, which recognizes that free songs and building up a relationship between the fans and the musicians can lead to something much more lucrative that benefits everyone.

But the key point is made by Salmon in his blog post about this. Others like to accuse Salmon and myself of supporting things like full text RSS feeds, letting people use ad blockers and being against paywalls as "a sense of entitlement." Of course, since I'm on the publishing side of things, I don't see how that actually applies to me since I'm defending the rights of the community of readers over short-sited publisher decisions. But the real reason why we think these (well, for RSS and paywalls -- I don't know Salmon's view on ad blocking) things are important to understand is that taking the simplistic view of trying to maximize short-term monetization is a bad business decision in the long term:

At heart, my argument for full RSS feeds is similar to my argument against a NYT paywall, and neither argument has anything to do with a sense of entitlement on my part. Instead, both are simply bad business decisions. If you truncate your RSS feeds, you'll get less traffic than you had with full feeds, and you'll alienate an important minority of your audience. And if you implement a paywall, the increase in subscription revenues will fail to offset the decrease in ad revenues, even as you'll alienate lots of your audience. So neither makes commercial sense.

Exactly. All of these are decisions that don't take into account the bigger picture or understand the overall dynamic of a community. They assume that each transaction is a single impact: if this user doesn't "pay" a site now, it's "lost revenue." But it doesn't take into account that that user might "pay" in other means -- via a comment or by passing it along to others. And what if that individual is influential and passes it on to a lot of people? It blocking off that possibility because that individual doesn't "pay" by ad or paywall seems incredibly short sighted and quite disrespectful of a community.

Filed Under: ad blocking, business models, community, long term view, paywalls, respect, rss