Lock Up Your Content... And Have All The Traffic Go To Your Competitors

from the it's-how-it-works dept

Kevin Stapp writes in to highlight a simple fact that has been discussed time and time again: that if a newspaper locks up its content behind a paywall, it will lose a ton of traffic beyond just the regular readers who refuse to pay, because the sites that send you links (and traffic and new readers) will simply point elsewhere. As an example, Kevin points out that with Slashdot's post about Craigslist suing Henry McMaster, it initially had a paywall-blocked WSJ link... but quickly added a free link from another news source. This is a key point that old school newspaper folks keep forgetting. They think that their job is to deliver the news, and the readers' job is to read the news. But that's not the way it works anymore. These days, the community helps spread the news -- and by making that more difficult, you decrease your value to everyone, and make it more difficult for readers to help spread the news and promote your paper's coverage.

Filed Under: competition, content, journalism, paywall

Media Dinosaurs Look To Set Up iTunes For News

from the haven't-we-seen-this-before? dept

Well, there they go again. Three big "media" names, who have been trying to convince themselves that there are enough people out there clamoring for someone to give them a way to pay for news, have decided to put together a company that will do just that. Stephen Brill, L. Gordon Crovitz and Leo Hindery Jr. have teamed up to create a system to charge for news, with the idea that any newspaper can sign up and use their system. Clay Shirky calls this an RIAA for news, while Mathew Ingram points out that it may be more accurate to call it an iTunes for news.

The problem, of course, is that this is all based on the faulty theory that people want an iTunes for news. This, of course, is great for other newspapers who know better, and decide to skip out on this plan, and get all the traffic that these newspapers give up. As Jeff Jarvis points out, in looking for news about this very venture, he was blocked by the paywall at some sites, and found the best coverage at a free site.

And, of course, it's especially ironic that Stephen Brill is behind this. That's because he's tried this before and it failed. Miserably. Meanwhile, Hindery in the past has shown that he also is one of those guys who tends to overvalue content and undervalue everything else people do online (communicate, share, discuss). This whole model is based on this single faulty assumption: that it's the news itself that's important to people. It's not. The news is important, but people want to be able to share the news, spread the news and discuss the news -- and you can't do that when it's behind a paywall. The very act of putting up a paywall diminishes the value of the content.

Still, it's a great opportunity for competitors of any newspaper short-sighted enough to sign up for this program.

Filed Under: l. gordon crovitz, leo hindery, media, news, paid content, paywall, stephen brill

Newsday Decides To Charge For Online News...

from the good-luck-with-that dept

I grew up reading Newsday, a newspaper covering some of New York City and its suburbs. In fact, when I was 11 years old, that was my first job: delivering Newsday to neighborhood homes. When various newspapers first started to go online, I tried to visit Newsday pretty often, but it put up an annoying registration wall early on, and I found plenty of other, better sources of news. The quality of reporting in Newsday already paled in comparison to many other newspapers, so it just wasn't worth the hassle -- even once it removed the registration wall. I almost never visit the website any more -- though, occasionally I check the sports pages there. Last year, Cablevision bought Newsday, and today, along with announcing it was writing down a huge chunk of that purchase, said that it's going to start charging for access to Newsday online, making it that much less likely that anyone will care enough to visit Newsday's website. The major area news is much better covered by the other newspapers, and various "hyperlocal" websites are popping up all over the place to cover the local specifics. Deciding to charge for Newsday online is basically a death sentence for the paper.

By the way, if you want more evidence of how badly Newsday is at handling the relevant news: at the time I'm writing this, you can't find news of this pretty big change on Newsday's site at all. Instead, I'm relying on a Reuters report. That tells you pretty much all you need to know about Newsday's ability to keep its website relevant. Why pay for worse news when others give you a better product for free?

Filed Under: business models, newspaper, paywall
Companies: cablevision, newsday

Associated Press Considers Locking Up Its Online Content

from the hello,-opportunity dept

You can almost hear Reuters, CNN, UPI and a few others laugh maniacally over the news that the Associated Press is considering locking up its content. The Associated Press has a pretty long history of not having much of a grasp about how the economics of information works online, and this is the latest evidence. It wouldn't happen for a while -- because many online sites, including Google, have deals with the AP to present its content online for free. But, if the AP suddenly forced all partners to lock up their content, a couple of things would happen pretty quickly: other sources, such as those listed above, or new startups, would quickly jump into the void, thrilled that their largest "competitor" dropped out of the space. Yes, the AP is slightly different than those other players, in that it's a collective of newspapers sharing content, rather than a truly separate operation -- but functionally, they serve similar purposes. CNN, in particular, has made it clear that it would like to take on the AP with a wire service -- and having the AP lock up its content would make much easier for them.

Also, I know we point this out every time some clueless news exec claims that users need to pay, but it's worth mentioning again: nowhere do they discuss why people should want to pay. Nowhere do they explain what extra value they're adding that will make people pay. Instead, they think that if they put up a paywall, people will magically pay -- even though the paywall itself is what takes away much of the value by making it harder for people to do what they want with the news: to spread it, to comment on it, to participate in the story. Until newspaper execs figure this out, they're only going to keep making things worse.

Filed Under: content, paywall
Companies: associated press

Howard Stern Learns: Going Behind A Paywall Is A Good Way To Lose Influence

from the the-price-of-influence dept

We've talked for years about the danger any media makes in focusing on setting up a paywall. In an age where openness and the ability to get others to spread and promote the content for you is often a key barometer of success, locking yourself up behind a paywall takes you out of the wider conversation, and by its very nature, decreases your overall ability to influence. The LA Times has an article noticing that this seems to be exactly what's happened with Howard Stern, who famously made the jump from terrestrial radio to satellite radio -- and in doing so, appears to have lost a large percentage of his audience, and with it much of his influence. Of course, he was paid handsomely for doing so, but Sirius almost certainly expected Stern to bring a larger percentage of his audience with him. Yet, as the article notes, Stern's waning influence due to the switch means that even he's having trouble getting the level of celebrity that he used to command to even bother coming on his show. Amusingly, the article also notes that the very reason why Stern claimed he was moving to satellite -- his troubles with the FCC -- may be contributing to his lack of influence with the new show. In the past, every time Stern got in trouble with the FCC, it boosted ratings, giving him plenty of free publicity. Without that foil, he loses much of the free publicity. Such is life behind the paywall, apparently.

Filed Under: howard stern, influence, paywall
Companies: sirius, xm

Dear Newspapers: Locking Up Archives Shrinks Your Business

from the let's-try-this-again dept

Plenty of folks have pointed this out for years, but newspapers that try to lock up their back archives and charge for viewing those articles are very likely hurting their bottom line more than helping it. That's because those archives are a treasure trove of info that people would be interested in finding via a search engine -- but they almost never want to pay for it. For many years, the NY Times tried locking up its archives and charging to read stories, but eventually did the math and realized it made a lot more sense to put all its archives online for free, and make money off the ads. Since removing the barriers, the NY Times has seen its traffic spike significantly, and its archives have become a significant portion of the overall site's traffic.

However, some newspapers still can't see the forest for the trees, and think that the answer is to charge high prices to view old articles. That most likely just gets people to look elsewhere, and diminishes ad revenue as well. Parker Mason has written an open letter to the Toronto Globe & Mail decrying its continued practice of charging $5 for access to a single archived article (for just 30 days of access). It's a good read, and I'm guessing that folks like Mathew Ingram, who works at The Globe, have been pushing for changes to the paper's policy, but until then, the company seems to be hurting itself. Mason's letter is well worth reading, but here's a snippet:

But then you go and do something like trying to charge me $4.95 for a newspaper article that I've already paid for and read, and this hurts me (telling me that this content will only be available for 30 days only adds insult to injury).

Your greatest asset is the thousands and thousands of pages of information and news stories that you have in your archives. People want to view this content, and just as they have endured advertising in your print publications, they'll endure the same kind of advertising on your website.

I understand your thinking when it comes to locking up this content behind a pay wall: it is valuable information, so people will pay to see it.

The problem is, you are only half-right. It is valuable information, but only when it is easy to access. In the age of Google, people will quickly move on and find the information elsewhere, somewhere where it easier to get at.

Filed Under: archives, newspapers, paywall

TechDaily Is The Latest Paywall Casualty

from the too-expensive dept

Here at Techdirt, we've been paywall skeptics for a long time, and the last year has given us a lot of examples to support that view, as company after company has dropped their paywalls. Jim Harper points us to the latest example of a failed paywall-based business model, although this one is a little sadder than the others we've covered: TechDaily, an in-depth tech news service for the inside-the-beltway crowd, has announced that it will close up shop early next year. TechDaily's paywall was a lot higher than the other paywalls we've seen fall this year: Jim Harper reports that a year's subscription could set you back more than a thousand bucks. In the late 1990s, that was worth the money to the well-compensated lobbyists who depended on it to stay abreast of the latest developments in the regulatory issues affecting their clients, but it appears that competition has intensified and TechDaily wasn't able to hold onto enough subscribers to stay in business. Jim switched to the dramatically cheaper (but still not free) Tech Law Journal long ago. And others may have concluded that they could get enough information from blogs and mainstream news sites that it wasn't worth the extra money for TechDaily's exclusive coverage. I suspect that the biggest weakness of TechDaily's business model was that it's extremely difficult to grow your subscriber base when you've got such a high paywall. Traffic growth on the web requires that you be part of the conversation, and a high paywall means that not only will ordinary readers not be able to read your stories, but a lot of bloggers (including me) won't either. Which means that even if you've got a great product (which by all accounts TechDaily did) very few people are going to find out about it, and even fewer will be willing to shell out the thousand bucks it costs to find out if it's worth the hype.

Filed Under: news, paywall
Companies: techdaily

Dow Jones Pours Cold Water On Murdoch's Free Journal Plans

from the he-said,-he-said dept

For months, we've been reporting on rumors that Rupert Murdoch is thinking about dropping the Wall Street Journal's paywall in the hopes of dramatically expanding the paper's readership. This week we've had the first direct confirmation of Murdoch's plans when he predicted at a shareholder meeting that dropping the Journal's paywall would expand the paper's online readership from a million readers to 10 or 15 million. But Dow Jones executive Michael Rooney rushed to pour cold water on Murdoch's comments, insisting that they would need to wait until after the sale closed before any decisions were made. He said he wanted to figure out how much revenue Dow Jones would lose before deciding whether to drop the paywall. Frankly, I think it's a good thing Murdoch will soon be in charge of the paper. Short-term revenues are far less important than the paper's long-term influence and visibility. Murdoch understands that continuing the paywall would virtually guarantee continued readership stagnation by keeping the Journal out of the online conversation. That would leave a huge opening for one of the Journal's competitors to establish itself as the leading online business news outlet. That's a far bigger threat to the paper's financial health than a short-term loss of subscription revenue. Murdoch has a long history of being willing to take temporary financial hits to build up successful and ultimately profitable media properties, and that shrewd business sense looks set to continue with his acquisition of Dow Jones.

Filed Under: paywall, rupert murdoch, wall street journal
Companies: dow jones, news corp

Yet Another Newspaper Paywall Dropped

from the not-too-many-left dept

Newspaper paywalls keep coming down. Just a month and a half after the NY Times dropped its paywall for TimesSelect, the Sacramento Bee is freeing its Capitol Alert service. This was actually a more interesting experiment. Launched in January of this year, it wasn't (like most paywalls) about taking content from the newspaper and hiding it behind walls, but creating a separate new service for political insiders. It was pricey, but the idea is that it would be worth it for folks like lobbying firms as it would be information that wasn't available elsewhere. Apparently, though, not enough people really were interested in paying -- especially compared to the prospect of increasing online ad revenues. So, Capitol Alert is ditching the paywall and going ad supported as of next week.

Filed Under: business models, newspapers, paywall
Companies: sacramento bee

Financial Times Frees Some Of Its Content, Sort Of

from the set-it-free dept

Earlier this summer, we suggested that the Financial Times could beat the Wall Street Journal to the punch by differentiating itself by freeing up its content. Now that the WSJ is expected to remove its paywall, Financial Times has announced that it would remove the paywall for its online content by allowing casual readers free access up to 30 articles for free each month. First time visitors to FT are rewarded with freely available content. After five articles, registration is required, and then after 30, access is cut off. So, according to Pavlov, the Financial Times wants to discourage heavy users of its content by making it more difficult to use the more that they use it -- not exactly a good business move.

So, sure, the FT has a loyal subscriber base today, but the current paywall model does not encourage growth. By offering all of their content for free, they can grow their reader base into avid readers, a percent of which can then be converted to subscribers. By no means should they give up on subscriber revenue; they just need to give subscribers a good reason to pay. FT already offers access to tomorrow's paper as a benefit to subscribing -- this is a good example of a premium good. Give subscribers more of these types of benefits: from custom reports to events and conferences, and they will continue to be loyal paying customers. As we've said time and time again, "free" is a vital part of an online media business model and not something to be feared, but rather, it should be embraced.

Filed Under: paywall
Companies: financial times