Articles

Paywall: Future or Folly?

In Uncategorized on November 18, 2010 by JP League

            A new trend among online newspapers is using paywall, which is where a potential reader would have to pay a fee to access the article or paper.

            This goes against the status quo of online media. James Rainey writes in the Los Angeles Times, “Many more people scoff at the mere notion they would cough up their credit card number for something the Internet has been delivering to them for free for more than a decade.”

            This appears to be at least some form of things to come. Rainey writes: “Newspaper publishers feel like they’re running out of other options. Pumping out professional reporting, photography, writing and editing can’t be sustained on a diet of notoriously dollar-lite Web advertising.” The lack of cost also hurts the previously stable income. “With their free websites, meanwhile, newspapers push battalions of readers away from their own print editions, which still bring in the lion’s share of the cash,” writes Rainey.

            News Corp. has embraced this strategy. Rainey writes: “News Corp. cut off content from its Times of London and Sunday Times four months ago, the audience to its websites plunged by two-thirds, to about 2.4 million. At the same time, the papers added about 105,000 paid customers online, about half via monthly subscriptions, the rest pay-as-they-read.”

            The drop in audience would seem like a bad sign. However, Alistair Fairweather writes in the Mail and Guardian Online: “That’s certainly not a disgrace, given that it only started charging in July. Each online user costs money — in bandwidth and computing capacity — and 105 000 readers are obviously a lot cheaper to serve than 20-million.”

            Some critics of paywall say that readers will stop reading those newspapers that have a paywall. Evan Britton writes on BusinessInsider.com, “the Web continues to head in a direction that doesn’t support a pay-to-read model.”

            A large portion of revenue comes from advertisements on their websites. Britton writes: “According to the Interactive Advertising Bureau, online advertisers spent $12.1 billion online during the first 6 months of 2010. That represents an 11.3 percent climb from the same time period in 2009.” This rise means that to attract more advertisers, newspapers would not want to drive away customers. Britton writes, “So, with more dollars being spent online, it’s in Web publisher’s interest to grow page views — not decrease them by 90 percent, which Thetimes.co.uk has done.”

            While the need to increase profits and look for the newspapers has led some to have a paywall, it does not mean that it is the best model for today. Fairweather writes, “That means the Times will need to expand its digital subscriber base by at least seven or eight times before it will be on par with what it was making from its old advertising-supported model.” A major problem would have to be solved be for a paywall would become standard. Rainey writes, “That means the Times will need to expand its digital subscriber base by at least seven or eight times before it will be on par with what it was making from its old advertising-supported model.”

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