A thoughtful reader has taken issue with my last post, which argued that paywalls are a poor solution to the newspaper industry’s twin troubles of declining circulation and declining revenue. You can read his defense of paywalls in his well-written blog here.
Meanwhile I’ll take another stab at making the case against them. But before I begin let me articulate two beliefs I share with paywall advocates:
- Journalists and editors create great value for society and play a vital role in a well-functioning democracy.
- Many readers value content enough to pay for it. Indeed, that is the norm in print, and, while less common, there are oft-cited examples online as well (e.g. WSJ.com and FT.com).
On to the disagreement. Paywall advocates put a great deal of stock in a seemingly common-sense economic argument: quality content is valued, therefore it will be purchased if not freely available. This analysis is incomplete.
First, the fact that a product is valued and can attract a paying audience is no guarantee that it will be purchased at prices and quantities sufficient to cover the costs of its production and distribution, to say nothing of the provision of an economic return to the providers of its capital. The recent fate of The Seattle Post-Intelligencer is an apt if unfortunate case study: still unprofitable at last report despite having laid off 90% of its journalists.
Second, and more importantly, paywalls send exactly the wrong message to the industry.
They say, “the problem with our industry is that we are insufficiently expensive, not insufficiently valuable.”
This is insanity. For 400 years newspapers have provided their readers with a one-size-fits-all information product whose content was selected by an editor based on some weighting of what the editor felt his audience needed to know and what he thought the larger pluralities within it might enjoy. But today, unlike the first 380 years of industry history, I have myriad alternatives to get at the content I enjoy. And an increasing number of those alternatives are personalized to me, not some fictitious average of me and 200,000 other people; they include more of what I’m interested in than my newspaper does (an RSS feed on voting reforms, for example) and – importantly – less of what I don’t (I don’t have to navigate around obituaries or Paris Hilton on my Flipboard app or my personalized Yahoo! home page). In other words, if I invest my limited discretionary time in a personalized news medium I will get a much better return on my attention than with today’s newspaper, online or in print.
The rational, if challenging, response to these wonderful new competitors is to improve the return on attention that the newspaper offers by offering personalized content along with the editor’s choices. As I’ve argued before, the print edition is a feature, not a bug, of the newspaper experience. Google, Yahoo!, Facebook, Flipboard, etc will never compete with us to put a hunk of paper in a reader’s driveway – we monopolize that channel. That is an enviable position that we need to leverage by re-imagining what’s possible in print. Variable Data Printing and QR Codes are transformative technologies that have already changed whole industries, but have yet to be embraced by newspapers.
They will be adopted eventually, but paywalls, like other urgency-sapping placebos, serve only to distract from this urgently needed transformation while generating – at best – trivially small incremental revenues (and at worst an evisceration of the paper’s online readership).
I believe firmly that the newspaper industry will be in a much better place in five years, but it will be because they made themselves more valuable, not more expensive.