The case for a paywall for Irish newspapers

There's a huge elephant in our industry's room. It's getting bigger and bigger every week. By the end of 2010, it'll be a woolly mammoth on steroids. It is the issue of publishing newspaper content free online.

Don't get me wrong: this is the system I instinctively prefer. I love the idea of freedom of information (I blog and Tweet, for example). And I have long believed that there can be a way of making it work, commercially. To date, however, the world's newspapers have not found out what that method is. Instead, they all publish their newspapers online every day, for free. And guess what? Now that everyone has broadband, their circulations are falling.

It doesn't take a rocket scientist to figure out why.

Recently, Rupert Murdoch has kickstarted the debate of 'free' v 'paywall' by declaring that he would try and take a number of his newspapers' sites into a paywall. This includes the Times, Sun and New York Post.

The reason he's on about this is twofold. First, his newspapers' circulation is suffering. Second, the only paper he has that uses a paywall -- The Wall Street Journal -- makes good money from it. As a result, it's in relatively good financial health.

His logic is compelling: why should he sit back and watch his newspapers crumble because the industry convention is to give the stories away free on his own websites?

Sooner or later, the same issues will surface in the Irish newspaper industry. Because Ireland is traditionally behind most of the western world in tech stuff and online adoption (including broadband), it hasn't been a huge issue up to now. But now, most people in Ireland have access to broadband. And they're reading newspapers online.

And why shouldn't they? Only a moron would pay for something that's easily available free, right? They don't even have to wait until they get home, either: most new mobile phones are very competent at browsing the web.

So sooner or later we're going to have face this question, folks: if we as an industry cannot make money out of free-to-access websites -- and no-one in the world seems to be managing it -- we're going to have to consider an alternative. That almost certainly means a paywall.

I don't relish this happening. But if the choice is a continuous decline in circulation figures or a paywall, it's not really that tough a choice. I mean, ask yourself: what would you do?

Comments

[Gerard Brandon]

Adrian there is a co-relation between the Newspaper physical and online world and the telecom/mobile and VoIP sector. Rupert Murdoch could make it work from a marketing perspective provided he manages to encourage readers to continue to visit the websites for more than Login & Password.

Just as we have blogs that provide teasers to the content before "Read More...." it is essential to allow readers to see what they could get if they subscribe. He may have the right idea but banning the likes of Google and Bing from searching is a form of protectionism and if globalization has taught us anything it is that such behaviour leads to isolation and extinction.

Already making a similar mistake are telecom operators where they continue to block VoIP services on their networks. As recent US FCC rulings show they are merely postponing the inevitable where 50% of their $692 billion revenues are under threat with WiMax and Wi-Fi now that it is possible to deliver 3G Video using data tariffs. Google have bought Gizmo last week and Skype have more than 405 million users, bigger than any telecom company in the developed world.

It is wise to be inclusive and partner with search engines for quality news coverage and charge for good content just as much as it is imperative for the mobile industry to engage with providers of Video and VoIP services to manage, rather than ignore the elephant before they become the extinct mammoth.

[David]

I had a subscription to the Irish Times and was happy to pay it- it was around a euro or 1.50 per week. Then they decided to make it all freely available and I got a refund- which I was not expecting and did not really understand tbh.

Giving stuff away for free is not a sustainable business model.

[Twenty Major]

Giving stuff away for free is not a sustainable business model.

That's the bottom line though, isn't it?

But people have such an expectation of freeness on the web that they baulk at paying reasonable prices.

€1.50 a week for the Irish Times is brilliant value when you put it against buying the paper every day. Yet people won't pay it. The same people, however, won't think twice about blowing €100 on booze in one night. It's weird. I know football fans that won't pay €3 a month to subscribe to the TV channel of their favourite team because they think €3 a month online is like €300 a month or something. Ask them to throw €3 for a lottery ticket or something and there'd be no hassle.

The longer people get used to free the more difficult it's going to be to do anything about it.

[Don Speekingleesh]

"they all publish their newspapers online every day, for free. And guess what? Now that everyone has broadband, their circulations are falling."

This is the mistake the industry is making. Circulation is not falling because people are reading on-line for nothing, but because they can get their news on-line from other sources, because they can play their PSP on the train instead of the crossword and so on. There's a whole world out there and newspapers are becoming less relevant. And until they realise this the problems will only get worse.
My interests are motor-racing, science and tech, and coverage in daily paper is mostly abasmal - the only sports that get much coverage is football and GAA, science coverage is shameful, and mostly lies and puff surveys released by PR companies. Tech isn't too bad, but is still covered so much better by specialist websites.

The papers don't make much money selling to the reader - the money is in advertising, and paywalls will only drive advertising down. Which is only going to make the industries problems worse.

[Ruairi]

Rupe's guys, imho, are doing some audience data number crunching. And it appears to have a chance, not least because search engine traffic commands no premium at all, yet seems to require the content gates be left wide open.

(Quote below from Steven Brill’s keynote speech at the last online publishing and marketing OMMA conference, via mondaynote.com. His firm is working to be an authentication provider to groups of sites.)

http://journalismonline.com/html/brillspeech061709.pdf

"We have devised a model — based on my partner Gordon’s experience with the Wall Street Journal and the experience of other smaller newspapers that went against the tide early on — that says that through all
kinds of free sampling methods you can maintain 88% of your page views and more than 90% of your ad revenues at the same time that you begin generating millions in online payments for content."

[Adrian]

Thanks a million for the comments.

That is a fascintating analysis by Brill, Ruairi.

Twenty, I think you're dead right. I mean, I have to say I do like the free model. And maybe there's still some way of making it pay. But yeah, €1.50 is hardly exorbitant for six newspaper editions.

Don, I take your point about coverage of issues you're interested in. But what you're saying is that you've little interest whether it's free or not. That's kind of a different issue to this one; I don't believe that circulation is falling because of non-coverage of certain topics.

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