Rupert Murdoch’s implementation of a paywall system on The Times news site has resulted in a 90% loss in online readership, while theFinancial Times has experiencedrecord online growth even with its paywall system in place. So, are paywalls a feasible way of generating revenue at a time when online advertising just isn’t coming to the party, or do they serve to alienate online readers who see the content they consume as interchangeable between various sites – and would rather change to a free site than have to pay for the same content somewhere else? On top of these questions, of course, come those involving the quality of journalism online and the need for this to be recognised, as well as the state of the current online advertising business model and the ramifications paywalls have for this.
But I’m getting ahead of myself here. To go back to the beginning, the debate around the feasibility of paywalls is an ongoing one, with people such as The Daily Maverick Deputy Editor, Philip de Wet, being dead against the idea, saying that he believes paywalls are only implemented by those who don’t understand online publishing, and as a result of the current online advertising model being broken, while GM for BDFM Digital, Bronwen Auret, argues that “We are willing to buy printed media, so why not online content?”
However, Elan Lohmann, General Manager of Avusa Media LIVE, cautions that consumers who aren’t used to paying for online content will find this a difficult concept to accept, and online publishers wishing to implement paywalls successfully will have the tricky task of ensuring their content is “exclusive; of high quality; and, most importantly, that there is a high demand for it.” Otherwise, they run the risk that their users will migrate to other sites that continue to offer content for free.
In terms of the perceived quality of journalism online, there is the thought that paying for content may work to improve this perception, because readers may feel they are paying for quality. Financial Times Chief Executive, John Ridding’s belief in the paywall approach also delves into the moral dimension. He draws on the views of Henry Luce, a co-founder of Time magazine, who is against the idea of publications relying solely on advertising revenue, because he feels a publication’s primary duty is to readers rather than advertisers.
However, IOL Editor, Rhys Johnstone, feels that while quality journalism is essential and certainly needs to be recognised, there is already a long list of free quality media, and in any case, looking at print media, the cover price that consumers pay does not go towards journalists’ salaries, but rather towards covering print and distribution costs, which are removed if the publication is online. Quality journalism should be a given regardless of whether the medium is paid for or not.
Lastly, looking at the implications for online advertising, Jeff Jarvis of BuzzMachinestates that “Rupert Murdoch has declared a surrender,” because by implementing paywalls, he is effectively saying he has no new ideas to build advertising. On the other hand, The Guardian’s David Mitchell says we shouldn’t be so quick to dismiss Murdoch’s paywalls, because if newspapers are to survive, they should be encouraged to try many business models. Tom Foremski adds that having a paywall doesn’t necessarily mean you have no advertising – you can have both. As such, Murdoch now has more to play with – he can experiment with creative pay wall ideas and creative advertising, and can work out what content goes behind the pay wall and what is free. If he succeeds in figuring out an online media business model, many others will benefit in adopting similar approaches.
A lot to think about, and I tend to agree with Tim Gentry, Head of Optimisation and Effectiveness at The Guardian, who believes “there isn’t one right or wrong path,” rather it’s about what works for different businesses.
What is your opinion of paywalls in online publishing? Share your thoughts below.