On Shirky and Brock on paywalls

The inital Times paywall figures are an early indication of a difficult future for general news publishers in the next phase of the digital media landscape.

As Clay Shirky puts it: “General-interest papers struggle to make paywalls work because it’s hard to raise prices in a commodity market. That’s the problem.” And it’s simple to say, just create unique, highly valuable content, but there is only so much potential in this, and the time, resource and technology required to get new ideas and new ways of publishing off the ground are beyond the realities for many current legacy news publishers, national and regional.

The actual subscriber figures for the Times’ digital offering behind a ‘Great Wall’ style paywall, once you equate the variety of platforms and payment plans, as Shirky ponders “monthly web subscribers could be under 10,000” can be taken in different ways, again Shirky offers:

As with every aspect of The Times’ paywall, interpretation of these numbers varies widely. There are people arguing that these numbers are good news; Robert Andrews at PaidContent sees hope in the Times now having recurring user revenues.* There are people arguing that they are bad news; Mike Masnick at TechDirt believes those revenues are unlikely to offset new customer acquition costs and the loss of advertising.*

Now the commodification of news is becoming a stark reality, Shirky:

The classic description of a commodity market uses milk. If you own the only cow for 50 miles, you can charge usurious rates, because no one can undercut you. If you own only one of a hundred such cows, though, then everyone can undercut you, so you can’t charge such rates.

Owning a newspaper used to be like owning the only cow, especially for regional papers. Even in urban markets, there was enough segmentation–the business paper, the tabloid, the alternative weekly–and high enough costs to keep competition at bay. No longer.

An all encompassing paywall, seems an extreme measure, as you attempt to charge for your digital product in the same was as you charged for the print version – you pay one fee for the whole package even though you probably only consume a few specific pieces of content and services:  “The advantage of paywalls is that they raise revenue from users. The disadvantages are that they reduce readership”.

More sophistication is needed both in the creation of digital content, the reworking of print content for digital platforms and most definitely in pricing structures and the where and how we pay. George Brock comments on Shirky’s piece, adding: I “hope that someone invents something more technically sophisticated which allows charging to be combined with better ways to seduce the reader into consuming the journalism. (Next experiment in that line: the New York Times).”


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