My personal take: 3 reasons I don’t like newspaper paywalls By Mathew Ingram

Posted on May 13, 2012

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We’ve written a lot at GigaOM about the rise of newspaper paywalls, a trend that seems to be accelerating as the financial health of the industry continues to deteriorate, and in particular I’ve written a number of posts about what I see as the downsides of paywalls. But the announcement this week that a paywall is coming to Canada’s national newspaper, The Globe and Mail — where I spent a large chunk of my career as a journalist — made me stop and think about my opposition to them in a more personal way than I have in a while.

Do I think that all paywalls or subscription plans are wrong? No. In fact, I am in favor of newspapers charging for access to specific kinds of value-added content or services. But when it comes to broad, general-interest paywalls around all of a newspaper’s content, I’m not in favor of them for a number of reasons.

The first reason is personal, and it’s connected directly to my experiences at the Globe, where I worked from 1994 to 2010 — because a paywall that the Globe erected in 2004 led directly to me becoming a blogger. Like the New York Times, which had a subscription plan called Times Select that lasted from 2005 until 2007, the Globe had a paywall around some of its content for several years before it was finally removed in 2008.

Paywalls restrict the flow of content, and that’s bad

I was a business columnist when the wall went up, and afterwards I started noticing that the number of visitors to my column had fallen dramatically. In fact, on average it looked like I was getting about 90 percent fewer readers than I had been before — almost exactly the same dropoff that the Times of London would see years later, when News Corp. instituted a paywall there. And as much as I wanted the Globe to make money so that it could continue to pay my salary, I didn’t like that at all.

As a writer, the thing I am most interested in is reaching as many people as possible with my writing, regardless of whether they pay for it directly or not. That’s one reason why I was so attracted to the Internet when I first discovered it, and to technologies like RSS. So I started a blog — partly as an experiment, but also as a way around the paywall, since columns were behind the wall but blogs were not (partly because no one really knew what a blog was at that point). Needless to say, I got addicted to the format.

Do I want my former colleagues at the Globe to lose their jobs? Of course not. I’d like to see the paper remain healthy and successful, but I don’t think paywalls are the answer — and I think focusing on them too much can distract a newspaper from doing the other things that are necessary to survive. And that leads me to reasons #2 and #3.

Paywalls are backward-looking, not forward-looking

The second reason I don’t like paywalls is that I think they are a step backward rather than a step forward — a “line of sandbags,” so to speak. Whether or not the newspapers that implement them are willing to admit it, one of the primary features of a paywall is that it keeps people in, not out. In other words, it makes it less likely that they will quit the paper and go digital completely, and thereby protects the printed newspaper.

That may be a smart move in order to stem the decline in ad revenue, but it isn’t even remotely forward-looking or adaptive. In other words, it does nothing to help a paper adapt to the web and to changing market conditions. As Clay Shirky has pointed out, the reality for newspapers is that the service they used to provide — in which they aggregated content from across a broad range of topics — isn’t really cutting it any more, when anyone can become an aggregator and advertisers are looking for more targeted audiences.

To me, it makes more sense to try and figure out how to take advantage of the Web in order to provide something that the current market is likely to value, instead of focusing on how to squeeze as much as possible out of a declining market. What is The Huffington Post doing right, or Buzzfeed, or Politico, or The Atlantic? Why don’t they need paywalls? Coming up with creative answers to those questions is likely to play a much larger role in the survival of traditional media entities than a paywall.

Maybe it’s trying a number of small things, as Ken Doctor wrote recently — like e-books drawn from the archives, or live events that cater to a specific crowd, or partnerships with online retailers for affiliate sales. Or maybe it’s the kind of “reverse paywall” that Jeff Jarvis and former Washington Post managing editor Raju Narisetti have talked about, where members get perks based on their interaction with a paper, rather than getting penalized for their loyalty by having to pay. In other words, a velvet rope instead of a wall.

Newspapers need to adapt, not retrench

The third reason I don’t like paywalls is that I don’t think they are going to work — and by “work,” I mean solve the problems that most newspapers are facing. Everyone seems to have decided the New York Times paywall is a success because it has about 400,000 subscribers and it is bringing in an estimated $35 million in revenue. But that is still a drop in the bucket: according to the paper’s recent results, one of the world’s most successful paywalls is not even making up for the continuing decline in print ad revenue.

And even if the New York Times can cut costs dramatically or boost its online ad revenue to fill that gap, what happens to other newspapers? Not everyone is going to be able to convince hundreds of thousands of readers to pay for their content. What happens to medium-sized or regional newspapers that don’t have the same brand name, or the ability to produce as much unique content as the Times or the Wall Street Journal? A paywall is just as likely to kill them off completely as to save them.

Are newspapers going to lay off staff and cut costs until they can manage to survive on subscription fees alone? If so, then they will effectively become small, controlled-circulation newsletters, catering to a tiny constituency. What about the broader ambitions that newspapers were supposed to have, about being a voice for truth, upholding the public interest? What happens to that mission with a paywall?

As web developer Stijn Debrouwere pointed out recently in an insightful post, newspapers are no longer just competing with other newspapers, or even with other traditional media — they are competing with things that don’t even look like journalism. In effect, they are competing with the entire internet. Is it better to try and adapt and meet that competition head-on, or to retreat behind a wall of sandbags and try to compel the waves to stop rising, King Canute-style? My vote is on the former.

Note: We’ll be discussing these kinds of media issues and more at paidContent 2012: At The Crossroads on May 23 in New York City. Register today.

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