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    Pay wall or pain wall?

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    [By Alistair Fairweather]

    “Man was born free, and he is everywhere in chains.” Jean-Jacques Rousseau certainly wasn’t thinking about the Internet when he wrote those famous words in 1762, but they are increasingly appropriate.

    Last week The New York Times announced that it will begin charging people to view its website from 28 March. And so one of the Web’s great news titans has again succumbed to the allure of the pay wall.

    You can understand its motivation: revenues have been flat or in decline for a long while, and a website with nearly 50m monthly visitors is an expensive property to maintain. Unfortunately its strategy shows that its owners lack the courage of their convictions.

    In a bid to both sell its cake and eat it, The New York Times is only going to be charging its “most frequent users” — those people who view more than 20 articles per month. By doing so it hopes to keep its casual audience — which generates nearly a quarter of its revenue via advertising — while inducing its more committed audience to start paying.

    This is what’s known as a “soft” pay wall, as opposed to the “hard” barrier The Times of London instituted in June 2010, which requires you to pay before you read anything except their front page. The soft model may seem like a good idea — not only do you keep your audience, you also keep all that lovely traffic that search engines send you — but it’s fraught with problems.

    The first and most obvious ones are behavioural. If I currently read 25 or 30 New York Times pieces a month, will I feel inclined to pay? Not on your nelly. I will simply stop reading until next month. Eventually this will disincline me to visit their site or click on its links, since nothing is more irritating than being blocked from reading something interesting.

    Ah, but they’ve thought of this already. If you click on a link from a social media platform (like Twitter or Facebook), or from a search engine (like Google) then you’ll be able to read the article regardless of your limit, though they have specifically limited visits from Google to five per person per day.

    Which brings us to the second, even more intractable problem: the technical one. It’s just one week into testing the pay wall in Canada and already an enterprising Web developer has already released a way around the blockage. It’s simple, free and works (apparently) very well.

    Even when the Times closes this obvious loophole, others will soon emerge. Already it’s having to ask Twitter to shut down the accounts of people who are (automatically) tweeting everything published on The New York Times site. And these are just the first shots in what will become a running battle of an entire open Web of mischief makers against the limited resources of the Times‘ technical department.

    But the third problem is the most dangerous, and the least obvious. To remain relevant newspapers have to find new audiences. Look around the world and you’ll see the same trend — most young people do not read physical, printed newspapers. The Web has long been a way to reach new readers — both internationally and at home.

    In that sense the Web is like a shop front for your publication — a combination of publishing and international broadcasting that even a paper the size of the Times would not have been able to afford 20 years ago. The idea should be to convert these new readers to mediums where they are more accustomed to paying — like the emerging tablet and e-reader markets.

    So all that “free” content is actually great advertising for your brand. To restrict your shop front is to ensure that less and less young people discover you even exist, let alone have something useful to say. Sure, The Times of London seems to be making some headway with its hard pay wall, but how will it ever grow its audience when it doesn’t allow anyone to try before they buy?

    In the end it all comes down to the nature of the platform. The Web was born as an open platform, like free-to-air television. Imagine if CBS or e.tv decided to start charging to watch their programming. Besides the physical impracticalities (like distributing millions of decoders), it upends their entire business model and would trigger a mass exodus to their competitors.

    The only way you can get people to pay is to change both the platform and the content. The pay-TV revolution of the 1990s worked because it tempted customers with premium content and used new means of distribution (satellite and cable). At no point did TV executives imagine they could suddenly start charging for the same content they had previously given away for free.

    The owners of The New York Times clearly believe they are exchanging reach for yield — in other words their online audience will be smaller, but they will make considerably more money from each reader. But, given their wishy-washy approach, I suspect they will achieve neither of their aims.

    They should, instead, be concentrating harder on those platforms that do make them direct revenue, and on optimising their Web shop front to attract more youngsters. The one advantage they do have over the wild and woolly Web publishers is journalistic rigour and credibility.

    Newspapers, in the end, are about trust. This is why they will exist as institutions even after they stop physically printing their news — people want and need a trusted source of information. The economics of the industry should revolve around that, and not around the cold calculations of its accountants.



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