One Pixel at a Time – The Paywalls Are Being Built

Made Essential Reading on 19 March 2010 Lee Lomas

On January 12th this year, the online version of the Standard-Times in Massachusetts (www.southcoasttoday.com) became the foundation layer of the News Corporation paywall that will continue to be built through 2010. A paywall is literally a screen that blocks your access to web content unless you have paid and have a subscription code to enter. In the case of the Standard-Times, anyone who does not already subscribe to the print version of the newspaper will need to pay $3.37 per week to get their fix of local news, town politics and high school sports reports.

The move on a small circulation paper in the Eastern US is highly significant as it is just the start point for News Corp and in the UK their major titles, The Times and The Sun, are destined to follow.

A few publications have made a success of this model, one of the most prominent being the Financial Times. Rob Grimshaw, the managing director of FT.com is bullish “Publishers should have more balls …they can produce compelling products online which people will pay for.” The FT has been charging for content since 2002, allowing online viewers to read just a few articles each month before requiring payment. The model appears to be working for them as they claim that revenues from digital subscribers rose by over 30% in 2009 and that they expect to make more in 2010 from the sales of content (including the print version) than from advertising.

However, the FT is a specialist publication – a ‘heavyweight’ news provider with a strong City slant. Are the UK population ready to pay for general news content, even from the ‘qualities’, when we have been used to having access to it for free? A small, recent study by Lightspeed Research of 2,000 UK consumers suggests not – with 91% suggesting that they would be unwilling to pay for online news content.

We want it – but we don’t want to pay for it! Or do we consider that we have already paid for it by paying for our broadband or mobile data connection? I pay for cable television and don’t need to pay again to view the news once I turn the TV on. Also, I am not limited to one version of the news on TV – I can choose from a range of channels, each giving me a slightly different slant. A subscription potentially limits me to a single provider.

So do we expect journalists to work for nothing? Obviously not. How should news be charged for? I don’t have a clear answer for that either. With blogs such as this, everyone has the chance to be a journalist but the major publications still have the majority of high quality writers under their wing. That talent pool costs money and the search is on for a method of maintaining revenue streams to pay for it.

Clearly something has to change. In 2009 our 5 largest regional newspaper groups saw in excess of £509 Million wiped off their revenue leading to around 5,000 redundancies. They need to find a model that works for them if they are to continue. That model is out there and is probably a combination of paid for and free content.

Leading us to that changed model may cause the publishers some short term pain but, if they can convince us of its worth, then they may well find a new lease of life and secure their future.