Nov 20, 2012

Who would pay for the news paywall?

Paywall discussion has really got off in Finland when today our largest newspaper Helsingin Sanomat started a paywall on their site. It's a loose paywall, with offers 5 weekly views if you hit the site directly, if you come there via Facebook or Twitter it is always available. In addition there's already published many different ways to go round the paywall on other ways.

I don't think it matters whether breaking the paywall is easy or hard, it will always be the minority who go round the paywalls anyway. There are many different kind of paywalls out there, but in this blog post, I'm discussing about the free visits per time type of paywalls.

What wonders me the most in paywalls is, that what is the target group for those? It can not be the casual users, since they do get to see the content anyways and prices are much too high to pay for a few articles the don't. Also it can't be the active social media users, since they get their news from free sources or know how to go round the paywalls easily. So it must be the most loyal customers who are already paying for the printed news. That's how you reward your customers.

The first big paywall of NY Times have been recorded as success, but there's dark clouds on top of its success story. NYT stock price dived with 3Q results when it was notified that ad revenues had dropped substantially. Also there's a doubt out there that many of the users of paid service have received huge discounts for the service. The default price is 15$ for month, but according to some stories there has been huge discounts all the time available and the actual prices have been closer to 1$ per month. There's no real evidence on either price. And then, let's be honest, NYT is a special kind of news house in the world. There's only couple of that big and famous who really has the capacity and the brand to produce such a unique stuff that people would be willing to pay for.

The word about our local paywall debate. Helsingin Sanomat offers free access to their content via Facebook and Twitter. That means that basically only the people who actually go to their site for news are the ones who are affected. Not to be rude, but it is only the loyal and stupid user who will end up paying for the service. Maybe I'm a special kind of web wanderer, but I rarely hit for any sites for news. I rely on news feed services and social media to gather the information for me.

In the long run I believe sites with paywalls will lose their customer bases. The main question then is, that can the paying customers fill the gap in lost ad revenue. I don't believe so, but I'm not the one who have estimated the business case for these ones.

People certainly are willing to pay for media. People have learned to pay for sport and movie channels. People pay for music and books still after digitalization. Paying for media content as such is not the problem. The experience is. How an website could be good enough experience to be paid for. Books, magazines and newspapers have the physical experience with them. Music and video will evoke feelings in everyone. So what is the experience daily news could awake? Maybe the tabs will save the news industry?

My bet is that visits per time based paywalls will not be viable solution in the long run for the daily news. It might be for really specific niche areas that any other medias are not reporting at. Default for the web is free, to pay for, there must be really excellent experiences available. For now I haven't seen any with news services.

Written by +Henri Hämäläinen

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