Like waiting for the ball to drop on New Year’s Eve, avid bloggers, journalists and online news junkies counted down earlier this year to 2 p.m., March 28.
At that designated hour, The New York Times erected the second paywall of the paper’s digital history, effectively ushering in what Advertising Age has dubbed "The Year of the Paywall."
Then again, The Economist said the same thing about 2010, but maybe the magazine was just jumping the gun.
Paywalls prevent online users from freely accessing a website’s content, requiring a paid subscription fee in order cross the virtual threshold — not unlike buying a magazine from a newsstand or dropping a lump sum for regular delivery.
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Rather than shooing people away until they meet the monetary demand up front, there’s more than one way to build a paywall, as the Times has demonstrated.
From 2005 to 2007, it blocked non-paying customers from reading its most popular opinion columns, while its newest iteration is a metered system that allows visitors to view up to 20 articles per month for free, and after that they have to pony up.
In fact, the term “paywall” has become a dirty word in the industry due to its money-grubbing reputation. These days, sites prefer to charge “freemiums” and offer “bundles” of paid content, such as an iPad app plus articles.
Metro daily Dallas Morning News put up a paywall a few weeks before the New York Times, and a number of smaller dailies are also poised to start charging for their online content later this year.
Given the size of the New York Times and the amount of traffic it attracts, the outcome of its paywall venture is being seen as a sort of industry-wide litmus test of whether print publications can get people to pay for their Web content.
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At the first Hackers Conference in 1984, futurist Steve Brand famously said that “information wants to be free,” and the music industry that’s been shrink-wrapped from illegal downloading and file sharing can certainly attest to the Internet’s spendthrift tendencies.
Yet, the New York Times and other media choosing to charge for their premium online content bank on the other half of Brand’s quote that’s often forgotten: “… information wants to be expensive, because it's so valuable. The right information in the right place just changes your life.”
Despite Internet users’ tendency to hop around having to pay for what it wants, they’re also willing to pull out their wallets when the content is worth it.
The big paywall question for print publications is whether their articles, slideshows and other features will make that cut.
A 2010 survey from the Pew Internet and American Life Project found that 65 percent of online consumers “paid to access or download” digital content, including music, software, apps and news content with the average person spending $10 per month.
Breaking down the stats isn’t necessarily encouraging for print organizations grappling to bridge the digital divide since only 18 percent reported paying for “digital newspaper, magazine, or journal articles or reports."
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With the Times charging $15 per month plus smartphone access, $20 for added iPad access and $35 for computer, smartphone and iPad, it’s clearly striking a premium price point – but one that publisher Arthur Sulzberger insists is necessary to boost revenue where traditional online advertising won’t pay the bills.
At the same time, other publications’ paywalls don’t all spell doom for the Times’ venture. The Wall Street Journal has charged for full article access since 1997 and hasn’t folded from traffic drops. Also, when Michigan’s Intelligencer Journal-Lancaster New Era daily began charging $1.99 per month for online obituary access, site traffic actually increased.
But almost as soon at the Times paywall went live, techies were already figuring out ways to code and keystroke around the block. Linking to articles from Twitter, Facebook and Google also doesn’t count against the 20-article limit, so the paywall isn’t exactly an iron gate.
In that case, ethical quandaries of whether or not users should pay for Web content might become moot if everyone can eventually sneak inside anyway. Just ask the record business.