My Theory: The Paywall Fight Isn’t About Paywalls

Ah yes, nothing like a little incendiary piece at the Columbia Journalism Review calling paywall foes “freehadists” to get under their skins. Please oh please, may we have a Bleeding Kansas-style scrum among the punditry over paywalls every time a major news organization has a leadership change?

Having watched this fight for a while and read a lot of what’s been written by supporters and opponents of paywalls, I’d offer up this attempt at psychoanalysis: The opposition to paywalls on news websites has less to do with the merit of paywalls as a business strategy and much more to do with their being perceived as a symbol of newspapers’ former refusal to innovate. Look for it in the language. There’s plenty of evidence there.

Case in point, see Steve Buttry’s comment on the CJR piece:

Only newspapers, unable to think beyond their traditional subscription model, are pursuing paywalls to any notable degree. — Steve Buttry, comment No. 5 on the “freehadist” piece

Or, see Mathew Ingram’s response to the CJR piece, in which he writes:

Will charging people for the news help? It seems to have for some newspapers, although not for others. But that doesn’t mean we should give up looking for other solutions as well — and one of my main criticisms of media outlets with paywalls is that they seem to lose interest in pursuing other potential strategies.

Or how about this from Howard Owens:

Most of the paywall advocates I see and read around the Web are the same people in the late 1990s who proclaimed the Web to be a fad. They’re the same people who throughout my online newspaper career didn’t want to break news online, didn’t want to carry a video camera, didn’t want to feature current local news on the homepage, didn’t want to engage with online readers—they pretty much either worked actively or passively to sabotage every attempt at online innovation.

This same group of people are the ones who, even before the Digital Age, stood around the water coolers and decried the “bean counters” (I know, I used to be one of them, in every respect).

But paywalls are nothing but a bean-counter strategy to slow the bleeding.

A paywall is reactionary. It represents a mindset that says there’s nothing wrong with our journalism or our business approach. It is also an admission of failure at building a real online news business.

From that perspective, the worst-case scenario isn’t that paywalls will fail. If they fail, news organizations will ditch them and have to try something else. The worst-case scenario is that they will somehow succeed and restore the free-flowing revenue stream, and then news companies will be content again to sit back in their complacency and count their money instead of trying new things.

I can understand that concern, but here’s the problem with it: “Paywalls kill motivation to innovate” is an outdated view that has no place in any intelligent discussion about the merits of paywalls. Are newsrooms now hotbeds of innovation. No, not all of them. But the notion that a successful paywall now will squash innovation just doesn’t make sense. For one thing, as has been shown and as the paywall opponents themselves have repeatedly pointed out, paywalls are no panacea. If the New York Times’ paywall can’t solve all its financial woes, are any newspapers installing a paywall seriously counting on it to magically solve all theirs?

Second, where’s the evidence that paywalls kill innovation? The New York Times has the most publicized and successful of the recent wave of paywalls, yet as far as I know, they haven’t pulled the plug on NYTLabs. And perhaps it’s telling that in Ingram’s piece, his link for the snippet “and one of my main criticisms of media outlets with paywalls is that they seem to lose interest in pursuing other potential strategies” goes to another of his blog posts that offers zero example of newspapers that have recently erected paywalls and proceeded to kill off its innovations (I’ve commented on his post asking him for examples).

My view: Any newspaper that doesn’t innovate after installing a paywall wasn’t innovating before. There is no “killing off” of innovation with the arrival of a paywall.

If “paywalls kill innovation” was just another claim poorly supported by fact, I’d pay it little mind. However, the more insidious threat from this misnomer is that it equates paywalls with a return to the days when newspapers refused to embrace the need for change, the kind of days that many of the paywall opponents fought hard against (and should be commended for doing so), the kind of days that’s starting to pass due in no small part to financial necessity, the kind of days the people who fought the war for innovation never want to see return again. That, I think, is why we can’t have an intelligent discussion about paywalls as a business strategy right now. Too many people are still fighting old wars. When many of these people argue against paywalls, I get the distinct impression that they’re arguing against something much bigger.

That blurring of the distinction between paywalls as a strategy and paywalls as a symbol is bad, bad, bad. If not for it, I think (or at least dare to hope) intelligent, well-educated, experienced journalists and journalism observers would be less prone to fallacies like deriding the New York Times’ paywall as “barely keeping pace with the decline in print revenues” while remaining unskeptical apologists for another strategy that couldn’t keep its practitioner out of bankruptcy. Really, guys? Really? C’mon, we deserve better media criticism than this.

I think the days when most newspapers still think they can go on with business as usual are long gone. They know they need new revenue streams. Paywalls are one such potential stream, and it needs to be viewed and evaluated as such, rather than as an embodiment of past failings. Ingram suggests that we should be able to have a discussion about paywalls without having it turn into a religious war. For that to happen, we need to first leave behind the battles of yesteryear. Otherwise every one of these discussions will just end up being a bout of PTSD.

UPDATE

Be sure to see the great discussion Steve Buttry initiated in the comments below.

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8 Comments

  1. Really? The paywall discussion has moved from Ryan Chittum's name-calling and metaphor-straining to your amateur psychoanalysis? How about a discussion of actual issues? That's what I did here: http://stevebuttry.wordpress.com/2012/12/05/dont-

  2. Thanks for stopping by, Steve. I did read your piece, and I agree with a lot of it. I thought CJR's declaration that the paywall issue is settled was silly and likely a hyperbole to stir up strong reactions (which it did).

    You're absolutely right in your post that paywalls will be subject to disruption, even if they work. BUT, name one successful business strategy that isn't subject to disruption. To me, that's not an argument to not do something. It's an argument to remain constantly vigilant, and I don't see a paywall as inherently counter to that. Maybe that's the main divergence in our opinions.

    You're right that nothing the NYT does can be reasonably extrapolated to most other newspapers. I've always thought the same thing as well. But also consider that the mantra in the months leading up to the Times' metered system was "It won't work." Now, the mantra is "Fine, it seems like it may be working, but it won't work for anybody else." What will we be chanting next year? What I draw from it is that in the end, you just have to try something (with an informed strategy) to see if'd work. Clay Shirky did say this is the time for experiments, no?

    You say you won't call the NYT paywall a success until its business starts growing rather than cutting. Fine. I have no problem with that. All I ask is that media doers and observers apply that same standard in assessing all strategies, including the so-called "forward-looking" ones. From what I've seen, that's not happening, or at least not enough.

    Finally, I'll pose the same question to you as I posed to Mathew Ingram: I'd like to see examples of paywalls killing off innovation, where a newspaper was innovating before, then put in a paywall, and has lost the will to try other things. I'm not aware of any examples, which is why I think papers that put in a paywall and think they're done innovating weren't innovating to begin with, so there's no innovation to kill off there. But if you show me some good examples, I'll say something I haven't seen anybody else in this discussion say: I was wrong about that.

  3. Thanks for your thoughtful response, John. Given that, I'll apologize (a bit) for my response for your initial post. (For myself at least, your psychoanalysis was entirely off-base, but I might have written a silly post myself a time or two.)

    My reply to your final question is simple: I never said that paywalls kill off innovation. But paywalls require resources, attention and priority. And the New York Times and every other paywall-focused newspaper company have not poured the resources, attention and priority into developing new digital revenue streams that they have poured into trying to make the subscription model of print work somehow, somewhere online. Not even 1 percent. The other innovations are tiny little skunk works or pet projects that get a little encouragement, not driving corporate priorities. I'll turn your question back on you: Can you cite one example, just one, of a newspaper company pouring similar resources, attention and priority into development of a revenue source that's not ads or subs?

  4. One more thing: My response to the Times is not "Fine, it seems like it may be working, but it won't work for anybody else." I actually said initially that the Times had a better shot at this than anyone else. The Times' uniqueness is undeniable. But I don't say that it seems like the Times paywall may be working. I think it has hurt, for exactly the reasons cited above and for the reasons I cited on my blog. I think the net economic benefit for the Times has not been nearly as significant as the gross estimates we hear tossed around.

  5. Thanks Steve, and no apology, partial or otherwise, is necessary.

    The resources, attention, and priority for implementing paywalls are indeed big factors, which is why I say paywalls should be "evaluated" (as opposed to just implemented b/c it worked for this other guy) as a potential revenue stream like all other potential revenue streams. Every strategy takes resources away from another, so let's evaluate them all on their own merits, pick a mix, and adjust it as things progress. Paywalls may not be right for many, if not most, papers, just as, say, a newsroom cafe may not be right for many papers (e.g., their audience may be more McCafe than Starbucks).

    You asked: "Can you cite one example, just one, of a newspaper company pouring similar resources, attention and priority into development of a revenue source that's not ads or subs?"

    How about yours? :) Seriously, while I can point to projects here and there, no, I can't name a single newspaper company that's spending as much on a revenue source other than ads and subs. But those two are, after all, the two biggest digital revenue sources for media, newspapers or otherwise. So the fact that investment in non-ad, no-sub revenue streams has been limited is not surprising.

    Is it bad? I definitely think there needs to be more investment in this area, but how much more depends on how much potential revenue there is in those alternative sources. So the NYT (reportedly) spends $40 million to make/save $100 million (or whatever the real number is). To say whether that money would've been better spent on developing non-ad, non-sub revenue sources, we need to know whether there is $60 million of potential non-ad, non-sub revenue out there to be had. And I'm not qualified to say whether there is or not. Got any resources/research on that kind of info? (NOTE, edited to clean up typo).

  6. I don't have any resources/research on that kind of info, John. But I think we can agree that local search is a huge field, based on the money that Google is already making there. It's an ad source, but not a type of advertising newspapers have exploited well. I discussed that possibility in this post: http://stevebuttry.wordpress.com/2009/04/27/busin

    And direct transactions have been huge for Amazon, eBay and many other companies, but not for newspapers, also one I've discussed before: http://stevebuttry.wordpress.com/2009/04/27/c3-ne

    I think obits (and life stories and other types of commissioned content) have tremendous potential: http://stevebuttry.wordpress.com/2010/07/14/a-pos

  7. Thanks for the links, Steve. Those are ideas worth exploring.

    Hey, did we just have a debate about paywalls without it turning into a religious war?

  8. Let's see how slates membership program works, they rejected a metered paywall. Still, glad to see they are getting involved and realize the need to generate at least some online subscription revenue.

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