Because One Paywall Sorta Worked Very Briefly Many Years Ago, Free Is A Joke

from the interesting-theories dept

Pickle Monger points us to this hilarious and uninformed piece by Sean Coughlan, at the BBC, which talks up the brilliance of paywalls and mocks the "digital hippies" who believe in free. Amusing, of course, that he's writing this for a free online publication. Damn digital hippy. Coughlan uses a single anecdote to prove paywalls work. Apparently, back in 1997, he worked for Rupert Murdoch and a digital group that, very briefly, offered a fee-based service for The Times (which is now going under its new paywall). And some people paid. That's about all the details we get. There's no indication of how many people paid. There's no indication of how much they paid. There's no indication of how much the service cost to run. There's no indication of what the competitive landscape was at the time. But because a few people sent in checks (ok, it was the UK, so "cheques"), paywalls are a brilliant success, and those damn digital hippies (you know, the ones who understand basic economics like supply and demand and marginal cost and price) ruined it all.

To support his position, he found an equally uninformed journalism (not economics) professor named Tim Luckhurst, who used to be an editor at a newspaper:
"It was an entirely irrational decision. We were wrong," says Tim Luckhurst, now professor of journalism at the University of Kent and former editor of the Scotsman. He is referring to the struggle to replace subscription revenue with that created by advertising. "It was a huge mistake. But we were all guilty of believing in the myth," he says.
Except, of course, as has been pointed out time and time again, subscription revenue has never paid for content. It's hasn't even covered the cost of materials and delivery in your average newspaper. The content has always been paid for by advertising, and you increase your advertising by increasing your viewership. The real mistake by newspapers wasn't that they didn't put up a paywall at the beginning, but that they didn't do much to actually engage their community. They just took their static newspapers and moved them online. But they didn't realize that they had always been in the business of selling the attention of their local community to advertisers. The problem was that in the online world, that local community had other options, and newspapers failed to do much to keep them.

This is one aspect that I expect we'll explore at the Techdirt Saves* Journalism event -- not just business models and what works, but actually engaging your community (and that means more than just putting up a comment form).
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Filed Under: evidence, journalism, paywalls


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  1. identicon
    Anonymous Coward, 7 Jun 2010 @ 11:38am

    Re:

    TechDirt doesn't have an aversion to paywalls. Customers do. And when you run a technological economic discussion site, talking about business models is what you do.

    And your cowboy crap makes no sense. Horses are still a profitable business, just not as profitable as they used to be. And you'd be hard pressed to find a cowboy that doesn't own a car.

    Do you have a point, or are you just being contrary?

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