Building Bridges Instead of Pay Walls

May 03, 2010

May 2010 Issue

Think about the last time you ran into a registration wall. How did you react? If you're like me, chances are you gave up and left. Now, think about being asked for your credit card to see some content. Are you reaching for your wallet? Probably not. Yet newspapers and magazines are deluding themselves into thinking that pay walls, the same idea that has failed in the past, will suddenly, magically be the solution to their revenue crisis this year. To put it mildly, I'm dubious about this scheme.

When newspapers first erected pay walls, they effectively siloed their content on the web. This approach runs counter to the way the web works. You want people to link to you. You want eyeballs on your site. Don't get me wrong; I understand that newspapers want to, need to, and should make money off of their content. If I were in the newspaper business, I would be trying lots of new things too. While I'm not sure erecting pay walls is the correct approach, there are smart people who beg to differ.

John Blossom, president of the consulting firm Shore Communications and author of the book Content Nation: Surviving and Thriving as Social Media Changes Our Work, Our Lives and Our Future is less skeptical than I am about pay walls. While he agrees that they failed in the past, he believes there's a better shot today, partly because of new approaches and partly because people have shown a willingness to pay a little bit of money for content on devices such as the iPhone. "As publishers look to their web and mobile platforms for ecommerce options," Blossom explains, "they are hopeful that they can define contexts in which payments will be not only provided but even help to establish a more valued relationship with their content users." Key to these efforts will be flexible approaches to determining when and how payments can be applied.

That may be so. I think that the Financial Times (FT) of London does a fine job of balancing free versus pay: You can view 10 free articles a month and then, you have to subscribe or wait until the next month to see another article. However, I recently found myself in the midst of a debate with several knowledgeable people on Twitter who complained about FT's model. So even in instances where the publisher is trying to find a proper balance, some users will be unhappy.

Blossom also sees publishers struggling to find effective models. "When we say pay wall," he says, "one of the key differences between earlier concepts of premium payments for content online and today's [concept] is that most publishers recognize the need to balance premium access with support for nonpremium ad-based revenues. The Wall Street Journal has proven that strongly branded high-quality content can make that balance work in online environments pretty well."

I agree that it can work with highly branded content, but I remain skeptical that anyone will ever pay for general news. However, there is a possibility that newspapers could find a market for the premium or specialty content they produce. As a big fan of Boston sports and The Boston Globe's sports coverage, for instance, I know I would be willing to pay a modest fee to access some of the content The Globe gives away for free, including Q&A sessions with beat writers, favorite columnists, and exclusive interviews and features. Would I pay to get the news about last night's game? Probably not.

I read recently on that Condé Nast was considering bringing back Gourmet magazine in an electronic-only format. The company plans to monetize this by taking advantage of the brand reputation that Gourmet enjoys with cooks by selling a line of Gourmet-branded cookware, an approach that I think has great promise for those publications that have that level of brand recognition. Blossom agrees, but he cautions that you can overplay this method. "Brands can be overextended sometimes in the process, so some good brand management is always in order. But in general, anything that can extend the power of a publishing brand will help both its own marketing and its ability to command a presence as a powerful marketing tool for its advertising and marketing partners."

Newspapers are in a difficult situation-they're caught between models, and they're desperately seeking new revenue sources. Still, they have to be careful not to overestimate the value of (all of) their content. They have to be creative and open to new ways of doing business. Pay walls might not be the only route to success and could very well prove once again to be a barrier to success online.