Evidence against news paywalls

Rupert Murdoch wants to charge for online news. He plans paywalls allowing subscribers full access to material written by his journalists.

Yesterday came evidence his plan won’t work. At least not in Murdoch’s native Australia.

According to media measurement company Nielsen, an on-line property attempting to lock-in readers will become a niche publisher and over time, irrelevant.

Writing in her Boss Lady column at Smart Company, a free Australian business news website, Amanda Gome quotes Nielsen director of analytics Mark Higginson, Director of Analytics.

Higginson talks numbers before saying print newspaper readers are loyal to their preferred brands, but this loyalty doesn’t extend to online publishing.

Gome writes:

So the first mover who introduces paid content will simply be taken off the favourite list as consumers look to other sites for their news.

 

8 thoughts on “Evidence against news paywalls

  1. Newspapers are accustomed to running geographic monopolies, that are meaningless on the internet. News sites must occupy a unique niche in information space, in order to charge for content. Few sites can do this, Wall St Journal and New Scientist may be examples, it is hard to think of any publications in NZ of similar stature.
    Most NZ publications are based around press releases and syndicated news like NZPA, AP, Rueters etc. These tend to homogenise content, eroding any difference in information space between publications. There is, therefore no reason to subscribe to sites, who really are feeding low cost, low value news.
    If any of the print websites retreat behind a pay wall, the broadcasters, who have, essentially, the same stories, will advance into the vacuum. The broadcast business model is closer to the internet model and they don’t have the printing costs of print news. This will require that broadcasters to get over the fixation with audio video and focus more on print.
    It takes less time to read print, than to watch grainy video or listen to audio, as most people read there news at work or during breaks at work time is important. There are signs particularly at 3news that they understand this.

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    • Yes, I agree with most of what you say. News is largely homogenised in New Zealand. When it isn’t it’s parochial.

      The National Business Review is one of the few New Zealand titles able to charge readers because it has unique and specialised material. It also helps that NBR readers are well-heeled.

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  2. What we really need is a micropayment system for online newspaper content. I’m never going to take out a subscription for a newspaper’s website but a system that charged me a small amount (e.g. 1 cent) to read an article would be fine. I know these have been discussed before, but if one of the major publishers introduced this as an alternative to an annual subscription I think it would catch on.

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  3. @Parsley72

    I can’t see micropayments working on a story by story basis for ordinary news – where the guts of the story is often encapsulated in the headline and intro. I can see it working for features and in-depth analysis.

    One alternative I CAN see working is for readers to pay substantially more than 1 cent, say for the sake of argument 50 cents, and have unfettered access to all news on a site for 24 hours. This is pretty much the same deal as buying a printed newspaper. And the 50 cent payment is more than most daily newspapers earns from a single copy sale after newseller margins and the cost of print and production are taken into account.

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  4. I’m not sure attempting to charge for headlines and intros was ever viable – an “old world” comparison would be me seeing the headlines on the paper as I walk past.

    Your suggestion of a 24 hour charge sounds good, but the final form the micropayment would take is something that would be worked out over time. However, it’s a better alternative than the subscription model Murdoch and his peers seem intent on.

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    • @Parsely72 The way people usually read traditional newspapers is they scan headlines, then read intros before deciding to read on. I doubt it is very different online.

      If the story is written correctly, the headline and the intro encapsulate the story – reading further only adds depth and detail. Thus, from a reader’s point of view. ninety percent of the value in a story is in the headline, intro and first paragraph. On the other hand, publishers need to give this much information away as a way of tempting people to read on.

      In other words, with per story micropayments a reader can get the bulk of the news for free online without paying. Because the payment is a barrier to reading further, readers will choose not to read the whole story more often than they would made the same decision in a printed newspaper.

      And don’t forget Google News – which publishes just headlines and intros. Rupert Murdoch and other publishers complain this stops readers from visiting their sites and sucks business away.

      If the overwhelming majority of readers don’t click down for more depth from Google News, they are even less likely to click on a micropayment button to get that information.

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  5. I agree with you about headlines but I’m not sure how Murdoch intends to change this model. It’s a circular argument – if I’ve read the headline and decided I’ve no interest in the story, should I have paid to read the headline?

    For example, this morning I’ve seen the headline about Jensen Button winning the Grand Prix. I have no interest in this story but I know who he is and what this means. I’ve also seen the story on BBC World and local news. Should I have paid to see this headline? The information’s out there for all to see, so the fact that I saw it online first says more about my morning habits than the power of online media.

    When I go to read a story on a newspaper website it’s precisely because of the depth and detail. The exception to this is when I read something like Jan Moir’s piece on Stephen Gately in the Daily Mail, precisely to see how bad it is. I would certainly never pay for this in case the author somehow thought I was encouraging her views.

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  6. All of which brings us back to earlier discussions about the pitfalls newspapers face when charging for news.

    The headlines and intro are both the most important part of the story AND the advertisement acting as a come on to sell the content, which by definition has a lower value.

    Another possible model works like the tip box in a cafe:

    Click here to micropay 1 cent because you liked this story.

    Maybe that would work. I still think my 50 cents for unlimited 24-hour access is better.

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