Ben Brooks gets close to the heart of the problem with pay walls when he writes Subscription Hell. It’s hard to make money from pay walls.

The only online sites that do well are those like New Zealand’s National Business Review or The Economist. Both serve well-heeled audiences with unique, quality content readers can’t get elsewhere.

Brooks makes two interesting points.

First, differentiation. Brooks is thinking about podcasting, but it applies to all online media. In essence he says there are thousands of undifferentiated podcasts chasing the same audience.

…but will they pay?

The implication that no-one will pay to listen to one of the podcasts when there are dozens of free alternatives. You could say the same about most online media. This, in part, does not apply to pay wall successes like the NBR and The Economist. Their audiences don’t have obvious alternatives.

The other point is subtle. Brooks makes the connection between people paying for apps and buying pay wall subscriptions.

On the surface these are two quite distinct markets. And yet, recently I was thinking about exactly this concept from the opposite point of view. I have a number of subscriptions to pay each month. Some are for apps or online services. Others are for, it’s not the best word to use, but let’s go with it: content.

Pay wall, subscription software: two aspects of the same thing

In my budgeting, I see the two as aspects of the same thing. I allow myself so many dollars a month for subscriptions. It’s a single pool of money to cover things like cloud storage, online music, movie downloads, pay walls, apps and services. What isn’t spent on  apps is available for media. What isn’t spent on online media can be spent on apps.

A decade ago the budget was zero. It’s not zero today. While it isn’t a huge amount of money, it’s about the same as I spend on coffee. It may grow larger in the future.

The issue is, consciously or not, people only budget so much money for subscriptions. I have a limited pool of funds. So does everyone else. The world has a limited pool of funds for subscriptions. On a world scale it is huge and still growing. Even so, there is not enough to go around for everyone who would like to earn money selling pay wall subscriptions or apps. Too many sellers, too few buyers.

And there’s the problem. It’s not hopeless. Services like Press Patron (see the red button at the foot of this page) offer a way out. People can choose to set their own amount to pay. If you go back to my budget approach, if I don’t buy software one month, I can flip a few bucks into someone’s Press Patron.

But it’s difficult. The market for content pay walls or subscription software is not infinite.

Karen Fratti thinks publishers need to stop using the word ‘paywall’ to describe ways online sites charge readers. She prefers we talk about subscriptions.

Fratti writes:

 let’s stop talking about putting up walls to keep people out. The paywall has only led to griping from consumers who’ve reached their monthly article limit, and unique ways to get around them. We’re wordsmiths, we know words matter, and ‘paywall’ is another relic of the old media-new media debate. Knock it off.

I agree with Fratti on this, rightly or wrongly paywall makes me think of the watch towers and armed guard that patrolled central Berlin during the Cold War. The paywall is the new media’s equivalent of Cold War thinking.

Can’t We All Just Subscribe? Why ‘Paywalls’ Won’t Get Us Anywhere – 10,000 Words.

Will readers pay for online news?

There is evidence readers will buy specialist information. Business newspapers are able to find subscribers. NBR readers buy news. No-one seems to have cracked the puzzle of selling general news.

Not even Rupert Murdoch.

The Guardian reported Murdoch’s iPad newspaper, The Daily, sold only 80,000 subscriptions. That’s one-sixth of the subscribers he said it needs to break-even.

This is strange. For years readers handed over hard cash to buy printed newspapers. What were they buying if they weren’t paying for news?

You can find an answer in Julie Starr’s simple test for whether people will pay for news. Her blog post is a thought experiment. It underlines where print readers find – or maybe ‘found’ – value in their daily newspaper.

Australia’s federal court decided copyright doesn’t apply to newspaper headlines.

The decision strikes a blow against publishers wanting to hide content from non-paying online readers behind paywalls.

It came in a copyright claim made by Fairfax Media over headlines in its flagship business newspaper, The Australian Financial Review (AFR).  Disclosure: I spent seven years working as a freelance journalist for the AFR and a further two years as an associate publisher for its parent company.

Paywalls

Fairfax was looking to halt Reed International reproducing AFR headlines on news abstracts in its LexisNexis service – which incidentally, like the AFR, is also behind a paywall.

The AFR has operated a newspaper paywall long before the strategy became popular with newspaper publishers. For many years the AFR was derided for being out of touch with its paywall. Now everyone is in on the act, the case takes on more importance for the publishing industry.

Summaries substitute for articles

My old boss, chief executive Michael Gill went in to bat for the copyright claim. He said Reed intended its summaries to substitute for the articles and breached copyright by reproducing AFR headlines and by-lines.

The judge ruled otherwise saying Fairfax’s sample headlines were not literary works “in which copyright can subsist”.

She said Reed’s conduct was fair dealing and not copyright infringement.

Gill said Fairfax was considering appealing the decision.

Torn over copyright decision

As a journalist who has received an annual income from Australia’s Copyright Agency, I’m torn over the decision.

On the one hand, I feel publishers need protection from copyists who simply scrape data from the web, then repackage and sell it. Many of my stories from this site appear on other people’s sites – that makes me angry.

And well written headlines – the AFR employs some of the best sub-editors and many headlines are first-rate – provide readers with part of a story.

On the other hand, there’s always been an acceptance small works such as headlines, titles and advertising slogans are not protected. Now would not be a good time to start.

It is early days for the newspaper paywall. The experience so far says successful paywalls have four things in common.

Paywalls work for business newspapers like The National Business Review (NBR), The Australian Financial Review and The Financial Times.

Commentators often say paywalls and subscriptions work for niche titles providing specialist coverage and editorial quality.

This is true. For example, I work for CommsDay, which is a successful specialist niche title covering the telecommunications market. CommsDay doesn’t use a paywall – it is a daily PDF newsletter.

There’s more to getting readers to pay than occupying a specialist niche.

There are three other must haves:

  • Quality. The above titles are editorially excellent and professional. They are the best in their field.
  • Well-heeled audience. People who buy online subscriptions are richer than average readers. Business people often have personal or company-wide budgets for buying media.
  • Quick. Paywalls work when readers need information fast. They have to find it more convenient to whip out the credit card and pay for a subscription than walk to the local shop and buy a print copy of the publication or spend 30 minutes Googling for information.