The NBR’s cheeky online offer

New Zealand’s The National Business Review newspaper is erecting a paywall, reserving roughly 20 percent of its online material for paying guests only.

There is nothing wrong in principle with charging for online content. It's a good idea. Online advertising is a reliable and unsatisfactory source of income for a publisher.

Yet the move is far from simple.

Paywalls work for specialist publications. They are best if there is a well defined niche that needs high quality coverage by professional journalists.

The NBR with its focus on New Zealand business news meets that criteria. But it's a crowded market already catered for by other publications. Being the first to charge readers is a brave step where the majority of that business news coverage can be found elsewhere at no charge.

If the NBR continues to publish 80 percent of its stories for non-paying readers, the logical business model is, despite its limitations, to sell advertising.

But if the paper blocks off 20 percent of its best content from the open internet behind a paywall, it limits the potential traffic reaching those advertisements. There needs to be careful work balancing the amount earned from paywall subscription sales against lost advertising revenue.

The NBR's asking price for a paywall subscription feels wrong. The paper wants to charge $89 as a special offer and a normal rate of $149 for access to 20 percent of its content for six months. This compares with $228 (including GST) for a six month subscription to the print edition.

To earn a print subscription, the NBR has to do all the normal journalism work, then it needs to pay others to chop up and munch trees, squirt ink, and post the finished product to your letter box once a week.

In return readers get to see 100 percent of the printed material for as long as they wish.

All of this is achievable, but it's a risky leap for the publisher. No-one in New Zealand has made this work in the past. The NBR is entering uncharted waters.