I have become a bit tiresome, I suppose, in pushing my views that news companies need to stop pursuing paywalls, move beyond advertising and find a more prosperous future in direct transactions.
Well, Dale McCarthy of Fairfax Digital in Australia is showing the wisdom of this approach. A story in B&T reports on McCarthy’s dismissal of paywalls, speaking at a recent media conference.
McCarthy said the internet’s real “rivers of gold” is transactions.
“Don’t curl up in the foetal position because there’s lots of ways to make money on the internet,” she said. “The vast majority of our online revenue comes from transactions, not advertising.”
The online publisher’s travel site, Stayz.com.au, sees it take a cut of the profits made on hotel bookings, and it is able to make money from its business audience through its Invest Smart site by helping consumers choose managed funds.
If you’ve read this blog much before, you will notice that transactions are key to both my Complete Community Connection business model and my mobile-first strategy.
British professor and multimedia producer David Campbell wrote one of the most insightful explanations of why paywalls won’t work:
We need to appreciate that even the most successful pay wall strategy will never fund investigative journalism. Pay walls are a form of subscription. But subscriptions have only ever generated about 20% of a newspaper company’s revenue. This means the most successful pay wall will never compensate for the collapse in advertising revenue. …
A general pay wall for news content will slash the number of visitors and fail to generate even modest revenue for investigative journalism.
Campbell in his piece cited two recent posts by Damon Kiesow and Steve Yelvington, explaining the difficulty of deciding where to put a paywall. They examined how few of unique visitors are actually loyal readers, the kind who would pay. “Here’s what’s wrong with a paywall,” said Yelvington: “If you’re trying to persuade people to give you money for your content, it’s the wrong tool. It’s like cutting butter with an ax handle. You’re just going to make a big mess.”
I recommend all four pieces if you’re trying to figure out the media economy and what your company should do.
“We’re the community watchdogs! We bark when there’s trouble, alerting not only the authorities but also the public, which needs a check on those authorities, that something dubious, danegrous or possibly illegal is going on. Now if you’ll just purchase this special hearing aid for $49.95 you’ll be able to hear our signals when we bark…”
Make sense?
As I said to you on Twitter, Steve: an additional argument you might add to those you make here is that paywalls prevent the broad distribution of results that make investigative reporting worth supporting via paywalls. If the work can be funded by transactions, then it can have the even broader reach that the Internet provides compared to newspapers.
LikeLike
Couldn’t agree more, Jay. David Campbell makes that point well in his piece, so I linked to it rather than repeating it, seeking to keep this post brief (something I don’t try often enough). But I’m glad you made the point.
LikeLike
[…] A model for journalism… By Michael Becker | Published: December 22, 2009 “We’re the community watchdogs! We bark when there’s trouble, alerting not only the authorities but also the public, which needs a check on those authorities, that something dubious, danegrous or possibly illegal is going on. Now if you’ll just purchase this special hearing aid for $49.95 you’ll be able to hear our signals when we bark…” (via Jay Rosen, on a comment to a Steve Buttry post) […]
LikeLike
In the end, the consumer pays for everything. Let’s be transparent and ask them to subscribe.
Hustling readers with click-to-send-flowers in the middle of an obit feels slimy. What do we suppose the click through rate will be for anything in Afghanistan war reporting? And the police blotter should be good for just what kind of click-to-buy stuff?
Where did the good old days go when news was what filled the space between the ads? Let’s go back to the days when the ads were the news!
I was driven from the airport to downtown Mobile AL to the NNA convention. The driver reported buying the local daily for the coupons a couple of days a week. I guess that is a kind of click through. Maybe I’m wrong. Maybe click-through will be king. Oh oh, some guy named Craig will coop that, too, probably. How hard could that be?
Oh, so the key is to make the site so compelling that people will gather there to do their click throughs. Well, I’m thinking that a site that is that compelling will be worth … a subscription!
Hey, people pay $100 a month for cable or satellite television, and never look at 99.99% of the available content. So, do they buy it for the content? Exactly.
I’m thinking that we quite looking at newspapers or websites and instead look at everything that people are subscribing to. Cable Television. Internet service. Gym memberships. Sewer. Cell Phones. Unlimited Texting. Automotive leases. Insurance. Mortgages. Computer Leasing. Identity Theft Protection. Lawn Care. Unlimited second-day Amazon purchase delivery. Computer backup service.
OK, now that we have established that people pay a subscription for things they enjoy, need, or that otherwise makes their life more convenient, relaxing, fulfilling, satisfying, or defended … let’s ask ourselves what kind of combination of information formerly scattered across the pages of a newspaper plus information only available digitally mediated, sourced by both the creators and consumers of the experiences, can we picture consumers subscribing to?
In short, how can we (re)create a community that is so compelling that families and individuals and commercial enterprises, and non-profits, and … well, pretty much everyone that formerly engaged in the newspaper-mediated community will subscribe to the new community, a community that is more responsive, more engaging, more convenient, more comprehensive … oh, and vastly more profitable than anything we’ve seen so far?
Let’s imagine monetizing the whole experience.
LikeLike