From the hands thrown to cheeks at Rupert Murdoch’s announcement that he was looking to put paywalls up around his newspaper properties online, you might think that they are the unicorns of the online world, spoken of but never glimpsed.
In fact, they are all over the place — and working well for their owners, although hardly any are simple “pay to get in” walls. In fact, that’s the least common of paywalls. Far more common are forms of the “freemium” model, where some content is free but other items are walled away for premium subscribers.
And freemium seems to work. The US sports network ESPN uses it for its ESPN Insider site, which offers video and extra reportage on upcoming games. You can also find it at the science journals Nature and Science, the magazines New Scientist and Scientific American, The Lancet and similar medical journals, and the Spectator (on its iPhone app).
PHOTO: REUTERS
Even in the computing world — which, given that it deals with the Internet, might seem like the proving ground for the failure or success of paywalls — there is charging for certain forms of content.
The popular Ars Technica site has a “premium” version, which offers “exclusive access to insightful Ars Technica content ... live chats with Ars editors, industry innovators, and a seat at the editorial roundtable ... ad-free layouts, single-page article options, downloadable PDFs and access to full-text RSS feeds.” (An RSS feed is the essential text of a page, such as this story, rather than its “furniture,” such as the design.)
Similarly, Slashdot, one of the most popular sites among programmers, has been offering a service since 2002 that lets buyers view 1,000 of its pages without ever seeing an ad for US$5. True, it’s not much — and some Slashdot denizens would pride themselves on being able to prevent ads being shown by entirely programmatic, rather than financial, means. But the move prompted a predictable row between those willing and unwilling to pay, which included one person who decided he would filter out the ads and also pay the US$5. Clearly, if people value a site, they will pay for it, and Slashdot’s power is in its community.
The Gigaom blog, which covers developments in computing and the Internet, also offers “premium” content that it bills as “a revolutionary approach to market research” for US$79 a year. And then there is LWN.net, a Web site offering news about the free open-source software market, which offers some content free and other content for US$5 a month. Similarly for Apple fans, there’s Macjournals.com, which is delivered as an ad-free newsletter daily or weekly for US$39.95 and US$14.95 a month respectively.
Yet there have also been failures in the paywall struggle. In September 2005 the New York Times (NYT’) set up TimesSelect, which cost US$49.95 a year and put its commentators and archive content behind a paywall; exactly two years later it dismantled it, having determined that advertising growth was larger than subscription growth. But it was not an outright failure: The NYT’ says it got 227,000 paying subscribers — out of 787,000 overall — and generated about US$10 million a year in revenue.
The difference now is that advertising growth isn’t looking so rosy. And that is believed to have driven the NYT’s executives back to their spreadsheets to see whether TimesSelect, or some descendant, might not be at least a partial answer to its troubles.
So — paywalls are not a mirage; nor are they a unicorn. They are out there and they work. The question that remains unanswered — until Murdoch implements something for his papers — is whether they will work for newspapers. The real solution is “freemium:” You offer a lot to lots of people for free (with ads), but you entice those at the high end with paid-for stuff. Never rule out freemium. It’s incredibly powerful.
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