The Fundamental Problem With Newspaper Paywalls

05/30/2011 09:13 EDT | Updated 07/30/2011 05:12 EDT

Canadians living in the bustling metropolis of Montreal and the

picturesque city of Victoria are getting a taste of what some media

executives hope may be the future -- paying for the news online. The

Gazette in Montreal and the Victoria Times-Colonist on Vancouver

Island have become the latest testbeds to see if people will pony up to get their local news on the web.

From Wednesday, access to the newspaper websites was limited to the

first 20 articles, before hitting a paywall. It is part of an

experiment by PostMedia Network, Canada's largest publisher of paid

English language daily newspapers, in two relatively small markets for

its papers.

Like every newspaper group, PostMedia is trying to figure out how to

manage the transition from a paid print circulation to a digital

readership that is used to getting its news for free.

Changing human behavior is a tall order. A recent survey that

suggested that Canadians are overwhelmingly unwilling to part with their

cash for the news

It found that 92% of Canadians who get news online say they would find another

free site if their favourite news site started charging for content.

However, there is a more fundamental issue at play. People have never

really paid for the news. By news, I mean the political infighting in

city halls or the violence in faraway foreign places -- the news that

is important and matters but can be challenging to make relevant to a

broad audience.

Readers were paying for the sport results, the lifestyle section,

diversions like the crossword and horoscopes. The cost of producing

"the daily miracle" as Canadian playwright David Sherman put it was

largely borne by advertising sales. The subsidy model worked when mass

media was the dominant model for distributing the news. The business

of newspapers was delivering large audiences to advertisers, and they

were pretty good at it.

For readers, in exchange for a few pennies, they could get a neatly

packaged bundle of news and information in this easy to use and

portable format we called the newspaper. And did you know that it also

conveniently arrived on the doorstep in the morning.

The daily newspaper worked because it was a product honed over

centuries and met a fundamental need at a specific time in the history

of the media. It managed to fit everything you needed to know into a

bunch of pages. It provided a service, informing readers of events, in

a convenient format.

Print organisations were never in the business of selling news. They

were selling something that people are willing to pay for -- service

and convenience.

The news itself was not a commercial product.

The commercial product was the bundle of news, sport and

entertainment in a delivery mechanism called the newspaper.

Rather than investing in models that try to change audience behaviour,

news organisations should be trying to find new ways that provide

service and convenient in a digital media age. That's something you

can charge for.