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The Fundamental Problem With Newspaper Paywalls

Posted: 05/30/11 10:00 AM ET

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.

 
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...
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...
 
 
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RudyHaugeneder
12:17 PM on 05/31/2011
The reason PostMedia Network is trying something new to generate income in Montreal and, especially in Victoria, is because it can't find anybody willing to pay a decent price to purchase those two newspapers, both of which have strong unions which make it virtually impossible to cut staff and run them from a national headquarters in Ontario rather than in each city.
If the experiment fails then PostMedia will simply drop the selling price to get rid of them, and they will be purchased individually or as a package to a cutthroat media empire like Sun or Black Press which will severely slash staff, including in the newsrooms, as they always do.
The new buyers will care significantly less about news and put the crap they produce online for free because it doesn't cost much to produce and they know people don't look at their printed product for news content.
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08:54 AM on 05/31/2011
Indded. The problem with much of the Media is that some are trying so very hard to make the News a commercial (profitable) "product" these days. Canada is lucky to have the laws and rules she does that require truth and accuracy in news reporting. News paywalls will pass, eventually. But being able to find more fact than opinion in the news one chooses is important as well. I start with the BBC and CBC. Most of the sites I do visit with pay walls are because I'm linked to it from a populist blog. When I hit my 20 or so a month and run into the wall, I just click away from it. No harm, no foul. If it's a major story, it will show up in other places soon enough.
I'm not Pollyanna enough to believe that anything is free. But over and above the package that I like my News wrapped in, my first consideration is the quality of the News itself. Show me a quality product, and I'll pay a reasonable price. Trying to sell me day me a collection of popular tripe disguised as News on Tuesday, after it was free on Monday, will get you nothing but scorn from me.
01:47 AM on 05/31/2011
Good insight. I think an important distinction needs to be drawn between types of content, though. There is a huge supply of national and other popular news yet analysis pieces, local news, special features, etc. are in much shorter supply. Users often won't pay for the former because it is well within their reach at another of their often visited news sources, but users will pay for the exclusive content. At least, that's what we're seeing (I work for a micropayments provider called BuySimple, formerly called Minno).

This is one reason traditional paywalls have seen more success on local news sites as compared to national news outlets.
markhahn
rational progressive
03:56 PM on 05/30/2011
bravo. why is it so hard for companies to truely understand what they sell? another example of an industry pursuing its own fantasy self-image is music. it's not about the newspapers, it's not about the records/cds. it's about convenient media consumption.
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Hermida
UBC prof/digital scholar/award-winning journalist
04:27 PM on 05/30/2011
All media industries are facing similar issues as the physical products they sold are replaced with digital ones. The film industry is a good example of selling an experience, rather than just the movie. In news, companies are experimenting with apps that recreate and enhance the experience of reading the news.
markhahn
rational progressive
06:38 PM on 05/30/2011
perhaps I'm being half-full, but IMO apps are being used mainly to try to control the channel, rather than in an honest attempt to add value. apps are, of course, also mostly just an apple thing: the internet is web, not apps, and that's not going to change.

mainly digital media turns high-cost industries (like daily publishing or record manufacturing) into low-cost ones. that's great for customers, but not what media companies want - they want to be big like the old days. not going to happen again.