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The Times: paywalls, porn and iPads

Gary Marshall: Paying for news is doomed. Isn't it?

March 26th 2010 | Tell us what you think [ 19 comments ]

times-online

iTunes has proved that people will pay for things they can get for free

Ding dong, the Times is dead. From June, the Thunderer and its Sunday sibling's online versions will be tucked behind paywalls, and if you want to read their stuff you'll pay £1 per day or £2 per week.

Unless every other UK newspaper does the same thing at the same time, News International - the Times' parent company - is about to shoot itself repeatedly in the foot. £100 a year? You get the entire BBC for that sort of cash!

Now we've predicted the general online reaction, let's be a bit more sensible about it. Many of the people who won't pay for news online won't pay for news in print, and wouldn't pay the BBC licence fee either if they didn't have to.

Their opinions, therefore, don't matter. What does matter is the opinion of the Times' current readers. The Times doesn't need to persuade everyone to subscribe. It just needs enough people to subscribe.

What the Times can't do is nothing, because the current way of doing things is no longer working. Newspapers are bleeding money, the Times included. Think the Guardian's doing well with its snazzy iPhone apps and world-beating website? It's bleeding red ink, and its sister title The Observer narrowly escaped closure earlier this year.

As Times writer Caitlin Moran tweeted earlier, "have you seen how thin and pitiful the Observer had become? Half of it's disappeared because it's MAKING NO MONEY. The Times loses £1m. A WEEK!"

That can't go on. Some newspapers are trying to fill the gap by running conferences, or selling value-added services. Others are going behind paywalls.

Has the Times chosen the smartest option? Nobody really knows, but the argument that it won't work because other newspapers are free might not be relevant here.

iTunes has already proved that people will still pay money for things they can get for free - most of the billions of songs Apple's sold were widely available on the P2P nets and torrent sites, but people paid anyway. As MSN content manager Alastair Bruce demonstrates, paywalls are becoming more common - and many of them appear to be working.

The news challenge

There are two challenges facing the news business. The first is to produce content that's unique enough to pay for, and the second is to make paying for it as painless as possible. We're not sure we'd pay a sub for a single newspaper or for one publisher's stable of papers - if you're a Times reader, would you want The Sun too? - but we'd consider a bundle that gave us access to several, complementary things.

Those things needn't all be websites, either: News International also owns Sky, so it could include its papers as part of your TV bundle, or it could hook up with sympathetic publishers to offer a subscription that combines newspapers, magazines and other media.

Perhaps publishers could learn from the adult industry, whose payment networks have long provided access to multiple websites for a one-off payment, dividing the spoils between participating sites.

What we do know is that publishers need to do something now - or at least, they do if they want to avoid the same fate as the record industry.

The businesses aren't identical - with newspapers, the people giving stuff away for free are the newspapers, not pirates - but the imminent iPad could be as much of a doomsday device as the iPod proved to be for the record business.

The iPad is a credible alternative to print, a device that's usable for reading in a way laptops and desktops simply aren't. If it, the next Kindle or some other new device takes off as a newsreader while free access remains the norm, then what little money's left in news will be diverted from the content creators and into the pockets of the hardware firms.

It happened with the iPod, and it could happen all over again with the iPad.

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Your comments (19) Click to add a new comment

bpearson


March 30th 2010

19. @Dyonas - There might not be your traditional printing and distribution costs, but you still have other costs which need to be covered. Hosting, editorial costs, marketing, central services. Even though content is free online (at the moment), it is certainly not free to publish it. Apparently Murdoch believes that he can make the site more profitable by having a subscription model. Whether he will have ads or will drop them I'm not sure. I'm guessing time will tell whether it's a master stroke or a massive mistake.

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nicolasmerritt


March 30th 2010

18. @backstroker

A doomed one to one replacement model is right. It's telling that the mag companies have reproduced mags. Book companies have reproduced books. These are defensive approaches being touted as some kind of revolution.

The web is treated as delivery channel only, and not central to the reading experience, which seems wrong. I would like to see what an Internet company does with the iPad.

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kasino72


March 30th 2010

17. I agree with all of that, backstroker.

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backstroker


March 29th 2010

16. While there's obviously a problem to be solved here, they seem to be approaching it through a one-to-one replacement model. This is doomed because of

i) The difference in perceived value. Although we know that print is financed by advertising, subliminally we purchase an object, and a virtual replacement "has to" be cheaper.

ii) Purchase of a print paper is either impulse on the basis of browsing or curiosity, or a regular purchase. In either case it's out of loose change, not a banking exchange with its overtones of commitment.

iii) Web consumption of news is overwhelmingly on an item-by-item and impulse basis, not by purchase of a complete package containing unwanted material.

iv) Paradoxically, pay-and-forget decisions for internet services are the most accepted model, avoiding as they do the big "value" decision which a daily, weekly or monthly payment requires.

Thus while I might be prepared to pay an annual fee (£20-£30?)for access to a facility, if I had to make that decision, regardless of price, each time I wanted to read something I'd go somewhere else. What's more, with this approach it wouldn't be beyond the wit of man to build such subscription details into links-through from search engines or other sites

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dyonas


March 29th 2010

15. How much does the paper version cost? At most, if I wanted such a thing, I'd consider paying maybe 66% of the paper based version. There is no cost for printing, paper or any of the normal costs associated with getting it into circulation.

£1 a day looks steep, £2 a week only looks good in comparison to that. I wouldn't be surprised if the daily cost is purposely inflated to make the week cost look a better option. I hate anything that tries to give a false impression of savings that way.

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nicolasmerritt


March 29th 2010

14. The iPad is another channel. It makes it easier to create paywalls. It makes it easier to create packaged editorial (assuming that's a strength online and not a weakness). It makes stuff look nice. But it doesn't make editorial more scarce. Or more up to date. Or more authoritative. Or more flexible. And its content still has to compete with websites.

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meltwater


March 28th 2010

13. The decision by News International to charge for access to their websites is a really interesting move. Mel****er applauds the innovation of new business models for online content. Everybody benefits from a thriving and successful global publishing sector; any move that can mitigate the financial challenges in the media sector is a positive.

Many publications – such as the Wall Street Journal for example – have already gone down this route and others are considering the same.

The ongoing challenge for publishers, in the aftermath of installing pay walls, will be to ensure their customers are aware of the valuable and compelling content being created by their journalists. This could very easily be content that readers would be more than happy to pay for, but which they might not even know exists. Getting the balance right between the availability of free content and access to paid-for content will be crucial.

As a truly global media monitoring company, Mel****er believes we can play a valuable role in this regard. We are already creating global awareness of restricted content behind login pages and pay walls for numerous media outlets such as the Financial Times. We promote and market their restricted content to a global audience of potential paying readers and thereby drive traffic and revenue for our partnering publishers.

Jorn Lyseggen, CEO of Mel****er (http://mel****er.com/en/who-we-are)

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kasino72


March 28th 2010

12. Mattswain:

> It needs a selling point. Maybe that will be a lot of video, maybe it will be well-written informed articles, maybe it will be something else altogether.

Yes, definitely. It's interesting to compare newspapers with something like Private Eye, which is in rude health these days. I'm quite sure PE could go online and paywalled, and that it would work: what it does, nobody else really does.

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kasino72


March 28th 2010

11. On a related note, there's a nice defence of print by Vanity Fair's Graydon Carter over at Adweek.

http://www.adweek.com/aw/content_display/community/columns/other-columns/e3ie9fc421daf51cf825e4a5654e2555692?

"You could argue that the magazine is as brilliant an invention as anything Apple will come up with."

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mattswain


March 27th 2010

10. I think this will live or die on how it's marketed, how good the content is and cost.

Clearly if all you want are the bare bones facts of the news then you're not going to pay; there's absolutely no need and never will be. There'll always be someone offering free news even if all of the newspapers offer a subscription service.

It has to be marketed correctly; convince people why they should pay; what is it that makes it worth paying for.

It needs a selling point. Maybe that will be a lot of video, maybe it will be well-written informed articles, maybe it will be something else altogether.

Perhaps the time is right because of the technology that is available with devices like the iPad are coming at the perfect time for the newspapers.

I think we'll see a few different charging models while the publishers see what works from the one that the Times is proposing to micro-payments on a story by story basis.

I disagree with the comparisons to iTunes. A lot of people flocked to iTunes for convenience rather wading through a load of dodgy and torrents and some of us also prefer to hold legal copies of albums so our favourite artists get paid. This isn't remotely comparable to paying for news content.

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stu531


March 26th 2010

9. Ironic that whilst print is becoming cheaper (Metro), the Times is online-pay. I genuinely hope this fails in order that it doesn't become the norm. I don't think it will, though, because whilst ever there's a BBC providing decent news online for free, most other outlets are secondary.

I've got the Guardian iPhone app, which at £2.39 indefinitely, provides a great service. Paying £1 a day for online content just isn't going to work, it's the wrong cost model.

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nmac18


March 26th 2010

8. Why on earth are the Times online going to charge £1 a day right from the start. They should be encouraging their online base to stay with them when they go to pay per view. They should charge a lot less for their online content compared to the newspaper, even though it will be the same quality. All the news they provide for £1 a day will be easily found for nothing in plenty other news sites.

Bring small payments into news sites slowly would give them a much better chance of people paying for it, rather than going full price straight away, when you can get the news for nothing in the first place.

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kasino72


March 26th 2010

7. Convenience is definitely a big part of the equation. It's a right royal PITA to assemble your own printed newspaper, but exceptionally easy to do the same thing with bits in an RSS reader. So you pay someone to make your print newspaper, but you grown your own online and spend your money on the reading hardware instead.

I think the exception is when quality matters, so for example I buy DVDs rather than download films (legally or otherwise) because I want the ease of use, device independence and quality you get from a packaged product. I'm not sure how a newspaper can offer that, or enough of that to overcome the good enough problem where some other outlet's content is good enough to replace yours.

On a related note, I think it's going to be fascinating to see what the Guardian does with its newspaper app. Strategy appears to be get people in now for what's effectively free content and then charge later.

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nicolasmerritt


March 26th 2010

6. @labrowp

You aren't paying for content, you are paying for access to content you could not otherwise get. When you go to see a movie, you are paying to be let into the cinema. In the days before piracy, when you bought a DVD you were paying to be allowed to see the DVD. (Now of course, you don't have to pay if you torrent instead). Do you think you pay for the football? You are paying for Sky to allow you access to the football. And so on.

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bradavon


March 26th 2010

5. Nicolas is right. People don't use iTunes to get cheap music, they use it for simplicity and peace of mind. If all they cared about was getting cheap music, they'd be using Torrents.

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bradavon


March 26th 2010

4. I cannot see this working, when there are plenty of free alternatives to Times Online.

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labrowp


March 26th 2010

3. nicolasmerritt: daftest thing I ever heard. Of course people pay for content. When they buy a book, newspaper, magazine, CD, DVD, blu-ray, go to the cinema, whatever, they are paying for content. I don't read a Stephen King book because of access, scarcity, convenience, I read it for the content. Just like an AC/DC CD, a Star Trek film whatever. People do pay for content.

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kasino72


March 26th 2010

2. > People don't pay for 'content'. They pay for things like access, scarcity, convenience, hard benefits.

Oh, absolutely. I'm using "content" as shorthand for all of those things. I spend £700/year on (printed) newspapers, and I think most of that is for the form factor and serendipity.

I honestly don't know if I'd pay even £100/year for the same content on an iPad. That's kinda what I meant about the money moving to the hardware firms. I can justify buying an iPad and maybe a 3G plan to go with it in a way I'm not sure I can justify a news site sub unless it was *amazingly* cheap. A decent RSS app could do a reasonable job of replicating for free what I currently pay for in print.

Who knows, though, maybe the new Times sites will be amazingly innovative rather than just chucking print content into a template.

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nicolasmerritt


March 26th 2010

1. People don't pay for 'content'. They pay for things like access, scarcity, convenience, hard benefits. People don't pay for 'music' on iTunes. They pay for simplicity. They pay for peace of mind. And so on. Putting stuff behind a paywall means the benefits you get in return for paying for access have to be very strong. Can someone do an iPad version of a paper that offers sufficiently strong hard benefits? I've not seen much so far that makes me think so.

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