News Corp rolled out a paywall at two of its major UK papers. It's not going well. The New York Times is scheduled to roll out its own paywall in January. Should anyone there be having second thoughts?
Rupert Murdoch, of course, can afford to absorb short-term losses in his newspaper properties. He's famous for it, actually. But Techdirt points out two ongoing drawbacks of the paywalls at the Times UK: one, advertisers are fleeing the paper as its online traffic plummets; and two, its reporters are being passed over for those at other papers by sources who want to get their stories out more widely.
Those are both serious problems that could persist long-term in the coming online media universe, where major generators of original content will mostly have paywalls, and the meta-media of bloggers and aggregators will mostly remain free. In a speech yesterday, NYT chairman Arthur Sulzberger gave no indication that the paper was anything other than full speed ahead on its upcoming paywall, though he did say "If we discover that we've tried something that's not working, we could change it." And in a comment that perked up the ears of futurists, he added, "we will stop printing the New York Times sometime in the future, date TBD."
That shouldn't surprise anyone, though. Of course the New York Times will stop printing at some point in the future. As will most every newspaper, because print is an outmoded technology. It might take 20 years, but it will surely happen. And when all news is online, newspapers will have to charge for online news. It's quite simple. Online advertising can generate enough revenue to support an operation like Gawker Media, but not an operation like the New York Times. The great newspapers will surely shrink their staffs and become more efficient, but ultimately, expensive enterprise journalism requires paying subscribers.
The debate over fair use will be messy, but it will be settled eventually. Both sides—those first-line journalism operations who write up the news, and those second-line web operations that aggregate, parse, discuss, and promote that news—know that they need each other. Some fair agreement for the sharing of content and revenue will come to pass, one in which the details will ultimately be hammered out in response to how dire the financial straits of newspapers and their ilk becomes. It's not a make-or-break situation at the moment, but eventually it will be untenable to give everything away online for free. All this is just to say: paywalls are coming. Yes, they're a risk—especially for the early adopters—but better to give it a shot now and tweak it until it's right than to wait until the situation grows even more alarming. (Assuming the quality is there. For the bad newspapers throwing up paywalls, all hope is lost).