Rupert Mudoch Should Have Listened: The Paywall Disaster

When Rupert Murdoch announced that he intended to charge a subscription fee for his papers, some of us predicted that it was going be rough sailing for him. But, I guess some people just have to hit the iceberg to learn. Here’s what I wrote back in May of last year,

According to Rupert Murdoch, there will be subscription charges for all of the “News Corporation’s newspaper websites” within a year…

…This is fantastic news — well, for all of Murdoch’s competitors because this isn’t going to work.

People always point to the WSJ as an example of a company with a successful subscription model. The problem with that sort of thinking is that the WSJ can offer something that’s not readily available for free on the web: high quality investment advice from a reputable source.

On the other hand, there’s nothing unique enough about newspapers to merit buying a subscription. Local news? You can get that from your local news show on TV. Columnists, sports, national news, and foreign news? You can get it in high quality, for free, elsewhere. So, why subscribe? Think of it like this: if you could get as much Breyer’s Ice Cream as you wanted, for free, anytime you wanted it, how many people would still pay to buy Ben and Jerry’s? Very, very few.

Moreover, the other problem is that the moment you toss up a subscription wall, nobody is going to link to you anymore. Who wants to send their readers over to an article that they can’t look at without paying a fee?

That’s why the subscription model doesn’t work very well on the net…

Today, the results are in and can I call it or what?

We had already seen the early indications that Rupert Murdoch’s paywalls from The Times and The Sunday Times in the UK were a dismal failure, but as more information gets leaked about how the paywalls are working out, it’s looking worse and worse. Beyond the fact that not too many people are signing up to pay, the move has upset advertisers who don’t want to advertise to such a small audience:

Faced with a collapse in traffic to thetimes.co.uk, some advertisers have simply abandoned the site. Rob Lynam, head of press trading at the media agency MEC, whose clients include Lloyds Banking Group, Orange, Morrisons and Chanel, says, “We are just not advertising on it. If there’s no traffic on there, there’s no point in advertising on there.” Lynam says he has been told by News International insiders that traffic to The Times site has fallen by 90 per cent since the introduction of charges.

On top of that, various PR people and publicists are keeping their sources away from Times reporters, preferring to provide access to news organizations where the story might actually get seen by people, rather than locked up behind Murdoch’s paywall:

Publicists have told me that clients are increasingly reluctant to give interviews or stories to The Times, on the grounds that they would not be made freely available via search engines.

The old business model that papers used simply isn’t going to work in the future. That’s not a scary thing; it’s just how the world works. Instead of trying to force the public to support a no longer viable business model, papers need to start restructuring to adapt to new realities of the marketplace.

Papers need to get leaner, more web savvy, more focused on the wants of their customers, and they need to embrace citizen journalism. The news isn’t going away, but newspapers that refuse to evolve and adapt are going to join the dinosaurs in extinction.

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