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The Problem with Paywalls

The concept of paywalls, which publishers continue to agonise over, is a by-product of our digital age. But, writes Ross Sturley, there are some valuable lessons to learn from an earlier wall-building exercise.

By Ross Sturley

Back in the sixteenth century, there was a bit of a hoohah about ‘enclosures’. Landowners were building walls around their land to keep the peasants off it. While the land had not been truly free for a long time, the peasants got upset as they felt some right of way or use was being taken away from them.

One of the eventual results of this was a series of public uprisings in which many people died, and much damage was caused to property. It struck me the other day, while reading my “1066 and all that”, that there were some lessons here for publishers.

If you’ve been giving your information away for free, and you put your paywall up, your readers could be forgiven for feeling like the participants in the Newton Rebellion. What had been free, is now out of bounds. “Aaaargh *@&$%*% paywall!” is a fairly common tweet in response to someone sharing a useful link.

What the chap concerned is saying is; “you’re telling me this is interesting, and I think it probably is, but I’m not allowed to see it unless I pay, and I’d rather not, as this may be the only thing I ever buy from this publisher, and frankly, I don’t want to pay for interesting titbits anyway”, although obviously that’s a few more than 140 characters.

What do paywalls do?

There is no doubt that paywalls annoy the casual user, and probably bar many of them from content. I undertook a small survey researching this article, and found that only one person in a hundred will even consider paying for content they’re pointed at by a contact or search engine.

On deeper investigation, it’s slightly more complex than that. Propensity to pay is influenced by whether they’ve been pointed at this particular media brand before, how unique the information is, and how much they need to know it. It is also influenced by the type of content.

While reports are something many would consider paying for access to, no one in my sample had ever, or felt they would ever pay for ‘news’ content that they didn’t already have access to when referred to it. You can conclude that if someone finds your news story via Google, they’re never going to pay for it, or any other news article you might produce. So a firm paywall effectively makes deep SEO a waste of time for news providers.

Some news publishers choose to allow ‘first click free’ from Google search results. This is a strategy which at least lets googlers sample what you have on offer, and become more interested in your brand. However, it also allows the systematic subversion of paywalls by regular users able to exploit such a hole in your wall.

Paywalls say things about you

Users feel differently about information that has never been free, or about media brands which have always charged for access, than they do about that which has been free, but is now only accessible to paying subscribers. Most surveyed accept that the FT and the Economist are “worth paying for”, but that material available from (for example) the Times can be found elsewhere for free. So your paywall strategy affects your brand perception.

It seems now that the best strategy is charging for information right from the start. Brands like Estates Gazette and the FT aren’t having the problem of ‘enclosing’ their free content with paywalls, as they built the walls before the content. For many, it’s a bit late for that now, having been giving content away in the hope of making millions on advertising. So what can they do?

Ditch the Sub

My very helpful survey sample suggests micropayments. It’s amazing how many publishers still ask for a couple of hundred quid upfront before releasing access to a single news item. None of my sample would buy an annual subscription to get to a recommended piece of content.

Most would at least consider paying a per-article fee, although this would need to be under 50p, and administered through something like iTunes. They also liked the idea of ‘day passes’ to subscriber areas, and felt this might even encourage them to think about being a full subscriber, especially if weekly or monthly payments were available either through iTunes, or on direct debit.

The survey brought up the concept of a general service – the fieldwork was shortly before iTunes’ recent launch of Newsstand which is very similar to that suggested. Apple’s Newsstand of course takes the 30% commission, and the customer control away from publishers, so perhaps this is an area where publishers could collaborate? Perhaps together, publishers could produce their own “Newsstand”, rather as they set up the Publishers Licensing Service. This could collect payments on account from users for access to a range of information services and then pay them over to publishers according to usage.

In the academic field, my survey said links to document delivery services could be used more – the British Library offers an article purchase scheme for academic journals which results in a royalty to the publisher. If a casual browser fancied access to one paper from a journal, they are more likely to use such a service than to buy an annual subscription to an individual journal, and the royalty would be something at least. Do you have a link to document delivery services from your sites? Maybe you should. My survey sample would like it.

Use the users

Users want to share links to content. They want to point their contacts at stuff they think is interesting. It makes them look good of course, and often helps them build business. However, they are nervous about sharing links if they don’t know that people will be able to look at them now, and in a week’s time. “Paywalls make link sharing a lottery” said one.

Surely we can harness this willingness to share? Blogging software and social media is full of ‘share’ buttons and opportunities to ‘like’ the content – publishers can help people to share links, and many do with a ‘tweet this’, or ‘email this’ button. Using the propensity of people to flag information to friends to generate money would be good, but we won’t manage it if when linked, the recomendees are met with a gruff request for a two hundred quid annual sub.

However, if it’s just a request for 50p, then it seems there would be a chance it might be granted. As one respondent commented, “I understand why trade journals need to pay (some of) their writers. The problem is that the business model is broken”, by which she means the annual subscription model.

I couldn’t help wondering what would happen to loyal subscribers if they saw a new payment system. I recently switched from Sky to BT as I can more easily turn the sports channels on and off in line with the football season. Will subscribers see a pay-to-read account as a better way of buying content simply because it won’t cost them anything when they’re on holiday?

The death of subscriptions

So perhaps the saddest casualty of the enclosure of once-free content could be the annual subscription.

I guess subscriptions only really got going once a postal service was introduced (Post Magazine, which is still in print, got its name because it was the first to be sent through the post – in 1840). So, in a world where information is increasingly not posted, it might be no surprise to see the concept wane in popularity. Just because it’s been around as a payment method for nearly 200 years, doesn’t mean it will persist.

The death of the subscription would cause publishers a wide range of problems. Many have grown accustomed to the cashflow benefits of charging a year in advance, which will be a difficult habit to give up, especially if they were one of the previously lucky ones who got more than half their subs revenue in January, and used it to generate further revenue through reinvestment.

In death, there is hope

However, a move to a more fluid subscriber base could give publications the chance to grow more quickly – by attracting large numbers of people paying smaller amounts. A closer correlation between immediate publishing record, recommendation by shared links, and the revenue received in a particular month should sharpen the editorial mindset, and at least give them the chance to more directly influence the corporate revenues in a way they should be more comfortable with than negotiating advertorial, or sponsored supplements.

It would be a return to the basic editorial values of providing useful, exclusive, time-sensitive content. Perhaps that would be no bad thing.