Paywall Champions And Skeptics At Crossroads

Michael Hedges July 15, 2013 Follow on Twitter

Every new path bares exploration in the search for that digital dividend. The straight and narrow gives way to the winding and worrisome. No ideas are bad but some can go terribly wrong. Sifting through the good, the bad and, yes, the ugly, of online revenue models keeps the conference venues filled.

With considerable baited breath UK media watchers and, presumably, online news readers await the latest paywall, this time from the Sun tabloid. Owner News UK, formerly known as News International and part of the new News Corporation, will put online site Sun+ behind a paywall August first as it did for the Times and Times on Sunday portals nearly three years ago. Waiting, too, are several big UK advertisers including Tesco until a proven readership is measured, reported the Guardian (July 12).

“It would be nice if other media houses introduced paywalls,” said 20 Minuten (Switzerland) new media chief Sandro Albin with some glee at the Werbeplanung.at-Summit in Vienna last week. “If anything, it plays into our hands when others do it.” 20 Minuten is a free sheet published by Tamedia.

Paywalls – from simple to complex – raise all sorts of arguments, some practical and others philosophical. Both skeptics and believers admit that content producers are in the trial and error phase of online revenue development. Believers hold to the consumer value model, people will pay for high quality online content. “The digital age is a paradise,” said Zeit Verlag managing director Rainer Esser in the Vienna media conference keynote. “Our business is journalism and not printing paper.”

Skeptics, in abundance at the media conference, aren’t sure paradise is at hand. “There is no willingness to pay for something that exists on every street corner,” said Styria Media Group digital business manager Peter Neumann. The “success” of the New York Times or Wall Street Journal metered paywalls doesn’t easily migrate to Europe, he said, because of language; two billion English speakers worldwide versus 100 million German speakers. “I do not believe that a national paywall works,” said Mr. Neumann, quoted by Horizont (July 11).

Even within the German speaking markets, online users have many free online options. There are too many “escape possibilities,” said public broadcaster ORF digital chief Karl Pachner. Public broadcaster’s online and mobile portals are often targets of extreme derision from publishing houses.

One online business model on trial is the national access-point of Piano Media, the two-year old Slovak start-up and darling of the publishing universe. Like all paid content models, exclusivity is the marketing hook. When a certain tipping point of content is offered within a cohesive market, online users either subscribe or face no access.

CEO Tomas Bella has been reserved at revealing subscriber details for the business in Slovakia, Slovenia and Poland. Publishers using the Piano Media portals, in recent months, have experimented considerably with access limitations. A pay-per-article option “is not expected,” he told the media conference, quoted by derStandard (July 11), as the model seeks long-term user commitment. Mr. Bella stressed the platform’s technical component, “loopholes” to access must be closed.

Paywalls, one variety or another, have hard-core supporters, all on the conference circuit. “If your purpose contemplates still being here in five to ten years time, then the choice seems clear: it is better to sacrifice reach and preserve sustainable profitability,” intoned new News UK CEO Mike Darcey at the Times CEO Summit, quoted by pressgazette.co.uk (July 2). “Moreover, when we sacrifice this so-called reach, what have we really lost?  A long tail of passing trade, many from overseas, many popping in for only one article, referred by Google or a social media link, not even aware they are on a Times or a Sun website, wholly anonymous. That passing trade was good for the ego, if unique user stats do that for you, but they don’t really add to our purpose at all.”

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