One last word on paywalls

Since I’ll be working for John Paton, I no longer need to argue against paywalls. He seems to be on the same page.

And frankly, it’s a boring subject and I’m tired of it. If a paywall works for you, go for it. But I don’t think it will if you are thinking about the long run.

You see, the companies I’ve worked for have always implied that being against a paywall was somehow being against making more money.

Quite the opposite. I’m not against paywalls because I care about open communities and networks on the web. I do care, but I just think paywalls are a bad business decision.

Paywalls just don’t recognize the the social and economic changes that the web has caused. Even if it has been said a million times that “distribution has been democratized”, or that “we are no longer in a world of scarcity but abundance”, it just doesn’t seem to sink in.

Publishers still think they can somehow manipulate the markets. Having the power to influence people for so long has now made it impossible for many publishers to see that they no longer hold the keys. The transfer of control has occured and is in the hands of the people. The mob rules Rome.

For most people that read this blog, I’m just preaching to the choir, but one last analogy to perhaps make it clear and then on to more productive things like the Citizens Agenda Project with The Guardian, Digital First Media and NYU.

One of the best arguments I’ve heard for paywalls is the fact that “no one else does what we do.” They can’t get this anywhere else, so they will pay.

Well, that may or may not be true, but let’s say it is, since in many local news communities the local newspaper is the only one sending a reporter to the City Council meeting and writing about it.

That’s a great service.

But imagine if this were television.

You have only five channels and you are the only one doing local news. Your market share is 20%.

In comes Cable TV and suddenly there are 100 channels. You are still the only one that does local news. Even so, you found out your share dropped, you average price for an ad is dropping. All of this even though you are gaining in total number of viewers. Yes, they are spending less time on your channel than they used to.

Suddenly, there are millions channels. A few of them do something similar to you, though not as well. You get the picture.

The quality of what you do hasn’t changed. You are still the only one doing it. But the value of any single channel for any single individual has declined. It’s probably not in your best interest to be one of the only ones charging for what you do.

Add to that fact that growth is still exploding and you might be adding friction to what share you will eventually have if things ever settle.

So if you put up a metered paywall, you may find that you retain most of your traffic in the short term and even make more money in the short term.

But you may look back years from now and wonder what you could have been.

This isn’t something that only pertains to the news industry. Learn from Microsoft. Their control of the desktop and office apps made them late to the internet party, too.

Incumbents don’t disrupt. But if they react quickly enough they can stay in the ever changing game. if they insist on clinging to the old rules, they will certainly go extinct.

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