The big trend in the media (in 2011) will be the return of the paywall, as an increasing number of websites ask users to pay. The most prominent example will be the New York Times, which will switch on a new paywall in January or February, but by April several dozen other American newspapers will have followed suit, says Ken Doctor, a media-industry analyst and the author of “Newsonomics”.
This is, in part, a response to the iPad. Publishers are keen to exploit readers’ apparent willingness to pay for content on mobile devices (they pay for music, games and other apps, after all). But it is difficult to justify charging for content on a tablet computer if you are also giving it away on the web.
A deeper reason for the sudden appearance of paywalls in 2011 is that publishers are at last admitting that web-based advertising revenue will not cover their costs, and so they will have to start charging readers.
At one extreme are very strict paywalls like that of the London Times: only paying subscribers are allowed to see articles, which are even hidden from internet search engines. At the other extreme are newspapers that give everything away and allow anyone to read anything, in order to attract as many readers (and hence advertisers) as possible. There is lots of middle ground. The favoured model is now a “metered” paywall that lets users read a limited number of articles without paying, but asks for payment if they go beyond that number. The advantage of this approach, which was pioneered by the Financial Times and is being adopted by The Economist, is that publishers can “turn the dial” to adjust how many free articles readers are allowed to see, depending on the market conditions.
That does not mean that paywalls will save newspapers, however. A study of British newspapers by Enders Analysis, a consultancy, found that online subscribers produce less than one-third as much revenue as print subscribers.
Read more at The Economist
