4 ms·

Daring Fireball: Pay Walls

41 points by sant0sk1 17y ago

andreyf 17y ago
I see a different problem: if there were a one-click paywall of $0.25 for a single story (without ads) on NYTimes.com, given a one-paragraph "abstract" of the content, I'd probably pay it several times a day, much more than I'd ever pay for a single newspaper. So based on my own (imagined) behavior, I'd hypothesize the problems of newspapers could largely be solved with micro-payments.
- Derferman 17y ago
  The problem I see with a setup like this is piracy. It only takes one person to pay $0.25 and put the text up on github/scribd/pastie or any of the hundreds of services available.
  - natrius 17y ago
    Google indexes the internet in near real time. Pay Google to monitor for copyright infringement for you. Regardless, I don't think the random copies are that big of a deal. The only time something material is lost is when a copy gets posted to reddit or digg instead of the original. Few people are going to come across random copies of articles in obscure corners of the internet without direction.
    - chollida1 17y ago
      > Google indexes the internet in near real time. Technically Google only index's top sites in near real time. CNN might be walked many times a day, but if you think that every blog or torrent site gets walked even close to a fraction as often then your mistaken.
      - natrius 17y ago
        I'm assuming many newspapers are among those top sites.
  - deleted 17y ago
    [deleted]
- mechanical_fish 17y ago
  I'd hypothesize the problems of newspapers could largely be solved with micro-payments. This has been the Business Plan of the Future for at least the last fifteen years. This Clay Shirky essay is getting on towards nine years old: http://openp2p.com/pub/a/p2p/2000/12/19/micropayments.html http://openp2p.com/pub/a/p2p/2000/12/19/micropayments.html ... and yet the counterexamples are still pretty thin on the ground. Where is the newspaper that thrives on micropayments? It's not like nobody has had the time to try it yet.
- Adam503 17y ago
  Nobody is going to take the time to go through a complex credit card transaction in order to pay a dime or a quarter to read a newspaper. If the transaction is anything easier than a credit card transaction to process, it's not gonna be secure. There might be some attempt at some "no bother" microtransactions systems, until people start getting microbills from Kiev for 3,780,000 nickles for micro-porn. Ooops. I figure these microtrasaction system got about 6 months before Ukrainian hackers have figured out how to buy BMWs with nickles
- eli 17y ago
  Would you really pay $0.25 for the Washington Post's story about a new healthcare plan when The Politico or CNN has a similar story for free? At best, this would only work for really "important" stories. Very few people are going to pay $0.25 to read an obit or a restaurant review. Frankly, I think this approach is far worse than a flat subscription. And $0.25 is way to high. I would probably switch to a (lesser) news site that was free rather than pay a fee for 95% of the stuff out there.
omouse 17y ago
It would just make things worse. If the Times and/or Post were to erect a pay wall, I see things playing out as follows: they lose most of their readers Why? People pay $$ for the content that just happens to be in newspaper form. They also pay for content that just happens to be on the TV. Why wouldn't they pay on the Web? OH THAT'S RIGHT! Because everyone expects everything for free! We're all a bunch of freeloaders that don't even want to pay for valuable content.
- steveklabnik 17y ago
  I feel like you're being sarcastic, but regardless: It comes down to scarcity. A physical paper is a good. You're not buying the news, you're buying a paper. People buy cable subscriptions because there aren't any good free alternatives. But news on the Internet? There are _thousands_ of places to get that. And most of them are free. The Times and the Post don't have enough added value to justify the cost.
- andrewtj 17y ago
  They would not pay because by and large the content on the sites in question is available elsewhere in one form or another for free. That doesn't indicate that the readership are "freeloaders" (which implies they're somehow taking advantage of the newspapers generosity) — that's people deciding they'd rather not give away their money. It's a value proposition - the newspapers who do not make money on the web do not offer something unique to their readership and hence their advertisers.
deleted 17y ago
[deleted]
zach 17y ago
Since cable was mentioned, it got me thinking. Is there no service in the US that will provide you cable TV channels over the internet? ...Okay, after searching, there seems to be backspace.tv which is sketchy as anything. Anyone heard of this? Does this happen in other countries? A custom-picked lineup for $20-$30 a month over Boxee or a Slingbox or a Roku/Netflix box, etc. would compare well to $50-$60 plus endless taxes for channels you never watch and a clunky set-top box. Maybe you could start with sports or foreign channels to avoid vertical collusion problems from channel providers. Okay, but maybe we should wait until Verizon rolls out fiber optic to more of the USA before cutting them off at the knees like that. They are depending on everyone to buy overpriced TV service to pay for all that fiber, after all.
- mcav 17y ago
  I'd love to be able to pick a couple channels (Discovery, History Channel, SciFi[1]) and pay for them as online streams. I have no use for 60+ channels; I only like a few. [1] "SyFy", I guess now, which just seems strange.
- allenbrunson 17y ago
  This is what Zattoo is supposedly working on. http://en.wikipedia.org/wiki/Zattoo http://en.wikipedia.org/wiki/Zattoo They've been trying to expand into the U.S. for at least a year now, but it hasn't happened so far.
mediaman 17y ago
The problem facing the newspaper industry is a similar problem facing the airline industry. It is one reason why the airline industry has had terrible economics since Kitty Hawk. At first, the newspaper business model was this: there were many competitors, and each competitor faced a mix of fixed costs (staff, printing facilities) and variable costs (paper, ink, delivery). All was fine, because nobody would give away product that had real cost associated with it. But then the variable cost disappeared. No more paper, no more ink, no more delivery. Suddenly, the only thing left was fixed costs. And all the competitors realized they could start undercutting the next guy, while still making some infinitesimal incremental profit on each viewer. Of course, that incremental profit does not amount to enough to pay for all those fixed costs (staff) that still exist. And hence the problem we have today. Airlines face the same problem. Fixed schedules and a low cost per incremental seat. So there are always price wars going on to "buy" seats from competitors. But then they can't make up for their fixed costs, and they go out of business. Without the introduction of variable costs into web content, the newspaper industry will resemble the airline industry: it will rarely make money, and, on net, probably destroy most shareholder dollars invested in it. People will keep talking about erecting pay walls, or fixing the system, but there will always be the next guy who will be willing to provide the same thing for free to grab all those viewers.
- alanthonyc 17y ago
  There is a fundamental flaw in your analogy: airlines are selling actual scarce goods (limited seats on a plane). Newspapers, as they are today, aren't really selling anything. Fact: News existed before newspapers. Fact: News will exist after newspapers. The "news industry" has never been in the business of creating anything. They were simply in the "fact distribution" business. Facts used to travel more efficiently via the newspaper than any other means (gossip, telephone, even television). But now that distribution costs on the internet are virtually nil, they can no longer make money by exploiting inefficiencies. This is the reason that Simon's plan is never going to work. If they try it, they'll go out of business just that much sooner. There are publications that still make money off subscriptions. The Economist is the shining example (I even subscribe, for a pretty substantial fee). The value in their publication is in their analysis of the facts. Everybody will know the same things pretty quickly. However, not everyone will come to the same conclusions. Those conclusions are what they should be charging for, not the facts.
9oliYQjP 17y ago
Honestly, I'm pretty damn sure 10 years from now my ISP subscription fee will include a bundling of access to websites. It will be AOL all over again. The problem with subscriptions is the way they're implemented now, not that people find them fundamentally unappealing. It's just that, when I run up against a pay wall for a specific story as I try to click through to it, I don't see the value proposition in subscribing to the entire website. I just want my damn story, and I'm not getting it. That is just frustrating. Back in the day that AOL was a walled garden with custom content, the value proposition for signing up was simple. They did all the work of making sure content was available just to you, and you handed over your subscription fee to one entity. Done and done. If AOL had been implemented as a hodge podge of pay-as-you-go islands of content, it wouldn't nearly have been as successful.
lallysingh 17y ago
I've subscribed to online newspapers on and off for a few years. Frankly for the ones I read daily, $30-50/year isn't a big deal. Outside that, all I'm missing is access to specific articles on other papers I don't subscribe to. Couldn't that be done with per-article fees covered by newspapers I subscribe to? For example, say I subscribe to the NYT. With that subscription, I also got 100 article credits/year to read from the economist, wsj, etc. And visa-versa.
Empact 17y ago
David Simon needs to read "The Innovator's Dillemma." This sort of approach is exactly what dooms most established companies to bankruptcy in the fact of disruptive innovation. Information, particularly mass information is now cheap, and those high margins are completely and irreversibly gone. Money is still there to be made, as the many full-time bloggers can tell you. But it won't be enough to staff the newsroom floor. That work will be distributed.
wendell 17y ago
"What feels like a fair price for a copy of a web page, on the other hand, is nothing. They’re just ones and zeroes." Really? Mac OSX is just ones and zeros. Does Gruber think that, along with all other forms of commercial software or anything else that can be digitized, be free?
- allenbrunson 17y ago
  I don't think Gruber was arguing from his own position there. He's talking about the way most people think.
dlevine 17y ago
One BIG problem with charging for online newspaper access is that it's currently given away for free. Once you give something away, people react very badly if you start charging for it (eg Jot). This mistake has killed a number of software companies over the years. Look at TimesSelect - that was a stunning failure. If they want to subscribe, the newspapers need to figure out how to sell something that they haven't already given away for free. Wish I could tell you what that is, because they already give everything away. The only other option would be to figure out a new way to make money off their content.
olefoo 17y ago
One thing that has struck me about paywalls is that the implementation of them for newspaper websites is almost always entirely backwards. Usually even the most fanatically subscription driven news organizations offer some of their content for free to potential subscribers as a taster. And it's usually the most recent items. It's always seemed to me that the right way to set up paid access is to charge for the freshest articles and leave the archives open with ads and various longtail merchandising. I think that would make more sense to most people, if they click to a site and can browse the archives at will, but when the try to read todays headlines they get the "This story will be free to the public in $d days $h hours and $m minutes."

41 points by sant0sk1 17y ago

I see a different problem: if there were a one-click paywall of $0.25 for a single story (without ads) on NYTimes.com, given a one-paragraph "abstract" of the content, I'd probably pay it several times a day, much more than I'd ever pay for a single newspaper. So based on my own (imagined) behavior, I'd hypothesize the problems of newspapers could largely be solved with micro-payments.

Derferman 17y ago
The problem I see with a setup like this is piracy. It only takes one person to pay $0.25 and put the text up on github/scribd/pastie or any of the hundreds of services available.
- natrius 17y ago
  Google indexes the internet in near real time. Pay Google to monitor for copyright infringement for you. Regardless, I don't think the random copies are that big of a deal. The only time something material is lost is when a copy gets posted to reddit or digg instead of the original. Few people are going to come across random copies of articles in obscure corners of the internet without direction.
  - chollida1 17y ago
    > Google indexes the internet in near real time. Technically Google only index's top sites in near real time. CNN might be walked many times a day, but if you think that every blog or torrent site gets walked even close to a fraction as often then your mistaken.
    - natrius 17y ago
      I'm assuming many newspapers are among those top sites.
- deleted 17y ago
  [deleted]
mechanical_fish 17y ago
I'd hypothesize the problems of newspapers could largely be solved with micro-payments. This has been the Business Plan of the Future for at least the last fifteen years. This Clay Shirky essay is getting on towards nine years old: http://openp2p.com/pub/a/p2p/2000/12/19/micropayments.html http://openp2p.com/pub/a/p2p/2000/12/19/micropayments.html ... and yet the counterexamples are still pretty thin on the ground. Where is the newspaper that thrives on micropayments? It's not like nobody has had the time to try it yet.
Adam503 17y ago
Nobody is going to take the time to go through a complex credit card transaction in order to pay a dime or a quarter to read a newspaper. If the transaction is anything easier than a credit card transaction to process, it's not gonna be secure. There might be some attempt at some "no bother" microtransactions systems, until people start getting microbills from Kiev for 3,780,000 nickles for micro-porn. Ooops. I figure these microtrasaction system got about 6 months before Ukrainian hackers have figured out how to buy BMWs with nickles
eli 17y ago
Would you really pay $0.25 for the Washington Post's story about a new healthcare plan when The Politico or CNN has a similar story for free? At best, this would only work for really "important" stories. Very few people are going to pay $0.25 to read an obit or a restaurant review. Frankly, I think this approach is far worse than a flat subscription. And $0.25 is way to high. I would probably switch to a (lesser) news site that was free rather than pay a fee for 95% of the stuff out there.

omouse 17y ago

It would just make things worse. If the Times and/or Post were to erect a pay wall, I see things playing out as follows: they lose most of their readers Why? People pay $$ for the content that just happens to be in newspaper form. They also pay for content that just happens to be on the TV. Why wouldn't they pay on the Web? OH THAT'S RIGHT! Because everyone expects everything for free! We're all a bunch of freeloaders that don't even want to pay for valuable content.

steveklabnik 17y ago
I feel like you're being sarcastic, but regardless: It comes down to scarcity. A physical paper is a good. You're not buying the news, you're buying a paper. People buy cable subscriptions because there aren't any good free alternatives. But news on the Internet? There are _thousands_ of places to get that. And most of them are free. The Times and the Post don't have enough added value to justify the cost.
andrewtj 17y ago
They would not pay because by and large the content on the sites in question is available elsewhere in one form or another for free. That doesn't indicate that the readership are "freeloaders" (which implies they're somehow taking advantage of the newspapers generosity) — that's people deciding they'd rather not give away their money. It's a value proposition - the newspapers who do not make money on the web do not offer something unique to their readership and hence their advertisers.

deleted 17y ago

[deleted]

zach 17y ago

Since cable was mentioned, it got me thinking. Is there no service in the US that will provide you cable TV channels over the internet? ...Okay, after searching, there seems to be backspace.tv which is sketchy as anything. Anyone heard of this? Does this happen in other countries? A custom-picked lineup for $20-$30 a month over Boxee or a Slingbox or a Roku/Netflix box, etc. would compare well to $50-$60 plus endless taxes for channels you never watch and a clunky set-top box. Maybe you could start with sports or foreign channels to avoid vertical collusion problems from channel providers. Okay, but maybe we should wait until Verizon rolls out fiber optic to more of the USA before cutting them off at the knees like that. They are depending on everyone to buy overpriced TV service to pay for all that fiber, after all.

mcav 17y ago
I'd love to be able to pick a couple channels (Discovery, History Channel, SciFi[1]) and pay for them as online streams. I have no use for 60+ channels; I only like a few. [1] "SyFy", I guess now, which just seems strange.
allenbrunson 17y ago
This is what Zattoo is supposedly working on. http://en.wikipedia.org/wiki/Zattoo http://en.wikipedia.org/wiki/Zattoo They've been trying to expand into the U.S. for at least a year now, but it hasn't happened so far.

mediaman 17y ago

The problem facing the newspaper industry is a similar problem facing the airline industry. It is one reason why the airline industry has had terrible economics since Kitty Hawk. At first, the newspaper business model was this: there were many competitors, and each competitor faced a mix of fixed costs (staff, printing facilities) and variable costs (paper, ink, delivery). All was fine, because nobody would give away product that had real cost associated with it. But then the variable cost disappeared. No more paper, no more ink, no more delivery. Suddenly, the only thing left was fixed costs. And all the competitors realized they could start undercutting the next guy, while still making some infinitesimal incremental profit on each viewer. Of course, that incremental profit does not amount to enough to pay for all those fixed costs (staff) that still exist. And hence the problem we have today. Airlines face the same problem. Fixed schedules and a low cost per incremental seat. So there are always price wars going on to "buy" seats from competitors. But then they can't make up for their fixed costs, and they go out of business. Without the introduction of variable costs into web content, the newspaper industry will resemble the airline industry: it will rarely make money, and, on net, probably destroy most shareholder dollars invested in it. People will keep talking about erecting pay walls, or fixing the system, but there will always be the next guy who will be willing to provide the same thing for free to grab all those viewers.

alanthonyc 17y ago
There is a fundamental flaw in your analogy: airlines are selling actual scarce goods (limited seats on a plane). Newspapers, as they are today, aren't really selling anything. Fact: News existed before newspapers. Fact: News will exist after newspapers. The "news industry" has never been in the business of creating anything. They were simply in the "fact distribution" business. Facts used to travel more efficiently via the newspaper than any other means (gossip, telephone, even television). But now that distribution costs on the internet are virtually nil, they can no longer make money by exploiting inefficiencies. This is the reason that Simon's plan is never going to work. If they try it, they'll go out of business just that much sooner. There are publications that still make money off subscriptions. The Economist is the shining example (I even subscribe, for a pretty substantial fee). The value in their publication is in their analysis of the facts. Everybody will know the same things pretty quickly. However, not everyone will come to the same conclusions. Those conclusions are what they should be charging for, not the facts.

9oliYQjP 17y ago

Honestly, I'm pretty damn sure 10 years from now my ISP subscription fee will include a bundling of access to websites. It will be AOL all over again. The problem with subscriptions is the way they're implemented now, not that people find them fundamentally unappealing. It's just that, when I run up against a pay wall for a specific story as I try to click through to it, I don't see the value proposition in subscribing to the entire website. I just want my damn story, and I'm not getting it. That is just frustrating. Back in the day that AOL was a walled garden with custom content, the value proposition for signing up was simple. They did all the work of making sure content was available just to you, and you handed over your subscription fee to one entity. Done and done. If AOL had been implemented as a hodge podge of pay-as-you-go islands of content, it wouldn't nearly have been as successful.

lallysingh 17y ago

I've subscribed to online newspapers on and off for a few years. Frankly for the ones I read daily, $30-50/year isn't a big deal. Outside that, all I'm missing is access to specific articles on other papers I don't subscribe to. Couldn't that be done with per-article fees covered by newspapers I subscribe to? For example, say I subscribe to the NYT. With that subscription, I also got 100 article credits/year to read from the economist, wsj, etc. And visa-versa.

Empact 17y ago

David Simon needs to read "The Innovator's Dillemma." This sort of approach is exactly what dooms most established companies to bankruptcy in the fact of disruptive innovation. Information, particularly mass information is now cheap, and those high margins are completely and irreversibly gone. Money is still there to be made, as the many full-time bloggers can tell you. But it won't be enough to staff the newsroom floor. That work will be distributed.

wendell 17y ago

"What feels like a fair price for a copy of a web page, on the other hand, is nothing. They’re just ones and zeroes." Really? Mac OSX is just ones and zeros. Does Gruber think that, along with all other forms of commercial software or anything else that can be digitized, be free?

allenbrunson 17y ago
I don't think Gruber was arguing from his own position there. He's talking about the way most people think.

dlevine 17y ago

One BIG problem with charging for online newspaper access is that it's currently given away for free. Once you give something away, people react very badly if you start charging for it (eg Jot). This mistake has killed a number of software companies over the years. Look at TimesSelect - that was a stunning failure. If they want to subscribe, the newspapers need to figure out how to sell something that they haven't already given away for free. Wish I could tell you what that is, because they already give everything away. The only other option would be to figure out a new way to make money off their content.

olefoo 17y ago

One thing that has struck me about paywalls is that the implementation of them for newspaper websites is almost always entirely backwards. Usually even the most fanatically subscription driven news organizations offer some of their content for free to potential subscribers as a taster. And it's usually the most recent items. It's always seemed to me that the right way to set up paid access is to charge for the freshest articles and leave the archives open with ads and various longtail merchandising. I think that would make more sense to most people, if they click to a site and can browse the archives at will, but when the try to read todays headlines they get the "This story will be free to the public in $d days $h hours and $m minutes."