Paywalls and online news provision

Earlier today, I was, with Leif Beck Fallesen (from Borsen) and Jens Nicolaisen (from Jyllands Posten), part of a discussion of paywalls and online news provision on the Danish radio program Mennesker og Medier, one of my favourite forums for media commentary and conversation.

I’m not going to try to summarize the points made by Fallesen and Nicolaisen, but just recommend the program to those who understand Danish. I was particularly struck by Fallesen, who compared contemporary experiments with various forms of online payments to soldiers rushing out of their trenches during the first world war—a few will emerge as heroes, but most will perish. I have these images in my mind now of salt-and-pepper haired, slightly overweight media executives in suits and ties being gunned down in the mud of Flanders—it is not a pretty sight, I assure you.

I focused on two basic points during our conversation.

1) Do experiments with paywalls suggest the end of free content? No.

Contrary to the scenario suggested by Chris Anderson from Wired, I don’t believe that the largely free flow of news on the web as we know it is dead and about to be replaced wholesale by services paid for by subscription or fees. Free and paid content will continue to coexist. I offered three reasons that pertains to news specifically:

First, as long as just some of the many, many players competing for people’s time and attention remain wedded to the idea of offering content free of charge online (as radio and television channels have long done offline, and freesheets more recently have done in print), it will require high degrees of editorial differentiation to convince people to pay for precisely your product and not simply go for the free alternative. This is doable for unique and high-value content such as the business coverage provided by newspapers like Borsen (a local Danish parallel to the Wall Street Journal or the Financial Times) and for a quality cable entertainment channel like HBO, but hard for general interest news organizations like Jyllands Posten.

Second, even if the problem of competition was momentarily bracketed out and an entire industry did start charging at the same time, the incentive for any one player to break the covenant and go free to maximize traffic and live of the advertising revenue will be immense—pace what social scientists call collective action problems. (And that is without even factoring in anti-trust regulation). Alan Rusbridger’s strategy of mutualisation at the Guardian no doubt has much to do with a genuine, normative commitment to open and collaborative forms of news production, but he clearly also sees the business potential in remaining free when others start charging.

Third, in most of Europe, commercial news organizations considering paywalls aren’t only competing with each other, with user-generated content (think of those adorable puppies on YouTube, and all those interesting blogs), and with all the other temptations that lurk online and offline for your time and attention. They are also competing with public service media organizations that are likely to continue to offer comparable content for free through a number of online services. So even in countries where the competition amongst commercial operators is perhaps less fierce than in, say, the UK, the presence of public service players complicates moves towards pay models.

In short: Free was here before the internet and the web, free is here now, and free will be here tomorrow. Free is not for everyone and everything, but free is here to stay. I’m tempted to say simply “deal with it,” but I don’t want to suggest I’m entirely insensitive to the business challenges and human costs of the current convulsions, so I won’t put it quite like that.

2) What will replace old business models? Ask Clay Shirky

Much of the conversation circles around how news organizations can generate “enough” revenue to maintain their current level of operations, how they can “replace” what is being lost. Clay Shirky would say that “nothing” will replace what we have known in the past. I don’t know quite what “enough” means here (commercial media in different countries have existed for decades with wildly different levels of income, advertising revenues per capita in Southern Europe, for examples are much lower than those in Northern Europe—and yet they have media there too.). I don’t think replacement is what we should be looking for, as much as innovation, progress, experimentation.

Nicolaisen used the metaphor of a “mosaic” to explain his approach to building online business for Jyllands Posten, and I think this image of a radically diversified media organization is very fitting. Fallesen is in a different position, as the editor and CEO of a niche product he can continue to focus on serving his (relatively limited and clearly defined) targeted audience. Both of their companies, a mass market newspaper moving towards a future role as a multimedia organization servicing different needs for a range of different audiences, and a niche newspaper moving towards servicing their niche audience across a wide range of platforms are in a different position from where a large broadcaster would be, in particular a public service media organization.

But the general trajectory suggests a further reason to give up many of our inherited notions and the tendency to discuss what will be in terms of what has been: in much of the post-industrialized world, we’ve grown up with media systems where many different people got news in fairly comparable and standardized ways, read similar newspapers, listened to the same radio programmes, and saw (some) of the same stuff on television. Not quite the undifferentiated mass society of early twentieth-century sociology, but with elements of it. We sometimes forget that that is a historical anomaly—the farmer and the merchant did not get their news the same way in 1850, and even if they did in 1950, they probably won’t in 2050. As many scholars have argued, the mass audience may be coming to an end as we move towards a more segmented media landscape, with potentially profound consequences for our democracies.

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One response to “Paywalls and online news provision

  1. Pingback: PR, Communication, and Marketing trends 2011 – part 2 | MyNewdesk

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