The Reasoned Review

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Paywalls and Micropayments

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Ebert has a really good summary of the difficulties in making money on the web. The Columbia Journalism Review has a 10,000 word treatise on the subject if you’re interested, but Ebert’s article is almost as good at 1/10th the length.

The thing about the money is that he’s not making any. He observes that the only people who are able to reliably generate income from subscriptions are the purveyors of online pornography, quoting one of his friends as saying “if there’s one thing you can put behind a firewall, its porn.” True enough, but it does little to help those pursuing more chaste online ventures.

Roger Ebert is undoubtedly the most-read movie critic on the web. His pageviews probably make up half of those of the whole Chicago Sun-Times. He complains, in his post, that his advertisements don’t generate any kind of sustainable income, and he wonders what this betokens for art of newspapering.

The consensus among newspapers at this point is that it’s impossible to run a free, quality newspaper solely on online advertising revenue. Print circulations are dwindling, and they’re not coming back. Ebert outlines the two major proposed solutions: Paywalls – charging a monthly fee for unlimited access to the site – and Micropayments – a pay-per-article scheme.

Each has its success story; The Wall Street Journal has been behind a partial paywall for years, and it has more than a million subscribers. The Financial Times has exploited a micropayment scheme quite successfully. But those papers cover a very narrow niche, and one for which wealthy people are willing to pay a premium. Their business reporting simply cannot be got elsewhere. Would the same sort of demand exist for mainstream general papers like, say, The New York Times?

It would seem not. The Times, for its part, will institute a paywall next year. According to their official communiques, which have been contradictory and misleading, they plan to utilize a sort of “porous paywall”, wherein every IP address gets a few free articles and articles that they arrive at from other sites (following a link from this blog, for instance), will also be free. It remains to be seen how they will be able to prevent this system from being abused (I can think of a thousand ways), but assuming they set their programmers to devise some safeguard, and judging from their aborted TimesSelect project, I estimate they will net approximately 300,000-400,000 subscribers.

I am not in a position to state whether or not this will be enough. And as Ebert mentions in his article, the likelihood is that The Guardian will become the next online “newspaper of record” if the Times should disappear completely behind a paywall – a vast improvement, in my opinion. But if The Guardian goes? Well, then The Washington Post perhaps, though I shudder to think it, or maybe The London Times or The Los Angeles Times.

Can all these papers survive by online subscription? There is reason to think they cannot. And if they can’t, the logical conclusion betokens a further corporatization of the press. The only sites that will be able to staff full-time reporters are the ones who either find a benefactor, or are large and established enough to make a living from paywalls and micropayments. The problem of how a writer can earn an honest living remains unsolved.

Interestingly enough, George Orwell wrote of the same problem more than 60 years ago, in 1946. In his essay The Cost of Letters, he concludes that a “serious” writer must necessarily be a pauper – either that or resort to hackwork. I suppose it is comforting to know things have not changed very much since then.

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Written by pavanvan

March 5, 2010 at 11:30 pm

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