Creating paywalls

Starting March 28th, The New York Times is going to go behind a paywall, again – with a lot of caveats. Free access every month for the first 20 articles, videos or interactive features. An experiment in 2005, Times Select,  where you could read all the articles, except the Op-ed, was abandoned in 2007. Since then, the Times archive and the newspaper are essentially free, subsidised by online advertising. There is no argument with the fact that customers need to pay. The quality of writing and the range of subjects covered at the Times are well worth the money. The only question is whether people have got options that make payment unpalatable. The Times now has traffic of over 30 million readers every month from across the world. The estimate is that they hope to convert 300,000 into paying ones – about 1%. Now that may not seem like much, but that could mean a lot more revenue. Opinion inside is also clearly divided on the way forward – but unless new payment options are tried, the loss of revenue from the dwindling sales of the real world newspaper will not be made up.

The argument against paying for online access is that it does not cost anything beyond salaries currently being paid. But bandwidth, security and setting up a robust infrastructure at this scale costs money. And where does that come from? Focus groups have been very positive about paying for content, especially on multiple devices – but focus groups are not real customers. Spending $50 on a night out is fine but paying $15 for a whole month of access is iffy. And for a whole year, it’s anywhere upwards of $200. For India, that’s a lot of money to pay and read. Annual costs for newspapers is rarely more than $15- $20.

The Wall Street Journal has been the only online news portal that has managed to get a decent number of subscribers.- and so has the Financial Times. The other problem with going behind a paywall is the huge loss in traffic – and the chatter in blogs, forums and social networks. The Times has said the monthly free limit does not apply for articles linked to from social networks. Now this will give Facebook a lot more leverage and traffic, not that it is starved of either. The Times experiment will be watched with considerable interest. If it succeeds, a lot of other sites will summon the courage. And that could mean that the free ride on the internet that lasted for over a decade is over.  The ‘pay gardens’ will blossom and a lot of those who cannot afford them will be shut out, especially from countries outside the US