Debunking The Logic In Favor Of Paywalls

from the big-money-fail dept

This is a guest post from regular commenter, Ima Fish, and is cross posted from his own blog:

Marion Maneker over at the Big Money website wrote a piece entitled "The Weird Logic of Paywall Challengers."  He attempts to show that the arguments used by those against paywalls are illogical.  He also attempts to show that paywalls are not only a good idea but a necessity for news websites.

First, a little background.  Some internet news sites are making people pay to view content.  That's called a paywall.  You can't view the content without paying.  So far the attempts to implement paywalls have been complete failures.  For example, when Newsday set up a paywall, only 35 people paid.  After the Times instituted a paywall, its readership dropped by 2/3rds.  And because those articles are not being indexed by Google (or Bing or Yahoo), they're essentially invisible to people on the web.

So what's Maneker arguments in favor of paywalls? What errors in logic have those against paywalls made? Let's go through his points.

His first point is that even if ad revenues are back, news outlets should diversify by charging anyway.  He doesn't seem to get this, but as I explained above, paywalls kill off advertising by driving viewers and readers away.  So Maneker's argument that news outlets should diversify by relying on both advertising and paywalls fails as it is self contradictory. 

His second point is that news outlets charging "for content has always been part of its long-term strategy."  He's absolutely right that newspapers have tended to charge for content. However, that was never done for profit. Profits always came from advertising, classifieds, and obituaries. 

There were two reasons newspapers did charge.  The first was to cover the costs of publishing.  However, those costs no longer exist in the digital realm. 

The second reason newspapers charged was to show advertisers how many actual readers they had.  If a newspaper publisher simply gave away its papers, it could claim that millions of people are reading when in fact no one is reading.  People paying for newspapers is a pretty good indication to advertisers that people are in fact reading.  But in the digital realm news outlets do not need paying customers to tell advertisers how many unique people are reading.  All that information can be tracked automatically in real time.  Heck, in the digital realm news outlets can give specific information about page views and what ads are working and what ads are not.

His third point is that "central to any media strategy should be the idea of charging for some content."  Has he never listened to broadcast radio?  Has he never watched broadcast TV?  Has he never used Google, Facebook, or Twitter?  And despite being contradicted by legitimate business models, his third argument is circular.  He's essentially arguing that news outlets should charge for content because they should charge for content.  It only concludes its premise without telling us why.

Along with his third point he pulls the following assertion out of his ass, "Digital distribution should make content much cheaper--but it shouldn't make it free."  Why shouldn't it be free?  He never explains.

Hundreds of years ago the most efficient means to distribute news was to print it on paper and deliver it locally.  Times changed.  Radio came along and made delivering news in real time more efficient.  But it still lacked the newspaper's depth.  TV news had the same problem.  But the internet does not.  It has the efficiency, the immediacy, and the depth.  Because the distribution costs are essentially zero, economically speaking, there is no reason why the cost of the content should not also be free.

If Maneker's piece is any indication, the pro-paywallers' dream of making us pay for news is a lost cause.



Reader Comments (rss)

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  1.  
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    Frank Adams, Jul 29th, 2010 @ 10:47pm

    This doesn't make sense. Why are websites making people pay for news that they can always easily see on TV and on the paper? Actually,this paywall thing is really one nonsense thing since information are everywhere and you can get it free from many websites and blogs. I just do not understand why website owners and readers pay for such.

     

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    Rose M. Welch (profile), Jul 29th, 2010 @ 11:19pm

    Wow. I always thought that Ima was a girl. :P

     

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    grumpy (profile), Jul 30th, 2010 @ 1:16am

    They've totally lost sight of who the real customer is. News services have always served eyeballs to advertisers - providing news and entertainment is only a means to that end. Introducing paywalls is high-precision foot-shooting.

     

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    dermotb, Jul 30th, 2010 @ 1:21am

    While I agree with the theme, we must be careful not to oversell the case. Newsday is a local paper on Long Island, and anyone who has a newspaper subscription or cable is allowed free access, which according to Newsday is 75% of the locals, so there was never much scope for attracting new subscriptions. The real question is why they bothered with offering them at all.

     

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    Anonymous Coward, Jul 30th, 2010 @ 5:05am

    Re:

    Me Too !! Funny !!...

     

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    gilroy0 (profile), Jul 30th, 2010 @ 5:14am

    Also...

    His article is available for free. :)

    Snarking aside, I would never have heard of this guy if his content had been behind a paywall.

     

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    Sam I Am, Jul 30th, 2010 @ 6:09am

    a paywall by another name.

    " Because the distribution costs are essentially zero, economically speaking, there is no reason why the cost of the content should not also be free."

    Perhaps so, but only after the individual salaries and the investment in the gathering and editing infrastructure is recouped and a margin delivered back to the investor to compel that investment in the first place. Unless of course, you want 1) amateur "Gee, I wonder if this is really true?" blog-news night every night. or 2) click through advertising so thick it's a paywall by another name. If you genuinely want it free, stop complaining about the advertising.

    This post is essentially meaningless, Mike. Radio and TV advertising models are canards that were never truly free and have little bearing on this issue. This editorial avoids funding the start-up and maintenance costs of a professional news gathering organization, acknowledging only the lowered (but not free) costs of digital distribution AFTER the expensive work is already done. yawn.

     

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    crb2099, Jul 30th, 2010 @ 6:13am

    Re:

    dermotb: I live on Long Island. Trust me, Newsday's circ is NOT 75% of Long Island. MAYBE 60%, but probably more like 50%. It's funny, because I have been a Cablevision customer (the local Internet service provider, which owns Newsday) for eight years, and there are only two times I have ever gone to their site:

    1. When someone got into a car wreck and died in front of my apartment.

    2. When some friends of mine were featured in an article.

     

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    Robert McLeod, Jul 30th, 2010 @ 6:15am

    Poor assertion

    "There were two reasons newspapers did charge. The first was to cover the costs of publishing. However, those costs no longer exist in the digital realm."

    In the real world of online publishing, the one I am involved in as a publisher, costs do exist. Servers, programmers, designers, complex CRM and CMS software and the rest are the modern printing presses, paper and newstands.

    Distribution costs do exist.

    Content of course can be put behind a paywall. It just needs to be worth paying for. To be that, it needs to be unique. To be unique, you need excellent writers and experienced journalists. These are expensive. These costs also haven't disappeared in the digital realm.

    Our experience also tells us that if you get content and delivery right, readers will come. When readers come, you attract advertisers willing to pay much, much more.

    Why are most paywalls failing? The content is derivative. Hashed together from agency copy and/or inexperienced reporters and poorly edited.

    The argument that content doesn't cost anything is poorly structured and sadly woefully ill-informed.

     

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    crb2099, Jul 30th, 2010 @ 6:16am

    Re: a paywall by another name.

    you put too much faith in "professionalism." trust me, I'm a journalist. I know my industry. the "professionals," even the "veterans," are not necessarily (or even often) the best at their job.

     

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    Free Capitalist (profile), Jul 30th, 2010 @ 6:25am

    Re: Poor assertion

    costs do exist. Servers, programmers, designers, complex CRM and CMS software and the rest are the modern printing presses, paper and newstands.

    Very true. However the cost per copy goes down with every copy or hit. The number of copies could approach infinity without significant outlay beyond the initial costs of development.

    Why are most paywalls failing? The content is derivative. Hashed together from agency copy and/or inexperienced reporters and poorly edited.

    Don't forget the same or better quality product can be accessed for free elsewhere outside of a paywall.

     

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    Anonymous Coward, Jul 30th, 2010 @ 6:48am

    The Wall Street Journal and the Financial Times have figured out a way to be included in the Google search. They give a paragraph and then try to entice you to pay for the rest of it. My Google gadget still gets these assholes and I am afraid they clog it up sometimes and as a result I am seriously rethinking having the gadget at all because partial news is no news and why should I pay the greedy financial papers. Who cares if they even exist? Did they help stop the meltdown? Hell No. They rode right along with the great deception and even promoted it. Trustworthy reporting? I think not. Shut em' down. Who needs them?

     

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    Robert McLeod, Jul 30th, 2010 @ 6:55am

    Re: Re: Poor assertion

    "However the cost per copy goes down with every copy or hit. The number of copies could approach infinity without significant outlay beyond the initial costs of development."

    Almost. If only technology would STAND STILL! Our development costs are higher each year as we upgrade software, add functionality, add servers, deal with load, and on and on. And then, if only Apple wouldn't make iPads, or our subscribers wouldn't buy new smart phones, etc.

    A decent printing machine could last decades with minimal maintenance. It was also easier to value as an asset on a balance sheet.

     

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    Hephaestus (profile), Jul 30th, 2010 @ 6:58am

    Re: Poor assertion

    "Content of course can be put behind a paywall. It just needs to be worth paying for. To be that, it needs to be unique. To be unique, you need excellent writers and experienced journalists. These are expensive. These costs also haven't disappeared in the digital realm."

    It needs to make you money, cost you nothing (write off, paid for by work), get you laid, or be required for your profession. Those are the things that you can put behind a paywall.

    Stating that good writing will get people to pay is total BS.

    "Our experience also tells us that if you get content and delivery right, readers will come."

    I do have to ask "experience"??? What experience? Show me examples. If you mention the WSJ it meets two of the above criteria for charging, so skip that one.

    "In the real world of online publishing, the one I am involved in as a publisher, costs do exist."

    My suggestion is find a new line of work, or find some other way to monetize you business, writing is a loss leader. You are now competing with 6 billion other publishers.

     

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    SomeGuy (profile), Jul 30th, 2010 @ 6:58am

    I don't know. while I agree with pretty much everything you said, Ima, I read his post a little differently. Maybe it's a fine distinction, but it sounds more like he's arguing AGAINST advertising rather than arguing FOR paywalls. Paywalls just happen to be the current fashion as far as getting away from advertising is concerned.

    Like grumpy said, they've lost sight of who their real customer is/has been but -- and I know how heretical this sounds -- maybe it's because they've decided that customer is a losing bet these days.

    I still think they're dumb for doing it, and would be better off (in many ways for many reasons) increasing their readership rather than restricting it, but maybe there's a touch of misguided method to their madness.

    (Also, I don't know who this Maneker guy is, but his post struck me as generally poorly written and half-cocked...)

     

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    SomeGuy (profile), Jul 30th, 2010 @ 7:04am

    Re: Re: Re: Poor assertion

    If you're adding functionality that isn't adding value to your product, you're doing it wrong. What added development is there (aside from minimal maintenance) after you have a stable platform that supports the popular browsers?

     

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    SomeGuy (profile), Jul 30th, 2010 @ 7:08am

    Re: Poor assertion

    "Content of course can be put behind a paywall. It just needs to be worth paying for."

    Well, it needs to be worth paying for, and people need to know it's worth paying for. Even if you have the best writing in the world, if no one knows about it it's a waste. The problem is that paywalls keep people from learning about the quality of your writing -- you're asking people to give you money on the promise that your product is worth it. You're making reading your paper a gamble, where readers have to guess if it's worth money to them -- and they could guess wrong.

     

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    abc gum, Jul 30th, 2010 @ 7:21am

    Re: a paywall by another name.

    "Unless of course, you want 1) amateur "Gee, I wonder if this is really true?" blog-news night every night."

    Are you implying that professional news organisations are doing a good job providing accurate, up to date, relevant news?

     

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    Anonymous Coward, Jul 30th, 2010 @ 7:30am

    Re: Re: a paywall by another name.

    Weapons of Mass Destruction. Saddam has them! I read it in the New York Times.

     

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    Hephaestus (profile), Jul 30th, 2010 @ 7:37am

    Re: Re: Re: Poor assertion

    "Our development costs are higher each year as we upgrade software, add functionality, add servers, deal with load, and on and on."

    One word, Outsource. Using a server farm is far cheaper than doing it all in house. This way you concentrate on content and dont need to worry about the upkeep.

     

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    fogbugzd (profile), Jul 30th, 2010 @ 7:47am

    Re: Re: Re: Poor assertion

    Still "almost" correct.

    Actually the following is probably just closer to correct and is still flawed. It is based on my memories of Econ 101 which I took 37 years ago.

    "Cost per copy" or "distribution cost" is not the economic measure that drives the price of digital copies to near zero. In a pure market it is the "marginal cost" that sets the price. The marginal cost is the price of producing one more item. Sellers try to price things at average cost to maximize their profits, but consumer sovereignty drives the price to the marginal cost. The marginal cost of producing one more copy of a small digital work is about as close to zero as anything can be, hence the market price should also be near zero if you apply pure economic theory.

     

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    DNY (profile), Jul 30th, 2010 @ 7:47am

    Too clever by half advertising

    It seems to me that the urge to put up paywalls was created by content providers having tried to be too clever by half in selling online advertising, resulting in online advertising becoming if not worthless, at least worth less as a revenue source. The urge to get more revenue by having ads be adaptive (before installing AdBlockPlus, I'd get ads for Kansas businesses when reading The Times, since I'm reading it in Kansas, not London), in fact, had the opposite effed: it allows ad blocking software to easily detect and suppress advertising, since it's being inserted dynamically. So, online advertising is less valuable than paper advertising, since you can't be sure the reader will see it, and advertisers expect to pay less for it as a result.

    If news sites just "typeset" the advertisements as part of the html for the page, they will be seen--and advertisers will in short order realize this. No, The Times won't get revenue from Kansas advertisers, but it would get more from British advertisers who know that when the page loads, their ad will load and be seen by readers.

    Of course, a paywall for premium content, esp. coupled with the return to old-style advertising I advocated above, probably works as a business model. If the online version of the newspaper were available for free, but extra, say multimedia or super-indepth, news content were behind a reasonably priced paywall (cf. The Wall Street Journal), esp. if besides subscribing, one could get the content on a pay-per-view, or better pay-per-download, basis, people would pay.

     

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    Big Al, Jul 30th, 2010 @ 8:07am

    Re: a paywall by another name.

    Unfortunately you are confusing value with price (cost). Since the market value is decided by the consumer who 'knows' that web distribution is virtually free, that is the value that the consumer (customer) is going to place on your content,

     

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    tez, Jul 30th, 2010 @ 8:20am

    Re:

    ditto!

     

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    darryl, Jul 30th, 2010 @ 8:37am

    "why should news be free" or "how can news be free".

    pay to view content. 

    You pay to view ALL the content on the internet, or the radio, TV, free to air you pay..

    You pay for the internet connection, your time, your equipment, your electricity, and often your identity.

    You also pay a premium for each product you buy, that premium is to pay that company so that they can pay for that advertising.. So you pay.

    No matter how you want to spin it, you pay.

    What is worse, is that I pay for advertising, that I will not advantage from.

    If commercial companies are paying for news, then that news is most certainly going to be biased to a degree towards that company, that devalues the news they produce.

    Paywalls, have all ways been available on the internet, just like there is pay per view TV, pay for information, studies, reports, news.

    But paying the news outlet directly helps at least to ensure less commercial influence from the news they produce, as they do not have 'big advertisers' dictating what can and cannot be presented in the news.

    Would you watch a news program sponsored by BP explaining how the oil leak is actually good for the local fish population ?

    after the times instituted a paywall, its readership dropped by 2/3rds.

    So when they had 100% of people not paying, going down to 33% paying clients.
    I would take 33% of something, over 100% of nothing any day. How about you ?

    May be those other 70% that left, are the cheapskates, and if they would not pay for the news, they probably would not pay for the products advertised in the 'news'.
    "Paywalls kill off advertising by driving viewers away.
    That is an assumption, sure there may be less readers but those readers may be more prone to make purchases, so all thought the adds go to less people, they may well be just as effective.

    You can advertise roll royces to poor people, millions of them, but if they are not going to buy your product if they hear about it or not through advertising then that advertising money is waisted.

    That would mean news would or could become regional selective, and 'sponsors' of news would vary from place to place.
    The fact that the success of the news is then reliant on the effectiveness of its advertising makes it an unreliable news source.

    Also why should I pay a company to pay for news in another region, so they can use that to make a profit. But change ME MORE MONEY for doing it.

    Why should I pay more for a Mcdonnalds, because a news program is being sponsored by that company ? What If I do not watch that news program, then I am paying for something I do not use.
    So this could be called the "well give you news if you pay our tax".

    You think this system would be better, you think independent news is not necessary ?

    "
    The second reason newspapers charged was to show advertisers how many actual readers they had."

    No, you can determine readership without having to charge for papers, you just look at how many you print and how many you sell, its not hard, they all do it that way.
    They charge for the paper, to be independent, they can then say to advertisers that we do not NEED your money, we would rather stay independent.

    If a large company sponsored that news program, they could not say "WE DONT NEED YOU", and that would influence the content of the news.

    They are not going to piss off the Goose laying the golden eggs.

    IF private companies are sponsoring news sources, then you have to ask "who is the client of the news agency?"

    If you are sponsored or paid by a company, then you want to please that company, and you are not so interested in your customers, (the readers). It would become more important to you to please your sponsor, than it would be to provide unbiased or use full news to your readers.

    You might find your readership goes up if you post a lot of crazy claims, or post topless girls or something, you can say to your sugar daddy that you are getting lots of readers, but that is not because of quality of content, or balance in reporting.

    It would be from modifying the news to suit the large base of readers, the lowest common denominator.

    News papers charge for the physical paper to pay their writers, reporters, and for the production and distribution of the paper. As well as to ensure independence to advertisers by having alternate revenue schemes to allow them to present accurate and unbiased news.

    So you think "news by page views" would be a good thing ?

    Then what is going to happen to the obscure but very important news, that less people may be interested in but equally important?
    They will not be presented because they do not have the "commercial appeal" to get page hits.
    (and for you this is a good thing?)

    "central to any media strategy should be the idea of charging for some content." 

    Charging money for the work you do, you do not agree with that ?

    Charging money for what you produce, you do not agree with that ?

    So reporters, editors writers should not be paid for creating content ?
    You would prefer that the writers are paid directly by the very companies they may have to report about ?

    Broadcast radio, tv, google, and so on are all pay per view, its just you do not pay them directly, but you most certainly PAY, you do not think that you pay extra for that new car advertised on telly to pay for that add ?
    What if you do not look at that add, but buy that car anyway. You paid for something you never received !! Is that ok for you ?

    I think that sucks.

    I do not want to pay more for a toaster because somewhere, that toaster company is paying your local news outlet. Thanks but no thanks..

    How do you regulate that, how do you control bias, and influence in the news.

    That is why these systems tend to fail, the big picture is never looked at in sites like TD or whatever. You just grab a few diverse idea's and string them into some story.

    You make assumption that people do not pay for content, when in fact they do, they pay for advertising with that content, by paying MORE for that product, everyone pays the advertising budget. But not everyone will benefit from advertising, so they end up paying more than they should for something they never received.

    So a US car company, may spend billions of dollars in the US on advertising, but that money just makes my imported US car much more expensive. I am paying for YOUR content, or you might be paying for mine.

    Either way, that a system sucks, I mean really big time.

    Would these sponsored news outlets be required to disclose all their supporters ? PBS newshour does, but they have a very clear policy and at least they have multiple sources of revenue and therefore can retain independence.

    So if I do not watch PBS news hour, and INTEL sponsor that news program, the may they pay PBS is from their profit, their profit is from how much I pay for a CPU from INTEL.
    Therefore I pay a premium for my INTEL CPU so that they can pay a news outlet.

    So you cannot say I and everyone else would not be paying for content, just the method and fairness of the payment is vastly worse.

    "
    Along with his third point he pulls the following assertion out of his ass, "Digital distribution should make content much cheaper--but it shouldn't make it free."  Why shouldn't it be free?"

    Because its NOT free, because writers have to be paid, servers have to be maintained, editors paid, legal staff, reporters that actually gather real news, and not just lift it from other services.

    There is an entire line of costs and expenses in providing the equivalent to a new paper, you need offices, staff, writers, reporters, you need infrastructure.

    It's not only about 'distribution' its about creation, if you have nothing to distribute, then the best distribution system in the world is not any good to you.

    People read the news because the content is of value to them, they do not read the news because its free or its digital.

    Do you see trying to make this as simplistic as you have means you clearly have not looked at the bigger picture and that you have confused paying by different methods as "free".

    Nothing is free, you cannot create good quality news with a good quality news reporter, they have to be paid, every should be paid for their work.

    So you assign no value to the content, but all value to the distribution system.

    If distribution and price was all that mattered then Linux would be a monopoly, and would rule the 'market'.
    Its free, its easily distributed, so why is it not super popular ?

    You know why, as well as I do, free and available are not in themselves good selling points.
    People want content, and people are willing to pay for what they want, people will always pay more for quality, and functionality.

    People generally do not like to pay TOO MUCH, or more than necessary, so they see the huge expense in advertising and see that as a cost, and extra expense on the product they buy.
    That applies to all products, you think google give their stuff away for free, every time you see an add on google, you know that product has paid Google for advertising, and therefore you know you are paying more for that product than is necessary.

    And if you do not use Google, then all that money you pay that goes to Google is totally waisted.

    Depth of reporting on the internet is woeful, most 'news' from the internet is lifted from or gathered from other 'news' sites on the internet.

    You see it all the time, especially on sites like this, but often sooner or later they go back to a real physical, out side news source, like a TV news crew or a news paper.

    A real physical reporter, on the ground, with a camera and a laptop, collecting the news, that is not what happens on the internet.

    Its about the quality of the content, and the gathering of the real and actual news, and the integrity of ethics of the editor and reporters.

    Obviously, distribution is but a small aspect of the production and distribution of news, digital distribution is cheaper, but it is not free. Its a cost.

    Its a cost, just like the cost of employing reporters, camera crews, editors, presenters and so on.
    Digital distribution does not negate those overheads, so why would digital distribution me free ?
    Why is that 'out of his ass', or is that just your opinion. Or factual, unbiased reporting ?

    "
    Hundreds of years ago the most efficient means to distribute news was to print it on paper and deliver it locally."

    So ?
    Again, if all you focus on is distribution, and forget about all else, including bias, content, editing, accuracy, ethics, codes of practice, legal statutes and commercial influence.
    Sure, if you assume digital distribution is free, and that is all that matters you can make such claims.. But they would be wrong assumptions, and conclusions.

    Internet does not have much "depth", in general, to get "depth" you generally need to go to the source, which is often (most often) an official news media company, that employs staff and has a news room and so on.

    Trolling the internet for news bites is not 'depth', or in depth reporting.

    On the internet of off the internet, its still the same news companies that are providing the depth of reporting, the independence of reporting, and therefore unbiased (or less biased), and they are not clearly working for a commercial company trying to promote them instead of presenting news and content.

    The money spend on adds on the internet, are just as real as money spend on adds in the print media, and the person who pays that money, internet or other is YOU the consumer of those products.
    (even if you do not benefit from the adds).

    Iv have never EVER seen 'breaking news' on the internet, you don't get to break news by trolling news outlets for content, you break news by having reporters on the ground, reporting on the actual news, not finding something someone else posted on the 'net that you found.

    TV and Radio, are far more immediate than the internet, unless you are constantly watching the news feed from a 'proper' news outlet. You know the ones with staff, and reporters and things.

    If I go to a shop and buy a bottle of milk I do so through a 'paywall', I pay for the content I want.
    If I do anything, that costs money, I do it through a paywall, is I buy a news paper I pay for it.

    If I connect to the internet, I pay for it, if I want to gather the news myself, I might get in a car and go there, I pay for it.

    If I purchase a product that is advertised on Google, I pay for it.

    The Australian Government is installing a broadband network, its going to cost well over $40 billion dollars.
    I'm in Australia, I pay (lots) of taxes to the Government, therefore I PAY FOR THAT NETWORK.
    EVEN IF I DO NOT USE THE NEW, I pay for it.

    So, why shouldn't it be free, because its NOT free, that's why.

    May be you should be asking "why SHOULD it be free", or "how can it be free".

    Why is it not a better system to have those that want to consume the news (or content) pay for that, as opposed to charging everyone a tax to subsidise that persons desire ?

    Why should I have to pay more for my products, because you want that company to pay for your news ?

     

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    darryl, Jul 30th, 2010 @ 9:19am

    Q & A

    Q.

    So how does Google makes so much money ?

    A. Thats easy, they get lots and lots of companies to pay Google to display advertisements.

    Ahh ok.

    Q, What companies ?

    A, EVERYONE, or almost, Google is a big company with millions of companies paying them.

    Q. Ok, I understand that but where does that money come from?

    A. All the millions and millions companies do.

    WOW, thats amazing !!!!

    Q. Where do those companies get that money from ?

    A. They charge a higher price for their product, and transfer that money through too Google.

    Q.
    Really, so does that mean that every time I purchase a product that has been advertised on Google I am paying Google?

    A. Yep.

    Q. Even if I dont use Google ?

    A. Yep.

    Q.
    OK, fair enough, so how do I get onto this Google thing ?

    A. Well, you purchase a computer, and purchase an internet connection.

    Q. so that costs money ?

    A. Yep.

    Q. So even if I never use the internet I still have to pay Google ?

    A. Yep.

    Q. So to get on the internet, and visit google, I have to purchase products that give money to Google, So I can go to Google and pay more for the products I need to get on the net ?

    A. Yes, If you purchase a Dell computer, and they advertise on Google, then some of the cost of that computer will have been paid to Google to host and add for their computer that you cannot access without the computer they adverstise, an add you cannot see because you dont have that computer.

    Q. So they screw me from both ends then ??

    A. Yep.

    Q. What if I dont want to pay ? And dont use the internet?

    A. Too bad, everyone pays.

    Q. What if I dont buy the products that are advertised?

    A. how will you know what is or not, if you are not on the net !

    Q. This sucks.

    A. Yep.

    Q. How "ELSE" do I get screwed by this.

    A. Well your taxes also go towards the internet infrastructure, and it was a government development in the first place.
    So if you pay taxes, and you do with every purchase, you pay for the internet, and you pay for the infrastructure that google uses, to tax you again on every product you purchase, (or dont purchase).

    The entire planets cost of living is higher because of this hidden advertising tax.

    You know, "SOME" people even think they are getting it for free.

    Q. This sucks,,
    There must be a better way..

    A. not according to these guys, who think paying like this is effective, and better than not taxing the planet for advertising.

    Q. Do you think its a good idea to come corporations responsible for news ? is that not like leaving the fox incharge of the hen house (expecially FOX).. ??

    A. I think we can trust big organisations to be honest dont you ??
    The fox is really a wolf in sheeps clothing !!..

     

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  27.  
    identicon
    Rob Shaver, Jul 30th, 2010 @ 9:22am

    Who doesn't love a funny TV ad?

    I don't read newspapers; never have, never will. So if they add pay-walls, it's no skin off my nose. However I do subscribe to Safari Books Online and have for at least eight years. At about $115 per year I have saved many hundreds of dollars. As an engineer I used to buy up to five books each year to keep my technical knowledge up to date. None were less that $25 and many were over $50.

    So that's a pay-wall I understand. I always have the latest technical books at my fingertips, literally. I can do a text search of their whole library or just one book. It's better than the paper version. Much better.

    I think Robert McLeod makes some good points in his comments and so far nobody has really refuted them.

    Someone made the comment that "writing is a loss-leader", I guess expressing his opinion that all writing is a loss-leader, and also inferring that anything that can be embodied in digital form can not possibly have a price greater than zero. In fact that is a theme often expressed in this blog.

    I think I understand the argument but I'm still uncomfortable with the conclusion that is reached. I am convinced that copyrights and patents do limit innovation.

    And yet, somehow I think people who are creative, who create transcendent works, or even derivative works, should have some way to directly benefit from the creation of those works. The theme here is that it is the creator's problem, not societies problem.

    Perhaps society will be better off if creators can't be directly compensated so that those creators that create strictly for the money will stop creating. Then only those who are doing it for other reasons will continue to create.

    Many of these creations will then be subsidized ... patronized ... for the sake of ... what? Many will be forms of advertising. (Who doesn't love a funny TV ad?) Perhaps for religious reasons like much of the art in the renaissance?

    Who here hasn't read "The Cathedral and the Bazaar" by Eric S. Raymond? I think this was near the beginning of this whole debate and casts a lot of light on alternative economies. Here's a link to it (it's free or you can buy the dead-tree form): http://catb.org/esr/writings/homesteading/

    Well, I'm still trying to understand the questions. I don't yet have the answers.

    Peace, Love, Laughter,

    Rob:-]

     

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  28.  
    icon
    SomeGuy (profile), Jul 30th, 2010 @ 9:28am

    Re: "why should news be free" or "how can news be free".

    Wow, dude. That's a long rant. What I think you're saying is basically:

    -There are costs beyond distribution that need to be accounted for.
    -"Free" stuff isn't absolutely free -- someone somewhere pays for it.
    -News paid for by advertising can't be honest.
    -Current professional reporting is superior to any other model.

    I'd agree with you on the first two points. The producer of the content does have costs beyond just distribution. But "it cost me a lot to make this" isn't a good reason for why people should pay you, especially if they can find the value they're looking for elsewhere. And that's important to think about -- you can have extrordinarily high quality product, but if that higher-quality doesn't add enough value and entice enough extra business to offset the cost, then you're doing it wrong. Competing with "free" can be done, but it needs to be done in a smart way.

    And yeah, "free" usually isn't really free. But that's not really the point. If I buy a car for $30k, it's because I feel that the value of the car is worth $30k -- it really doesn't matter to me if $10k of that is spent on advertising. I don't think you can say I'm being ripped off because I paid a price I felt was fair. If they start spending $20k on advertising and raise the price to $40k then they'll lose my business -- the value of their car to me isn't worth $40k -- but it's only indirectly related to advertising. They could potentially spend just as much on advertising and have it eat their profits, and I'll still buy the car at $30k. what they do with my $30k doesn't generally impact the transaction.

    I disagree that news pay for by advertising can't be honest, or "independent" as you like to say. It takes strong character, sure, but it can be done. And should be done, economically speaking, because people VALUE honesty in reporting. No one would watch a BP-funded piece about how the oil is good for fish because that's dishonest, but they'd still watch a truthful piece on the oil spill regardless of whether or not BP is paying for it. Whether BP would pay for an honest piece is another question altogether, but I think a successful, honest news program would find other support even if BP pulled out. They need advertisers, sure, but the DO NOT NEED BP specifically. And a strong audience will entise other advertisers.

    Also, what we have today with Fox and CNN and The Times is mostly crap. They sensationalize their stories, they skim over anything that's not shocking or scandalous, and they miss out a lot on critical analysis and real investigative reporting. They don't press the people they interview because they don't want to jeopardize their future access. And if you don't think that there are corporate interests holding their leashes, then you're fooling yourself. Right now, I have the most faith in amateur bloggers than in professional news agencies, because an amateur isn't concerned about who's signing his paycheck.

     

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  29.  
    icon
    SomeGuy (profile), Jul 30th, 2010 @ 9:35am

    Re: Q & A

    Q: So, if there was no advertising, everything would be cheaper?

    A: No, probably not. Advertising lets companies reach larger audiences who might not know about their products. Some of that larger audience will buy the companies' products. Selling larger quantities of products means producing larger quantities, and mass-production has been shown to lower the cost-per-item. If they didn't advertise, the price wouldn't go down because the cost-per-item would be higher.

    Q: Well shit.

     

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  30.  
    icon
    Free Capitalist (profile), Jul 30th, 2010 @ 9:36am

    Re: Q & A

    Are you saying I'm paying The New York Times every time I purchase something from a company that advertises with the NY Times even though I don't read the NY Times?

    Shocking!

    Something must be done.

    de-sarc

     

    reply to this | link to this | view in thread ]

  31.  
    icon
    SomeGuy (profile), Jul 30th, 2010 @ 9:46am

    Re: Who doesn't love a funny TV ad?

    "people who are creative, who create transcendent works, or even derivative works, should have some way to directly benefit from the creation of those works."

    Generally, everyone here agrees with that.

    " it is the creator's problem, not societies problem."

    And to be honest, I don't see a problem with that. It's not my responsibility to pay you just because you did something. I have to be convinced that it's valuable to me. I don't pay McDonalds because they made a burger, I pay McDonalds because possession of that burger has value to me (and value to others, and so I'm competing in a marketplace against other potential consumers).

    If a content creator can demonstrate value and take advantage of a competative market place, they will be paid. If they can't do either, then they'll have to find some other way to provide for themselves. Patronage is one, a day job is another. Being paid directly for your efforts is only one motivation for any activity.

     

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  32.  
    icon
    Free Capitalist (profile), Jul 30th, 2010 @ 10:04am

    Re: Re: Re: Poor assertion

    A decent printing machine could last decades with minimal maintenance. It was also easier to value as an asset on a balance sheet.

    This reminds me of the 80's and esarly 90's when a couple of companies I worked for amortized the cost of systems over 7 years. Silly.

    Still a little of course.

    Our development costs are higher each year as we upgrade software, add functionality, add servers, deal with load

    Sounds like you are trying to (wisely) "follow the eyes", which, unless you've got some issues in engineering, still doesn't approach the ongoing costs of printing a limited circulation in a single market. Much less if you consider the costs of setting up a new press in a new market, which is analogous to what you are doing.

    And if you are adding capacity that means your impressions are skyrocketing.. which should be cause for celebration. As fogbuzd more adroitly points out, the marginal costs of what you're doing truly are pennies on the dollar (if that) compared to analogous growth and marginal costs in the paper world.

     

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  33.  
    icon
    jauh (profile), Jul 30th, 2010 @ 10:05am

    One small oversight with "The Times"

    The issue of 2/3 attrition overlooks one important factor - when The Times introduced the paywall, the subscription price was £1 for the first 30 days then £2 weekly. Now, I paid £1 for the 30 days, but as my 30 days are about to expire, I've cancelled to subscription with effect from the day it was going to be renewed... So saying that The Times' readership decreased by ca. 66% is somewhat of a misnomer and the real impact would only be seen once people start cancelling their "introductory" subscriptions!

     

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  34.  
    icon
    nasch (profile), Jul 30th, 2010 @ 10:16am

    Re: Re: a paywall by another name.

    Unfortunately you are confusing value with price (cost). Since the market value is decided by the consumer who 'knows' that web distribution is virtually free, that is the price that the consumer (customer) is willing to pay for your content,

    FTFY (you were confusing value and price!)

     

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  35.  
    identicon
    Rob Shaver, Jul 30th, 2010 @ 10:28am

    Do you tip your waiter?

    @SomeGuy,

    Thanks for responding. You make some very good points.

    "It's not my responsibility to pay you just because you did something."

    Not just because I did something, but because you enjoyed what I created and you'd like me to make some more. Reward the behavior you want to see more of, that's what I'm talking about.

    We do seem to have some "social contracts". Do you tip your waiter? If so, why? I do but I'm trying to understand why too? Do you donate at church or to other charities? Again, why?

    So I guess I'm asking, when is it your responsibility ... when is it your obligation to contribute?

    Why do you drive on the side of the road everybody else drives on? Is it because it's a law or is it also a social contract that facilitates things running smoothly?

    I sited "The Cathedral and the Bazaar" in my earlier post because software was an early example of "infinite goods". Open Source Software and a whole new culture/economy grew out of that. It is a direct predicator to the Creative Commons initiate, which is an attempt to evolve the hacker culture/economy into the main-stream society.

    In the hacker culture there is an imperative to "give back". It is how you gain standing in that community. There are analogs to this in our everyday culture, as I eluded to above. There is some peer pressure to tip your waiter. There is peer pressure to "give at the office" and at church.

    There is peer pressure not to shoplift or sleep with someone underage. Most of our laws are reinforced by peer pressure too.

    The peer pressure not to copy infinite goods is decreasing while the laws haven't changed. Do we want the laws to change? I think the theme in this blog is that they should. But I don't think they will until most of society agrees ... that is changes ... to match.

    Perhaps a gift/donation society would be a step in this direction. Perhaps when you and I DO think it's our responsibility to pay for what you enjoy ... what you want the creator to make more of.

    You've helped me crystallize my thinking. Thanks.

    Peace, Love, Laughter,

    Rob:-]

     

    reply to this | link to this | view in thread ]

  36.  
    icon
    nasch (profile), Jul 30th, 2010 @ 10:30am

    Re: Q & A

    I was thinking about asking how I get my time back for reading that, but then I reconsidered. It's actually pretty funny.

     

    reply to this | link to this | view in thread ]

  37.  
    icon
    SomeGuy (profile), Jul 30th, 2010 @ 10:49am

    Re: Do you tip your waiter?

    Hey Rob:

    Not just because I did something, but because you enjoyed what I created and you'd like me to make some more.

    Given the opportunity, I do. What we're talking about here though is a news company demanding customers pay sight-unseen and why that doesn't work. If I know you do good work, yeah, I'm more incluned (but not guaronteed) to pay you for it, but if I can't even see your work until I've paid you then you're just putting up barriers. I recognize they want to be paid, I'm just explaining why this attempt is a dumb one.

    I tip my waiter as a built-in way to express my pleasure or displeasure with their service. If they do a good job I'll give them a good tip, but I'm also unashamed to tip poorly (or not at all) for bad service. And I measure specifically their service -- many things that can go wrong at dinner (probably) aren't their fault.

    I donate to charities because I can see the good work they do and want to help perpetuate that. I don't pay sight-unseen.

    I do neither of these because of any kind of social contract, I do it because it's a fee-for-service set up and I can accurately guage their value to myself. The waiter's service is more direct, whereas charities fall into an "enlightened self-interest" category.

    I think peer pressure has little if anything to do with laws and morals, generally. There are real consequences to shoplifting or committing other crimes (and even those don't stop everyone), and crimes like paedophilia are generally repugnant in their very nature, except to a subset generally considered aberrant.

    Infinite goods aren't REALLY being discussed here. Some of the conversations sound the same because some of the mechanics are similar, but what we have are many different news sites competing with each other for our attention. The Times' paywall is competing with The Guardian's free articles, and copying doesn't even come into play. What the laws should or are or will do is an entirely different conversation altogether.

    I think "responsibility to pay" is far too strong a term to use pretty much ever...

     

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  38.  
    identicon
    Anonymous Coward, Jul 30th, 2010 @ 11:12am

    Re:

    I,on the other hand, am quite sure he's a fish

     

    reply to this | link to this | view in thread ]

  39.  
    identicon
    Rob Shaver, Jul 30th, 2010 @ 11:41am

    Rational or Rationalize

    @SomeGuy,

    Yes, I admit I've wandered off the strict topic of this thread but still within the theme of the blog as a whole.

    I am a bit disappointed at your last response. There was a time when I would have responder just as you have. Now, with age, I recognize that peer pressure, social contacts (almost synonyms) and empathy, all very close cousins, have great unconscious influence on my beliefs and actions. Perhaps you are the exception but your answers are so much like others I see that I'm forced to conclude that you appear to be influence by these very factors. No offence intended.

    Long ago I reached the inescapable conclusion that I am not rational. Oh I can talk a great game but, in the end, I find that I am rationalizing beyond what logic would dictate.

    Thanks for the conversation. I see I'm drifting farther off topic so I think this will be my last entry on this thread.

    Peace, Love, Laughter (and I mean it ... the laughter part),

    Rob:-]

     

    reply to this | link to this | view in thread ]

  40.  
    icon
    nasch (profile), Jul 30th, 2010 @ 11:43am

    Re: Re: Do you tip your waiter?

    Infinite goods aren't REALLY being discussed here.

    Sure they are.

    Some of the conversations sound the same because some of the mechanics are similar, but what we have are many different news sites competing with each other for our attention.

    And one way they're competing is by distributing content for free, which they can do without losing money because there's zero marginal cost in doing so. It's a competitive market, so price is being pushed toward marginal cost, and marginal cost is close to zero because: the product is infinite! :-)

     

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  41.  
    icon
    SomeGuy (profile), Jul 30th, 2010 @ 12:03pm

    Re: Re: Re: Do you tip your waiter?

    I want to disagree with you, but after the day I've had I'm not sure how. :p

     

    reply to this | link to this | view in thread ]

  42.  
    icon
    SomeGuy (profile), Jul 30th, 2010 @ 12:04pm

    Re: Rational or Rationalize

    No offence intended.

    None taken, though I don't know what you mean.

     

    reply to this | link to this | view in thread ]

  43.  
    icon
    nasch (profile), Jul 30th, 2010 @ 12:31pm

    Re: Re: Re: Re: Do you tip your waiter?

    haha, let's just agree to agree. ;-)

     

    reply to this | link to this | view in thread ]

  44.  
    icon
    DanVan (profile), Jul 30th, 2010 @ 12:44pm

    Paywalls can in fact succeed if the site is giving unique information that can't REALLY be found elsewhere

    I pay for one site b/c it is a unique subject that is close to my heart. So, I pay for it b/c I can't really get the indepth knowledge elsewhere

    But general news sites thinking that we will pay for blogs that provide nothing IN DEPTH is....idiotic at best

     

    reply to this | link to this | view in thread ]

  45.  
    identicon
    Benny6Toes, Jul 30th, 2010 @ 1:17pm

    Re: Re: Re: Re: Poor assertion

    Outsource? Outsource what? Server farms can be cheaper, but that depends on organizational size, what SLAs are in place, what kind of deals you can get from hardware manufacturers/distributors compared what the same virtual or physical systems would cost to be hosted by a farm, etc.

    As for outsourcing software...heh...I work for a software consulting firm. We're ridiculously good at what we do and our clients pay good money for it, but we cost more than what they could have in house (assuming they didn't have to rehire someone for the same position every few months). You could outsource overseas, but I've seen and heard about that blowing up or causing issues more times than I've seen or heard about it being successful. And that has costs associated with it as well; some which aren't that obvious.

    Basically, what you said might be true, but, then again, it might not. The cost depends on what the individual company needs, what's available to them, and who their available providers are. A blanket statement such as yours are meaningless.

     

    reply to this | link to this | view in thread ]


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