Should The Knight Foundation Be Paying For Startups To Put Up Paywalls?

from the might-be-counterproductive dept

Let me start off this post by saying that I'm a huge fan of what the Knight Foundation has done for journalism lately, especially with its grant program that has supported a bunch of cool startup ideas to try out new forms of journalism offerings. I've also been talking with some folks involved with the Knight Foundation about maybe helping with some of the programs they run and doing some mentoring (though, nothing is set yet). That said, I'm a bit perplexed by a recent report that the Foundation has agreed to fund a bunch of non-profits' usage of Steve Brill's paywall startup, Journalism Online. I'm not against experimenting, but I do worry that this will push some of these nonprofits towards a paywall solution that doesn't make sense. With the Knight Foundation paying the upfront fees ("It gets us guaranteed cash in the door," Brill explained), it may lead these startups to feel more compelled to make a bad business model decision by betting on a paywall, where other solutions make a lot more sense. I've spent a lot of time discussing why the economics of paywalls rarely work -- especially in the general news space, and I worry that by footing the bill, the Knight Foundation may push these startups into a decision that does more harm than good. There are lots of interesting and compelling business models out there, and I'm not sure the Knight Foundation should be picking one model that it thinks all of these startups should use.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Oct 7th, 2010 @ 7:39pm

    The Knight Foundation is pretty irresponsible and not particularly attentive with their grants and monies.

    As an example, a couple years back UCLA's student paper got a grant from them to develop an open source newspaper website system. Years later? No actual open source project, just one code dump of pretty useless code and UCLA's student paper got a new website.

    Bottom line? Knight Foundation just tosses money at things without performance benchmarks are sanity. Don't expect much from them.

     

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

  2.  
    icon
    TechnoMage (profile), Oct 7th, 2010 @ 8:02pm

    KITT

    I swear for a few lines I thought you were talking about Knight Rider... oh well...

     

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

  3.  
    icon
    Skeptical Cynic (profile), Oct 7th, 2010 @ 10:23pm

    Everyone want info

    but most people have grown up with getting that info for free ( commercials ). So find a new way, please.

     

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

  4.  
    icon
    Josef Anvil (profile), Oct 8th, 2010 @ 3:19am

    Dazed and Confused

    I am absolutely and totally confused by any news organization that decides that a paywall is a good business model. I have yet to run into any piece of news that is hidden behind a paywall, that is not available somewhere else on the web.

    Whenever I run into a paywall (which isn't often), Google is kind enough to list the hundreds of other similar articles. So I have to wonder why anyone would pay for news online. It's not even like I'm being routed to "amateur" news outlets as an alternative, but rather to other "professional" news articles for free. So it all just boggles the mind that anyone would think a paywall is a good idea. I would think the site development costs would drain what little profit there is from the paywall.

     

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

  5.  
    identicon
    Anonymous Coward, Oct 8th, 2010 @ 5:49am

    This is science

    Don't be afraid of the science Mike. It is an experiment and we do not need to be afraid of the results. We can anticipate the results but lets wait and see how it turns out. I suspect that it will be unsuccessful as you do but, this seems like a fair assessment of the process.
    If it is a failure then it can be used as another data point. If it is a success then we need to begin to change our way of thinking and understand the reasoning. I know it can be scary but we must embrace the truth wherever/whatever it is.

     

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

  6.  
    icon
    Chronno S. Trigger (profile), Oct 8th, 2010 @ 6:23am

    Re: This is science

    Isn't the definition of insanity doing something over and over again and expecting a different result? Haven't we shown that paywalls only work in the presence of a reason to buy like how the Wall Street Journal is setup? If one just tacks on a paywall to a standard news site the readers and the advertisers go elsewhere.

    We already have data points for this, it's not an experiment, it's repetition.

     

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

  7.  
    icon
    Hephaestus (profile), Oct 8th, 2010 @ 7:11am

    Re: This is science

    "Don't be afraid of the science Mike. It is an experiment and we do not need to be afraid of the results. "

    I had the same thought recently after reading Mikes post on VODO's promotion experiment. He seemed not willing to sit back and watch the results unfold, just point out the potential bad parts. ... I'm on a horse. :)

     

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

  8.  
    identicon
    Gumnos, Oct 8th, 2010 @ 7:12am

    Fate happens

    Thinking about the options:

    1) Knights pay startup, withdraw, and startup fails with paywall. Another data point in a long history.

    2) Knights pay startup, withdraw, startup succeeds with paywall. Case study to look into

    3) Knights pay startup, withdraw, startup succeeds after changing to a smarter business model. Agile business milks stupid investors.

    4) Knights offer to pay, startup refuses. Doesn't make the news, but startup flies or flounders on its own merits.

    So whatever. :)

     

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

  9.  
    icon
    Gumnos (profile), Oct 8th, 2010 @ 7:12am

    Fate happens

    Thinking about the options:

    1) Knights pay startup, withdraw, and startup fails with paywall. Another data point in a long history.

    2) Knights pay startup, withdraw, startup succeeds with paywall. Case study to look into

    3) Knights pay startup, withdraw, startup succeeds after changing to a smarter business model. Agile business milks stupid investors.

    4) Knights offer to pay, startup refuses. Doesn't make the news, but startup flies or flounders on its own merits.

    So whatever. :)

     

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

  10.  
    identicon
    bob, Oct 8th, 2010 @ 11:40am

    Why not? Paywalls have many advantages

    While I know that you can't see any good in paywalls, there are many useful features to paywalls.

    1) Paywalls are democratic: ad supported sites are always whoring themselves out to advertisers with big pockets. Paywalls let the little guys work together to fund content creation.

    2) Advertising is annoying. Yes, some paywalled sites will still offer ads, but that's not a requirement.

    3) Paywalls help limit spam. Open sites may be great but spammers really abuse the openness. Even registration with CAPTCHAs is abused now by spammers. Money limits the damage they can do.

    4) Paywalls let writers sell writing, not t-shirts or insider access or coffee mugs or tote bags.

    5) Paywall sites owe their allegiance to their readers alone. Ad supported sites try to attract readers but can't piss off the big money advertisers. Is it any coincidence that this site's opinions are so aligned with Google and Sun/Oracle, the major advertisers?

    So don't be such an auto-hater chugging the haterade all day long just because someone wants to make an honest buck.

     

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

  11.  
    icon
    Gregg L. DesElms (profile), Oct 9th, 2010 @ 2:34pm

    When Mike's right, he's REALLY right

    I come in here now and then and take issue with Mike, and it sometimes makes me feel bad...

    ...and so when I so 100% agree, it seems only fair that I'd get in here and say that, too.

    Paywalls, when it comes to newspapers (and other forms of news dissemination) don't work. In fact, they harm. It's a faulty business model which has been tried over and over, and which always ultimately fails.

    What I despise most, though, is newspaper web sites which post free content, but then it expires behind the paywall after a couple of weeks...

    ...in what I call the "crack dealer on the corner" approach to news dissemination.

    Mike, on this (and so many other subject, truth be known) could not be more right.


    ___________________________________
    Gregg L. DesElms
    Napa, California USA
    gregg at greggdeselms dot com

     

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

  12.  
    identicon
    Ben Wirz, Oct 11th, 2010 @ 12:52pm

    Knight Foundation's Support for Sustainability

    Having funded over 200 non-profit news sites, the Knight Foundation’s view is that many non-profit media groups need to continue to experiment with different revenue streams to become sustainable. Content payment systems such as Press Plus allow for such experimentation. Though certainly not appropriate for everyone, such a platform could work for groups like the New Haven Independent who view Press Plus as, “an easy way to ask for donations or to charge for content.”

    That said, we have been clear that we are not endorsing Press Plus. Indeed, in communicating with grantees, we included detailed information about seven monetization tools, including Google’s Newspass, a rival content payment system and micro-payment platforms like Kachingle and Flattr that are user-based rather than content-based monetization tools. In addition, we do not take a position on the question of pay walls vs. donation systems. These decisions need to be left to the news organizations themselves. Many technology platforms can provide both services.

    Thanks for staying abreast of the Knight Foundation’s activities, a healthy dialogue cannot but help all people who care about these issues to better understand and refine their views.

    Ben Wirz
    Director of Business Consulting, Knight Foundation

     

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


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This