As you know by now, Rupert Murdoch's The Times (of London) has kicked off its paywall experiment, with an editor there claiming that news publications that don't put up a paywall will go out of business. Perhaps. We shall see... but in the meantime, Rupert might want to find people who understand HTML before he turned on the paywall. Reader Craig sent over a link to a Times Online story that tries to get people to go to the new paywalled site "for full coverage, pictures and video from the Middle East." The only problem? The link is broken. I took a screenshot with my mouse over the link, and you can see that rather than a proper link, the link doubles up on the http at the beginning: http://http://www.thetimes.co.uk/etc.... If you can't see it in the image above, click through for a larger version. Clicking the actual link, of course, gets you a page not found error. Oops. Now, you can say this is a small mistake that anyone can make (hell, we've made it here at times), but for a big professional news organization that are trying to drive people to this new pay site, you would think they would have at least had someone double check the links... On top of this, it really highlights the pure annoyance factor that The Times has created for everyone. Not only is it locking up its content behind a paywall, it makes you go hunting for it, and redirects its audience to a totally different place (and, in this case, not even very well).

With Rupert Murdoch's The Times of London going behind a paywall, we're already seeing some of their writers bailing out. A bunch of folks sent over the news that the writer of the Times' legal blog, Tim Kevan, has set up shop on his own blog, outside of the paywall. He admits he has nothing against The Times for putting up a paywall, it's just not something he wants to be a part of:

I have today withdrawn the BabyBarista Blog from The Times in reaction to their plans to hide it away behind a paywall along with their other content. Now don't get me wrong. I have absolutely no problem with the decision to start charging. They can do what they like. But I didn't start this blog for it to be the exclusive preserve of a limited few subscribers. I wrote it to entertain whosoever wishes to read it.

We've seen this before. Back when the NY Times had its old paywall around its op-ed columnists, there were plenty of stories of those columnists complaining about the lockdown. And, of course, when Newsday, in New York, put up its paywall (which infamously brought in just a few dozen subscribers), one of its top columnists quit, after publishing an open letter about why paywalls are a bad idea.

This does bring up yet another example of where paywalls can hurt. Even if they do get subscribers (a big if), it might not do much for a writer's own reputation if his or her work can't be read more widely. In an era where an individual's reputation is pretty important in the journalism world, many good reporters and columnists might not want to get stuck in virtual obscurity behind a paywall.

As Rupert Murdoch and News Corp. get ready to begin their latest paywall experiments with the Times of London and the Sunday Times, the company has revealed a few more details, and it looks like this particular paywall will be fairly complete. Unlike the WSJ, this won't be a "leaky" paywall. The content will be opted out of Google, and there will be no way to get to it, unless you subscribe at the rather hefty price of £1 per day. What's amazing is that the folks behind this experiment still think it's going to be a huge success -- even as nearly all of the papers' competitors are remaining steadfastly free.

In looking over the details, it seems pretty clear that it was set up by people with a very old school "print" mindset, even though they're trying to add some digital elements to it. Basically, they set it up to look just like a print newspaper. It's very much about "here's the news, now take it." There's little effort to allow the community to actually be a part of things. They do allow comments, but on a limited basis, and then there will be "video and slide shows." This is all about delivering information. It's not about engaging or discussing things. It's entirely "we're the experts, take the news as we see it." I'm sure there are some people who still want that kind of thing, but much of the world seems to be moving towards a much more participatory, community-based model.

Amusingly, the "comment editor" for the Times insists that he'll still Twitter links to stories -- it's just that no one will be able to read them. That seems pretty obnoxious. I know that even when I point to stories here on Techdirt that have a registration or paywall (even if there are easy ways around them) the readers complain. Pointing people to stories they can't read isn't particularly nice. On top of that, the comment editor, Danny Finkelstein, seems to have a bit of hubris about this whole paywall thing. He claims that his competitors, who will offer similar news stories for free "won't go viral, they will go out of business." I guess we'll find out.

Finkelstein, by the way, also seems a bit confused about the business of newspapers:

"We are unashamed about this," said Mr Finkelstein. "We are trying to make people pay for the journalism.... I want my employer to be paid for the intellectual property they are paying me for."

Except, in almost every case, that's never been the case. For pretty much all of the modern history of newspapers, the newspapers were not paid for their "intellectual property." Subscriber fees paid for less than printing and delivery costs. The money was made from selling ads, and the ads were sold because (at the time) the newspapers were the only ones who could bring together a community of local eyeballs that advertisers wanted to buy. But, by blocking that off (in the face of free competition) and limiting how useful the content is (by making it a lot less shareable or worth discussing), basically takes away that value, gives fewer reasons for people to gather, and fewer reasons for advertisers to pay. Perhaps I'm missing something about this plan, but it seems designed to destroy all the reasons why a news publication makes money in the first place, on the confused and wrong belief that newspapers have supported themselves via "journalism" at any time in the past. The journalism brought in the people, and the people brought in the ads. Skipping over those details seems like a pretty big risk.

It looks like even Rupert Murdoch and his crew at News Corp. aren't all that confident in how well his new paywalls for his newspapers in the UK are going to do. Apparently, News Corp. has convinced the media-owned organization, ABC, that tracks traffic to newspaper sites in the UK, to no longer publish the numbers for his sites. ABC is still tracking the numbers, but it won't publish them. Apparently, someone is a bit sensitive about people noticing how much traffic has shrunk. Maybe it's starting to sink in that there really is competition online, and most of it is remaining free.

We're still surprised that the folks at the NY Times think that a paywall is a smart idea -- especially since they already tried the idea and it failed pretty miserably. But, lately, it seems like they're completely making stuff up to make themselves believe it's a good idea. At the company's annual meeting, publisher Arthur Sulzberger Jr. tried to convince everyone (including himself, we're guessing) that by putting up a paywall, you increase the emotional connection readers have with the site -- to which Jeff Jarvis noted, that "emotional connection" is probably anger.

At the core of our thinking is the necessity of increasing engagement. This is about having our users generally spend more of their valuable time with us, either on our site or on other sites that are integrating our content. It is about enhancing the emotional connection that our users have with us.

We start off with the premise that the key to increasing engagement is about compelling storytelling. This transcends technology --- it is not about the printing press, or the server, or the cave drawing, for that matter. It is about an essential human connection, and we are working hard to explore this notion and enhance our relationship with our audiences worldwide.

The real issue is that Sulzberger seems to have the relationship backwards. Charging doesn't create an emotional relationship. What we've been pointing out over and over again is that you have to build the relationship first, and then on top of that you can charge for providing scarce value. The obvious response, of course, is that many people already do have an emotional connection with the NY Times, but you don't increase that by charging for the content that helped build that connection. That weakens the connection. The connection is what makes people willing to buy. Buying doesn't build a stronger connection by itself.

Wanderlust wrote in to point out the rumors doing the rounds today that Hulu is getting ready to launch a paid subscription service, something that's popped up before. Apparently Hulu is looking to offer the five most recent episodes of a show for free, then will charge $10 a month for access to older episodes. There aren't a ton of details, so it's not clear exactly how the plan will play out. But we can say this: unless Hulu is adding some real value for users, and not just putting currently free content behind a paywall, it's doomed to failure. It's pretty clear that some of Hulu's corporate overlords think all of its content should be behind a paywall. But erecting a paywall will simply drive Hulu users to unauthorized downloads and streams, delivering those content providers absolutely nothing. All too often these paywalls are based on the idea that once users have nowhere else to go, they'll start paying; the reality is, though, there's always somewhere else to go.

Hulu's success thus far has been by attracting users with a good choice of content presented in a good interface, reflecting something of an understanding that the way to compete with free, unauthorized content is to offer users something better. It's already started to undermine some of its success by blocking certain browsers in an attempt to force users to only access its content (and its advertising) through means of which it approves, and the paywall represents yet another step towards replacing a product that's better than unauthorized content with one that's worse. In any case, when online streaming TV shows are already pulling in some high ad rates, does it make any sense at all for Hulu to start throwing up paywalls?

Andy Marx writes in to share a letter Daily Variety magazine sent to its subscribers, letting them know that it will soon be putting up a paywall, or as it prefers to call it, a "velvet rope".

The reason for the switch is simple: There has been a boom in showbiz coverage, but much of it is hearsay and spin, making it hard for readers to separate rumors from truth. A lot of the "reporting" has become more sensational as many of our online peers have been lured by the notion of bringing in more consumer eyeballs (and, they hope, more ad money). At Variety, we are apologetically focused on people in the industry. Think of the paywall as a velvet rope, allowing you access to stories that have been confirmed by impartial sources and stories that will better inform you about the world you're working in. Denied access behind the rope are items based on gossip, half-truths and anonymous rants.

So it would appear that publications face a choice: put up paywalls, or write about "gossip, half-truths and anonymous rants". It's really not clear what one has to do with the other; after all, Variety can write about whatever it wants, how it tries to charge for it is a completely separate matter. What's really amusing though, is that Variety is basically trying to dress up its paywall as some guarantee of quality for readers. In essence, it's saying "since we are charging for this, you know it must be good." But when its full letter to subscribers contains seven typos, it looks like Variety is more interested in having the appearance of quality and authority than actually having quality content.

As we've seen time and time again, generally, when newspapers put up a paywall around their content, things do not turn out well. Yet, newspapers continue to put them up. While we applaud the spirit of experimentation, if they simply keep repeating the same experiment over and over again, with the same results, they're apparently not learning anything. So, it's not really surprising to see that yet another paywall experiment has ended badly. This time The Valley Morning Star, a small paper in Harlingen, Texas, decided in mid-2009 to implement a paywall. The paper, which has a circulation of about 23,000, was chosen as a test case for Freedom Communications' stable of newspapers.

The paywall, which launched the week of July 15th, cost $3.95 a month, 75 cents per day, or was included if you had a subscription to the print version of the newspaper. The rationale was that since online readers were not paying a subscription fee, somehow the value to the print subscribers decreased:

"It will allow greater value to our many loyal print-edition subscribers by not giving away the news to non-subscribers," Patton said. "The days of giving content away, which costs money to create and for which we charge our print subscribers, I think, are just over."

As we've discussed here before, this is a flawed argument. The subscription price of a printed newspaper barely covers the costs of printing and distribution, not the production of the content, which is generally funded with ad revenue.

In any case, after 8 months, the The Valley Morning Star took the paywall down, proudly proclaiming they "will be moving back to a completely FREE Web site." By now, so many of these paywall experiments have failed that you have to wonder when the industry will finally heed the lessons they teach.

As Rupert Murdoch moves forward with his plans to put in place a paywall for the online sites of some of his UK newspapers, he may want to look around carefully. Jeff Sonderman points us to the news of a UK newspaper publisher that put in place a paywall of £5 for three months of access to its newspaper websites late last year -- only to find that the paywall has been quietly dropped after less than ten people signed up at one of the papers:

A source at one of the titles involved in the trial said it had been a "disaster" and that the number of people subscribing had been in single figures.

This fits with Newsday's experiment, where only 35 non-Cablevision subscribers were willing to sign up. Newspapers keep over-estimating the willingness of people to pay to read websites.

DV Henkel-Wallace writes

"The New York Times has a good article about Open Courseware (how universities are putting their material online for anyone to use as they see fit). Unusually, the article has an accurate and pithy summary of how the movement started and evolved. It is still a little incredulous that such a thing can really exist ("On a philosophical level, the idea of making money from something available free might seem questionable."). But it is clear: a little ecosystem is building around this educational material.

What's most interesting, is how the same arguments that have already arisen around the "big data" areas like music, film and news appear in this smaller area as well. When MIT launched OCW, they directly addressed the CwF+RtB issues by pointing out that people attend schools for additional reasons than just the syllabus. But some people still don't get it: a professor from the Tuck School of Business still feels that putting the syllabus out there will let the magic out, claiming that it's "obvious" that an "exclusive experience" is appropriate.

The best quote: "It's pretty hard to imagine how an elite institution like us or like Harvard or Stanford or any of the other top schools would stay in business if they didn't have some aspect of the program that was still relatively complicated and difficult to get to," Mr. Argenti said. And thus they lock some of their content behind a pay wall.

Perhaps they should do a case study of the newspapers and how the pay walls have worked out for them."

DV's summary above is great, but I wanted to highlight one more specific point from the article, which is a quote from James D. Yager, a dean at Johns Hopkins University, who basically presents the other side of the story from Professor Argenti, by actually articulating the difference between the content (infinite) and all of the scarcities that the content makes more valuable:

"We don't offer the course for free, we offer the content for free," Mr. Yager said by telephone in February. "Students take courses because they want interaction with faculty, they want interaction with one another. Those things are not available on O.C.W."

Exactly. That's the point, and it's too bad that a professor at Dartmouth (which is generally a pretty good business school) would so confuse the basic economics of information, and not realize that even if all of the course info is free, there are always aspects that are scarce.

Separately, James Schirmer points us to a related article concerning how some liberal arts schools are using Open Courseware to improve their own programs. It's sort of taking a look at the other side of this overall debate, noting how liberal arts schools can improve their curriculum by having professors use OCW as a resource. Now, the OCW critics will claim that this takes away from the big schools that put content into OCW, but again, that's misunderstanding the market, and assuming a zero-sum game, rather than an ability to expand the overall pie, recognizing that better education programs across the board are a good thing that open up many more opportunities than they take away.