by Timothy Lee
Mon, Dec 17th 2007 6:36pm
Here at Techdirt, we've been paywall skeptics for a long time, and the last year has given us a lot of examples to support that view, as company after company has dropped their paywalls. Jim Harper points us to the latest example of a failed paywall-based business model, although this one is a little sadder than the others we've covered: TechDaily, an in-depth tech news service for the inside-the-beltway crowd, has announced that it will close up shop early next year. TechDaily's paywall was a lot higher than the other paywalls we've seen fall this year: Jim Harper reports that a year's subscription could set you back more than a thousand bucks. In the late 1990s, that was worth the money to the well-compensated lobbyists who depended on it to stay abreast of the latest developments in the regulatory issues affecting their clients, but it appears that competition has intensified and TechDaily wasn't able to hold onto enough subscribers to stay in business. Jim switched to the dramatically cheaper (but still not free) Tech Law Journal long ago. And others may have concluded that they could get enough information from blogs and mainstream news sites that it wasn't worth the extra money for TechDaily's exclusive coverage. I suspect that the biggest weakness of TechDaily's business model was that it's extremely difficult to grow your subscriber base when you've got such a high paywall. Traffic growth on the web requires that you be part of the conversation, and a high paywall means that not only will ordinary readers not be able to read your stories, but a lot of bloggers (including me) won't either. Which means that even if you've got a great product (which by all accounts TechDaily did) very few people are going to find out about it, and even fewer will be willing to shell out the thousand bucks it costs to find out if it's worth the hype.
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