If People Won't Pay A Monthly Fee For Facebook, Why Would They Pay For Newspapers?

from the simple-questions dept

We've been arguing about the long-term problems with paywalls for quite some time now, but more and more newspapers insist that they're "the answer." Of course, they seem to be asking the wrong question. They may be "the answer" to "doing something" in a desperate attempt to slow down people dropping their paper subscriptions, but they're not a long term solution by any means. Beyond the fact that limiting the ability to share or link people to your content takes away significant value, we've also mentioned that it merely opens up a huge opportunity for others to step into the market and replace you. Newspapers don't seem to think this is a real problem, but they are vastly underestimating the threat.

I haven't seen it explained quite as clearly or in such perfect terms as longterm newspaper man John L. Robinson in explaining why paywalls are like "using band aids on a bullet wound (found via Jeff Nolan). Robinson points out that young people today -- such as students -- admit that they're addicted to Facebook, and spend a ridiculous amount of time on the site. But if Facebook put up a paywall of about $10/month (not out of the ordinary for newspapers), they'd find alternatives:
I asked my class of 20-year-old Elon University students how many were on Facebook. All 33 raised their hands. Many of them suggested they were addicted to the social network. (It was all I could do to keep them off Facebook during class.) I asked how many would pay $1 a month for Facebook membership. All raised their hands.

“Five dollars?” I asked. A few dropped out.

“Ten dollars a month?” I asked. Nearly every hand stayed down.

“No one?” I said. “I thought you guys were addicted?”

A student piped up with an explanation: “Someone will invent something else to take its place that is free.”

I shared this anecdote with a newspaper executive when we were talking about newspaper paywalls. I said that if people wouldn’t pay for Facebook, they wouldn’t pay to get through a newspaper paywall.
Robinson then notes that the exec he told this to was dismissive because his students "aren't our readers anyway". But they are the next generation, and any publication that plans to have a future might want to think about what gets them interested... not what sends them running to find alternatives.

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  1. icon
    TtfnJohn (profile), 29 May 2012 @ 7:24pm

    Re: Shortsighted history repeating itself

    Actually, in many ways the hardware and support for same, has turned out to be very lucrative for IBM cause they're still around and doing very well, thank you.

    IBM wasn't dismissive of software when the MS/IBM split occurred. Over simplified they both wanted control of the hardware platform that Windows or OS/2 ran on. MS, having learned very, very well about how to be the alpha predator came out on top of that one.

    Yeah, MS came out on top of that one though not for the reasons you outline.

    Which brings us back to paywalls and why people aren't buying into them for newspapers. Newspapers overvalue their content which is freely available elsewhere, particularly their rewrites or cut and paste inserts of content from news wires line AP, Reuters, CP and others, television, cable and other sources.

    This example illustrates that there's a price where compulsive Facebook users will no longer stay if they have to pay it to get there. In this case it was a choice between $1 and $10 at the higher number a lot of them said "not me!". That seems the price where Facebook's content is overvalued.

    For newspapers that price is much, much lower. Unless you're the WSJ, maybe the NYT and can trade on a specialized audience, a past reputation as a paper of record or something as important. Most papers are neither. Some used to be. Before consolidation in the 70's through 90s gutted editorial staff to pay for mergers that never paid for themselves.

    I don't see Facebook going the paywall route if, for no other reason, than the data mining about their users to support apps and ads is far too valuable as it stands without going a route known to reduce traffic. Even if the data collected is 100% unlinkable to a specific user.

    The students are quite clear that they value Facebook content over newspaper and news media content by saying they'd pay $1 month "membership" fee there while they are doing no such things at news media sites.

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