Removing Paywalls on Coronavirus Coverage is Noble. It Also Makes No Sense.

Imagine you operate a once-profitable business that has recently fallen on hard times. Revenue is down. Way down. Then, suddenly, there’s a newfound interest in your product. Demand is up. You have an opportunity to bring back some of that lost revenue. So you look at your prices and decide … to give away your product for free.

How’s that for a business strategy?

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2 thoughts on “Removing Paywalls on Coronavirus Coverage is Noble. It Also Makes No Sense.

  • April 6, 2020 at 10:11 am

    paywalls are nonsense in the first place … if you wish to chase your readers away, put them up …
    people who have come up with them must have been bean-counters not steeped enough to pass at least economics 101 …
    those who get their news online are already paying their providers for access to the medium of the internet …
    when you’re selling newspapers (the newsprint product), the cost at news stands or delivery to your doorstep covers basically just the delivery: both the newsprint and ink are way too expensive for the price of sale to cover the cost …
    it is advertising revenue that keeps journalists living in the style they had grown accustomed to …
    putting up paywalls, you demand that your customers pay for delivery TWICE (service provider, AND you) … from the statistics i have seen, paywalls always, without exception, cut into the number of eyeballs …
    now, you’re not paying for newsprint and ink to spread the gospel according to you online … are you still surprised there are so many alternative sources people turn to instead of using you to get their news? if you are, you should not be in this business …

    • April 7, 2020 at 7:26 am

      That logic is misguided Peter. The cost to pay for internet access has nothing to do with the cost to produce the news, let alone the cost to maintain it either through the physical printing and delivery or technological infrastructure. Even in Digital-Only products there are web developers, designers, product managers, reporters, editors, writers, photographers, data infrastructure staff, QA specialists, web analytics, server administrators, and all of the other overhead that businesses have.

      By your logic Netflix, Hulu, Amazon Prime, Disney+, Apple TV and all other streaming services should also be free (because you pay the internet service provider and the content producer). News is “Content” and there is a significant cost of time and resources to produce it just like any song, movie, TV show, etc.

      There is a legitimate argument that has been going for some time about the monetization strategies and business models of news organizations/media companies. The truth is that ad revenue alone just does not sustain the business anymore – at least not in the way people advertise today.

      Impressions, clicks, and even programmatic targeting have become commoditized. It is easy to track, cheap to buy, and easy to determine the efficacy of the marketing dollars spent. Other social platforms have driven prices down by delivering easy access to the eyeballs of millions of potential customers.

      If you are a local paper and don’t have the massive scale that large national or global news organizations have, then you stand almost NO chance of getting ad dollars from large advertisers directly. So, you end up going through ad platforms like Google’s Doubleclick, The Trade Desk, or MediaMath. And if you don’t have that skill hired in-house you often outsource it to an agency to manage it (another middleman). As the publisher producing the content you end up with CPM rates of under $4 and sometimes under $2. That WILL NOT sustain a local news organization.

      The crux of the problem is that you can’t charge the same CPM rates digitally that you were able to sell in “Print circulation” for decades. Modern marketing has shifted away from most print publications which has killed Print Advertising and consumers are now more likely to consume the content digitally than read a paper anyway. This is a big problem when the lion-share of revenue for most of these local publications is Print Advertising.

      So what are you left with?

      Begging for government grants, philanthropy of people just donating out of kindness, or… a PAYWALL. Certainly, the shelf life of news has plummeted sometimes down to hours or minutes. That story you read could have taken weeks of investigative research and countless man-hours to produce and gets published on social media for everyone to consume for free. How is a business suppose to survive in that scenario? Worse yet, the advertising dollars generated by that content doesn’t go to the original source. It goes to Facebook or other social platforms because that is where it was shared and most of the eyeballs where.

      There are few options left to keep locally produced news alive other than a paywall. There are other revenue generators like recognition awards, events, and special products. Some news organizations even make money on giving tours of their newsroom. These companies need to evolve to survive but at least a paywall gives them a fighting chance while they figure out other services they can offer that supplement or even subsidize the news.

      It would be a sad day when legitimate and trained journalists have nowhere to go but companies like buzzfeed and TMZ because their local news source couldn’t deliver a sustainable business model. Then again, maybe people would rather just read 280 characters on twitter. Is that what this world is coming to?


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