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Executive Report - By Thomas Baekdal - June 2012

The Future of Paywalls

The future of content consumption is link-based, socially sharable (and sometimes sourced) content, consumed in multi-sourced content aggregators, across multiple devices, and on a global scale.

Every single day you can read a ton of articles from media professional arguing for and against the paywall. Most call them backward looking, saying that they are being slammed in people's faces, and only put in place to save the newspapers' old print business models.

But there are many different types of paywalls. There are those that close the door and make you feel like you are walking into a wall every time you want to do something. And then there are those that don't; the non-slamming paywalls that reward the loyal reader.

The first kind, the one that gets in your way is brilliantly illustrated by Basil Fawlty in the video below:


The traditional paywall is blocking people from using your online news site. It is blocking you from reading it in a convenient way. It is blocking any form of sharing, and generally taking the reader hostage in exchange for money.

But, the idea of asking people to pay money for your product is not backward looking; that is future looking. That's how every single business on the entire planet operates. Apple secured its future by asking people to pay for their products. You don't get to have an iPhone for free, in exchange for iAds in their apps. That would be silly.

Money is not backward looking. It's future looking.

The problem we have today is two things:

  1. Most newspapers do paywalls the traditional way, and it forces people to disconnect from the connected world. Just look at how bad sharing works, or how impossible it is to follow what you like on different devices and in news aggregators that you care about.
  2. The product (that is newspapers as the bringer of news) has become obsolete. I don't need the Wall Street Journal to tell me that Reuters reported that Al Jazeera reported what some guy in Syria posted on Twitter.

Two weeks ago I was covering the 24 hours of Le Mans with my social tracker. And the social news stream (which is just a curated list of tweets from teams and drivers) provided far more news than any newspaper could ever bring.

During the free practice, the commentators speculated why the Nissan DeltaWing had stopped on the track, and they had no clue. At the same time Nissan tweeted that it was because the fire extinguisher had gone off causing the electrical system to shut down.

If your commentators spend all their time telling people that they have no clue, while the audience already knows the answer, why are you here? You are making the wrong product.

And this is the problem with almost all articles about paywalls or anti-paywalls that we see today. They are discussing the wrong kind of paywall (the traditional disconnected one) trying to sell you the wrong kind of product (news that is already freely available directly from the source).

No matter what you do about that, it's not going to work.

But this doesn't mean that *all* paywalls are backward looking, nor does it mean that news has to be free. It's just one tiny part that is wrong (sadly also the part that 99% focus on).

This *old* type of paywall is absolutely backward looking and has no future. So let's tear down this wall, and put up something else that actually makes sense.

Note: A couple of weeks ago I wrote an article about the paid-for trends, if you haven't read that yet, I suggest you do that first. This report is in many ways an extension of those trends.

The working pay...thingamabob

Before we can even start to discuss how to 'fix' the paywall, we have to first fix the product.

The first problem is advertising. Media companies monetized by advertising will find that optimizing for advertisers, and optimizing for subscriptions will lead you in two completely different directions.

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


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