Has the paid-content bogeyman lost his bogey?

Submitted by yelvington on September 23, 2010 - 11:40am

A couple of months ago, when a small Pennsylvania newspaper started testing Press+ technology, there arose such a clatter in the online journalism world that you would have thought somebody had set up a Mapplethorpe exhibit in a church lobby.

Yesterday the Knight Foundation announced it was providing the paid-content tools to up to 10 of its local journalism grant recipients to "help set these news sites on a course of sustainability for the important work they perform online."

So far, I've not seen a peep of negative reaction.

Why not? Has the paid content bogeyman lost his bogey? Is it OK for nonprofits and local startups to charge for content, but evil for "legacy" media? Are people just beginning to get a little more sophisticated in their understanding of the issues?

I'm not sure. But I welcome a more calm and reasoned examination of the paid-content question, one that is not marred by ridiculous pronouncements on one side from doddering old fossils who don't use the Internet, and angry catcalls from bitter ex-mainstream online journalists on the other.

The idea of a  "paywall" is a terrible one. The metaphor is one of keeping people out. That's pretty much what Murdoch has done with Times Online, which is sinking like a boulder tossed into the ocean. The "paywall" greets the casual user with a hostility that's pretty much guaranteed to drive him or her away, permanently. Such arrogance is entirely in character for a newspaper industry still stuck on ideas from the fat-and-lazy monopoly era, but it's suicidal in an age where there are millions of alternatives begging for our time and attention.

But that's not the whole story.

For years I've been pushing the idea that we do not have one online audience; we have, instead, a couple of behaviorally different groups that are easy to identify. You can slice and dice an audience in as many ways as you like, but way I find is most powerful is frequency of use. 

On a local newspaper website, you have a huge audience of occasional users and a small audience of habituated users. The difference is stark. When I first documented it seven or eight years ago, crunching numbers from the OnlineAthens.com website, I was flabbergasted. The people who are occasional are really occasional, and the people who are loyal are really loyal.

Journalism Online's Press+ technology is specifically designed to recognize this. It's not a paywall -- unless you configure it to be one. It's actually a rate-limiting technology. There are a lot of free services on the Internet with rate-limiting in place -- Twitter, for example. Some services let you consume up to N units for free, and if you want more, then you should expect to pay. OpenCalais, a semantic metadata extraction service, works that way.

In theory, if you set the rate threshold properly, casual users don't know anything has changed. Heavy users -- the ones who presumably see the greatest value in the site -- are behaviorally identified and asked to open their wallets.

There is a risk, of course, that asking heavy users to pay will drive many of them away. They're not only your heaviest consumers of content. They're also the best audience for your advertisers. Clumsy pricing and poor marketing could turn the whole thing into a debacle.

I've seen the business modeling on this and I can say that it's not a slam-dunk either way. Depending on your assumptions and your guesses (and all modeling is built on assumptions and guesses) you can come out in the red or in the black by asking heavy users to cough up some cash.

But right now, we're in a horrible business climate that has prompted advertising customers to radically roll back their spending. Yesterday 26 people lost their jobs at the Florida Times-Union, which is run by my employer, and 20 jobs were eliminated at the Charlotte Observer, which is owned by McClatchy.  Reasonable people, including my old Minneapolis uberboss Joel Kramer, have said the advertising model for metropolitan journalism is pretty much unrecoverable.

With those facts on the table would be irresponsible not to discover, through experimentation rather than argumentation, whether there's any validity to the notion of user-supported online journalism. 

So in coming months you can expect to see a number of newspapers around the country -- as well as Knight's nonprofit local sites -- trying to get readers to pay. There are a million ways to get this wrong and maybe, if we're all very lucky, only one or two ways to get it right. 

As newspapers make their plans, the circle of decisionmaking naturally widens to include people who haven't spent much time thinking about it. There are big traps that can lead us all to bad decisions: wishful thinking, emotion, naivete, and the arrogance of both old thinkers and new thinkers.  There are a lot of technical questions and knotty user support problems. Yeah, I could write the necessary rate-limiting Javascript in an afternoon, but that's a speck on the surface of a whole planet of underlying issues.

I don't know if a rate-limit model will work. I do know that nobody is going to give us any money unless we ask nicely, and a good first step toward asking nicely might be to drop the bombastic declarations.

Comments

Submitted by Tim Jones-Yelvington (not verified) on September 23, 2010 - 12:38pm
Now I really want to set up a Mapplethorpe exhibit in a church lobby. I bet I could probably get away with that at Joe's new church in Boulder. Rate-limiting technology worked on me at Pandora. I've been listening a lot more heavily b/c my ipod is busted, and when I got the warning I was reaching my monthly allotment I immediately paid the annual fee. This is really interesting: On a local newspaper website, you have a huge audience of occasional users and a small audience of habituated users. The difference is stark. When I first documented it seven or eight years ago, crunching numbers from the OnlineAthens.com website, I was flabbergasted. The people who are occasional are really occasional, and the people who are loyal are really loyal. I wonder if the same is true of most other web portals? Our Knight-supported organization here in Chicago was providing some good content, esp coverage of Chicago Housing Authority, and then kind-of combusted. I think part of what happened was the ED did not come from the non-profit world and had some unrealistic expectations about how fully and sustainably he could be supported by grants.

Submitted by CrosbieFitch (not verified) on September 23, 2010 - 5:54pm
The idea that the published news is a commodity that the reader owes money for, or can be charged for, still exhibits the entitlement mentality inculcated by copyright. It is the labour, the intellectual work, that is valuable, not its reading or distribution. The paywall is the logical (if unviable) approximation to the copyright model, but that only worked because copies were expensive to make and distribute. When copies are free the paywall can only work for esoteric information with limited secondary audiences or that which no-one wants to share, e.g. personally tailored horoscopes. When copies are free, the solution is to sell the production of the news, not access to it. The news production that has been paid for, you publish as part of the deal, and that's publish copyleft (freely copyable). The exchange is "enthusiastic readers' money" for "publication (delivery unencumbered to the public)". Being freely copyable after purchase this enables free promotion - building up the number of paying customers. Selling intellectual work instead of copies (or access) is a major paradigm shift to those who are copyright indoctrinated, but it's the dimensionally correct exchange that remains when all else has been eliminated. Intellectual work for money, money for intellectual work. The copies are free - as they would have been without copyright, as they are now that copyright is no longer effective. But don't forget all exchanges in a free market are voluntary. You don't have the privilege of being able to deliver your goods and then demand payment as if your price was indisputable. You have to offer your news production services and invite people interested in them to commission them - at a price both parties are willing to accept. 10,000 interested readers offer a journalist penny to produce another article. The journalist might just accept. No paywall. No copyright. If it's a good article, they'll do it again.