Not as schadenfreude, but as a witness to the inevitable showdown over paywalls. The smell of righteousness is in the air. It’s a cheap high, and will grow tiresome quickly, but it’s good to have this moment becaue it means we’re one step closer to finally arriving at a sustainable way to pay for journalism.
Jon Paton: The subscription project: An update
The reviews (from most sympathetic to most critical):
Matthew Ingram: John Paton says what most media CEOs won’t about paywalls — they are a short-term tactic at best
Ryan Chittum: John Paton, the Gorbachev of paywalls
Mike Littwin: Paywall blues: Denver Post Running on Empty?
On paywalls, I wrestle with two conflicting realities. The first is that news reporting is labor, which is a scarce good, and therefore is subject to the usual laws of economics, the foremost being there is no free lunch. The second is that when supply becomes infinite, the usual laws of economics don’t apply, and prices approach zero. When a product, such as music or text, can be reduced to digital bytes, the supply approaches infinity.
The rub is that while the fruits of a journalist’s labor (news stories) can be digitized, the actual labor (reporting) cannot. At least, not yet.
It will be no small feat for the innovation-challenged news industry to establish supply/demand traction in the gravity-free internet. In this work, the decline of advertising revenue may be a necessary, if painful, prompt, because it is forcing news publishers to build direct producer/consumer relationships with readers, who are a newsroom’s only true long-term customers.
For their part, readers will find it more difficult to avoid paying for news reporting (i.e., labor) simply by avoiding paywalls. Heavy newsroom layoffs since 2006 have reduced reporting costs by about a third, but the remaining costs are significant and must be borne by someone — if not advertisers, then readers, mostly. And as paywalls A) become more prevalent and B) are locked down tighter (fewer “side doors” to the news via Facebook shares, etc.), readers will find it increasingly difficult to go to the next website to get the same news, free. Super Bowls, political conventions and natural disasters aside, news is becoming less of a commodity. In most towns, there is only one source of consistent, quality watchdog local-news reporting, and it’s not TV. Niche blogs are filling some of the vacuum, but generally only on statewide or national scales.
Consumers will decide if that news is worth paying for, and their answers will force even greater changes inside newsrooms than the past decade of advertising erosion has forced.