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The paywall must work

The paywall must work
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First Published: Wed, Mar 30 2011. 01 15 AM IST
Updated: Sat, Jul 02 2011. 03 23 PM IST
For some unexplainable reason charging money for news content online has acquired a bad reputation for itself. Whenever a large media company implements a system to charge readers for access, the Web explodes in a flurry of criticism and analysis, most of it negative.
One predominant view is that content should be given away for free. The resulting traffic could then be monetized via advertising. Some people like to call this the Google model. The search giant charges money for merely a tiny fraction of all the services it provides. Yet the audience it has is more than sufficient to prop up its mammoth advertising business—96% of Google’s revenues in 2010 came from those smart little advertisements.
Other criticism is targeted not at how content is monetized but what it does to the open, inter-linked nature of the Web. Still others interpret this to be an issue of whether newspapers will survive.
Earlier this week The New York Times (NYT) globally rolled out a new metered payment system that gives readers access to some content for free and then let a meter kick in after a point. Readers have been offered various pricing options based on what devices and platforms they use.
While there has been debate about how well the system works and how much it costs, one thing is certain: the success of NYT’s venture will have profound impact on journalism.
Content can be free to consume. But good quality content is almost never free to produce. Newsrooms cost money.
The Google model does not work for good journalism. To see why, one only needs to look at an Indian news-stand. Few major newspapers are priced anywhere close to cost of production. Almost all of them depend on advertiser income to survive. Such overwhelming dependence comes at the cost of unbiased content.
There are no doubt tremendous inefficiencies in the way legacy media organizations work. Many still thrive on the entry barriers created by expensive printing presses. This must change.
But if the reader isn’t going to pay for the news, then media companies will either run out of cash or, eventually, run out of ethics. Both mean the end of good journalism.
The NYT venture has plenty of commentators. But will it get enough subscribers?
Are gated news websites a viable business model? Tell us at views@livemint.com
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First Published: Wed, Mar 30 2011. 01 15 AM IST