Is Paywall Dead on Arrival?

Nathan Thompson   December 20, 2010
Coroner’s Cause of Death: Paywall-itis (image via Great Beyond)

It could have been worse.  That’s likely the refrain of newspaper publishers nationwide now that the Newspaper Association of America released its most recent quarterly numbers.  The report paints a (slightly) improving picture for publishers, with overall revenues declining by the lowest rate since the first quarter of 2007.  However, these good vibes do not extend to the digital side of the house.  As the report indicates, online increases appear to be stalling, with digital recording its smallest increase in the last several quarters.

Not surprisingly, then, publishers continue to brainstorm ways to bolster online revenue.  While a number of unique ideas have been proposed – the Journal Register is attempting to expand the number of digital revenue streams from 13 to 60(!) – publishers appear most interested in online subscriptions.  Numerous companies – international powerhouses like New York Times and local papers like the Augusta (GA) Chronicle – are making plans to institute paywalls, and some of them will undoubtedly succeed.  Witness The Times of London.  Despite the recent PR black-eye, sources report that the site is now firmly in the black.

But subscriptions clearly aren’t for everyone.  As Arianna Huffington so eloquently put it, “people don’t like paying for news and opinion…unless it’s financial stuff or very, very weird porn.”  Truly differentiated content – the Wall Street Journal, the Financial Times, and, possibly, the New York Times – can make the paywall work.  But most publishers aren’t in that position.  So another approach is likely necessary to grow digital revenues moving forward.

At Razorfish, we believe it’s best to work within the current system.  Consumers have been viewing content on the web for free for almost two decades, and it’s going to be extremely challenging to change that behavior, especially in a few short months.  For these reasons, we’re actively developing an alternative monetization model – one that relies on user engagement to “turbocharge” existing revenue streams.  This model – which we’re calling the “playwall” – focuses on employing game mechanics to develop stronger, more productive relationships with consumers.

In the coming months, we will post a more detailed overview of our plans here.   In the meantime, please feel free to reach out to us or leave a reply below with your ideas, questions, or inspirations on this concept.

Brought to you by your Playwall Team: Nathan Thompson, Robert McCutcheon, & Raashi Bhalla.

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One Response

  1. Refreshing to see your thought – working with the existing system & turbocharge existing methods.

    The way forward could also be to reduce the cost of generating news. Build community of contributors. Seek information from people. Let publishers become a broadcast platform. The world badly needs a ‘YouTube’ for news.

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