Howard Owens’s 5,200 word CJR riposte to David Simon on paywalls deserve a reply of its own (outside of its comments section, which at 126 and counting, you should take some time to read).
Owens’s ideas are something of an artifact—conventional wisdom from a few years ago that time and new information have disproved.
Let’s be clear: When it comes to paywalls, the question is settled.
There remain, apparently, a few anti-paywall tropes still making the rounds, and almost all of them show up in Owens’s post. There’s the “readers have never paid for news” baloney and its cousin, “Newspapers are in the ad business, not the news business.” The faulty assumption that readers never paid for news offline sets up the flawed conclusion that you can’t charge them online. The problem is (and it is a problem for the anti-paywall-istas), more and more newspapers are charging online and doing so successfully.
A central premise of the anti-paywall argument is that putting up a paywall means turning masses of readers away. But it’s just not so.
As I’ve written before, the people-won’t-pay stance is/was a core tenet of the digital-news gospel. I use that religious metaphor intentionally: the tenet has been disproven and yet adherents continue to cling to the old beliefs, seemingly unable to process new data that destroys old orthodoxies.
Owens clearly understands that paywalls aren’t all-or-nothing affairs anymore (with notable exceptions like The Times of London). But he writes as if putting up a paywall makes that a paper’s only source of revenue.
He doesn’t take on the main argument for having a paywall—the one reason that negates his whole post: You can put one up, collect new subscription revenue, support print circulation a bit, and, at the same time, keep advertising revenue declines to a minimum. Reading his post, you’d think the options are to either keep everybody out or to let everybody in. But, as well all know by now, there’s a third way, as The Wall Street Journal began showing half a decade ago: A leaky paywall preserves and boosts circulation revenue while allowing inbound links and Google searches from nonsubscribers that bring some ad revenue.
I’ll grant Owens that Simon’s brief post overstated the benefits and consequences of paywalls. The leaky paywall model won’t ensure that “the content of the larger papers is no longer available to aggregators,” for instance. But Owens isn’t just responding to Simon in particular, he’s making assertions about digital subscriptions in general.
Those need to be answered, so I’ll take on Owens’s ten points one by one:
1. “The New York Times is a poor model on which to judge the success of paid content.”
The New York Times is indeed an exceptional newspaper. But it’s still a newspaper. It faces the same collapsing business model facing the rest of the industry.
A metro daily differs from a small-town daily, which differs, from a business paper, which differs from a monthly glossy. But they’re all in the publishing business, some are more closely related than others, and one can learn from the other.
The excuses from the anti-paywall crowd trying to explain away paywalls are starting to wear thin. The Wall Street Journal has had a successful paywall for 15 years, but it was considered a “poor model” by team Digital CW because financial news has monetary value and because its subscribers were all charging their corporate accounts (the latter happened to be wrong, as Bill Grueskin made clear). Later, the Financial Times’s paywall success was written off for the same reasons. Cook’s Illustrated’s niche was supposedly “freedom from ads.” The Arkansas Democrat-Gazette’s paywall’s success in preserving print circulation (flat over the last 10 years) was due to its “virtual (monopoly) over news in their region.” Now the NYT’s massive success is, variously, either because its readers view it as a charity case or because it’s a paper with “key advantages” like its size and reach. But between all these various papers, it’s clear that something’s working.
Owens also says that by Simon’s standard, “the Times paywall is an abject failure” because it can’t support the newsroom by itself:
The Times has a newsroom budget of $200 million annually. The most optimistic estimate I could find for its paywall revenue is $100 million.
But that’s unfair. Nobody, much less Simon in his CJR piece three years ago, thinks paywalls alone should or could support a newsroom. They’re an additional revenue stream, and Simon explicitly said that in his piece.