Tuesday, January 18, 2011

NY Times story says metered paywalls have little effect on traffic; sample was small, and paywalls loosely applied

What a bizarre story Jeremy Peters has written for the NYT. It is a little bit of unpaid promotion for Steve Brill's Journalism Online and the idea that metered paywalls can work for publishers.

It is bizarre because in the end the story admits that whatever good news is to be found in the claim that traffic does not dramatically after instituting one of these metered paywalls, the story goes on to say that, well, the traffic did go down a bit, the newspapers who implemented the strategy were small to mid-sized papers, and the sample size was only about two dozen in size.

This morning's story was one of those where I instinctively tilted my head in confusion, much like a dog that hears a voice on the television. What's this all about?
You'd like to think that this was one of those stories that is simply a modified press release for Journalism Online, though it could be an attempt to preempt the critics that are bound to come out once the NYT itself puts up its own version of a paywall -- and it is coming pretty soon.

I've been fairly neutral about the paywall issue. I am against them, in general, except where financial and some other B2B properties are concerned. But I'm willing to be persuaded by evidence that paywalls can succeed in the consumer space. To me, the biggest test so far has been in the UK where Rupert Murdoch's papers are behind the paywall. There, it appears traffic has indeed cratered, though the company itself is claiming that things are going along swimmingly.

A metered paywall is something that is truly hard to test fairly. The reason is that if traffic falls too far one can always argue that the paywall was put on too tightly -- that is, the reader was not allowed to read enough material for free to entice them to come back often. On the other hand, if traffic stays about the same, the only real measure would be whether lots of revenue is generated -- and if not, some would argue that the paywall should have been tighter.

It is incredibly frustrating to many publishers that only the WSJ (and a few other sites) have been able to lock down a reasonable amount of their content and still generate significant revenue. But then again, few publishers will admit that their own products are not unique and that readers will find that they can live without it. It may be a big lie, but it helps them sleep at night.

The reality is that we all continue to seek those magic bullets that when fired will solve our fundamental problems of decreasing readership and declining ad sales. It would be terribly frustrating to find out that the only solution was better content and stronger ad team -- how old school is that.