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Monday, January 31, 2011

Ad Week: Pay Walls Crumble

The New York Times effort presents a half measure
The New York Times is ignoring the deep flaws in its online business model, say industry observers, blowing a chance to transform online publishing by instead opting to earn a few quick bucks, writes Mike Shields at adweek.com.

Based on the details that have emerged, the Time’s meek metered approach will result in just 15 percent of readers paying for content access—a figure unlikely to start a revolution.

And even though the company announced its plans a year ago, few publishers have joined the cause, outside of several U.K.-based papers and Long Island’s Newsday—neither of which have generated meaningful numbers of paying subscribers.

It was quite a different story a year or so ago when getting paid for content was increasingly seen as essential to the industry’s survival, given the overabundance of online ad inventory and the subsequently low CPMs.

Yet industry observers say that the appetite for pay walls has diminished significantly as the economy has improved and social media has become increasingly crucial in spreading Web content. “The thinking is you need to be part of the online conversation,” said Benedict Evans, an analyst at the U.K.-based Enders Analysis. “You can’t give readers a taste of content with a pay wall.”

Plus, a consensus seems to have emerged that most online readers just won’t pay. “It’s tough to add a pay wall. The market is so competitive,” said Peer Schneider, svp of content publishing at News Corp.’s IGN Entertainment, which began charging for access during the dot-com collapse, only to see traffic suffer.

Read more here.

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