Wed Mar, 2012 by Derek Mehraban
In another blow for free content providers and advertisers The New York Times has announced that it will be making circumvention of its paywall more difficult. Presently, users can access 20 articles per month without a subscription. That number will soon be cut in half. The thinking is that exposure to the brand will make people want to pay once they hit their free limit. The paper is having so much success with its paywall that it is now confident this reduction in access will draw in more subscriptions.
This is a blow to social media agencies because it signals that users are willing to pay for advertisement free content. The non-paywall business model uses advertising to subsidize the labor, but The New York Times model cuts out many advertisers as well as cutting them out of data collection about what people are willing to pay for.
Advertisers need to do a better job selling the benefits of advertising. Not only can ads offer income streams to publishers but they can also enhance a site and bring more visitors. There are other pitches that can be made and should be pursued. Pitches for soft paywalls, which require less money for a subscription and then use advertising income as further subsidies, should also be made when businesses are thinking about erecting subscription services.
The real problem of this announcement is as an industry wide signal. It is unlikely the industry can all go behind a paywall, but the learning process would take a long time for the new paywalls to collapse and then social media agencies would be denied many publishers until that happens.