Paywalls – are they the future to the survival of electronic IP?

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The Times of London recently put up a pay wall on all information produced for their website; you will now have to subscribe to access its contents online. It cost you £1 to access the website for one day and £3 per week.

Blogger Jon Rodoff, wrote a brief history of paywalls (http://radoff.com/blog/2009/11/30/a-brief-history-of-paywalls/):

This article shows that the history of paywalls, although chequered, has produced some success stories. In 2002, Financial Times started charging readers for their online content, yet still managed to increase subscription rates – in fact, the FT achieved a 30 percent increase amongst online subscribers in 2009. While it is easy to take FT’s success as a great case study, it’s important to note that they focus mainly on corporate businesses rather than individuals and they hold a specific position in the market.

Wall Street Journal is another company that implemented a paywall for some of its online content. The paywall itself is only effective when you access the website directly, however one can still access content behind the paywall by going through Google links. So begs the question, has it generated expected revenues for the newspaper?

New York Times earlier this year also announced that starting January 2011, they would place some of its content behind a paywall. Some articles would be available for free, then to read further, subscribers would be required to pay a flat fee to access it.

This begs the question: with so much content on the internet would you want to pay to access information that is readily available on another website?

Early figures, and a study by Nielson Net Ratings (http://www.boingboing.net/2009/11/30/notes-from-a-news-si.html) shows that there has been a significant drop in the newspaper’s online readership since the introduction of paywalls. Like any other website’s success, traffic is essential, it determines the number of advertisers vying for space on a website. Sharing networks affect trends. A story gets shared, and generates a lot of traffic – but if a fraction of those new readers don’t keep coming back for more, will advertisers want to?

The first company to support Murdoch - owner and founder of News Corp, was Apple with the iPad, when it launched a paid iPad application that will support The Times. The Times is now selling full-page display campaigns in to its iPad app, for which readers pay £9.99 per month. This application offers specially designed Monday to Saturday editions of The Times to users, including most sections of the paper - which can be downloaded and read offline. With so much content on the internet will this new business model work? Rupert Murdoch certainly thinks so. He says the introduction of paywalls is vital for the future of journalism and the sharing of information online. Murdoch believes that more and more publications will follow this model to ensure the survival of their businesses.

Is this the future? The next months will definitely tell an interesting story!