Details of the NYT scheme suggest paywalls won’t save the news industry (on their own)

By March 22, 2011 One Comment

image The New York Times released details of their paywall last week and they are a) complicated, and b) full of holes that people can exploit to avoid payment.  I’ve been saying for a long time that paywalls aren’t the answer and the fact that after a year of work the NYT have come up with a solution that is inelegant and has enough holes that most people will avoid payment has only strengthened my conviction.

How the paywall works:

  • Users will get free access to up to 20 articles per month, to get more they will have to become a subscriber
  • Of that 20 no more than five can come direct from a search engine referral in any given day
  • But links from social media (including blogs, Facebook and Twitter) will always be open.  They will count towards the 20 per month limit, but users clicking on a social media link will be shown the article even if they are over their limit of 20 for the month.

On top of that the pricing is complicated, with different prices for different regions in the states as well as different bundles of offline and online, and as Daring Fireball says and Apple and others have shown, pricing should be simple.  As an interesting aside, NYT have decided to sell through the Apple App Store and swallow Apple’s 30% take, but they won’t sell through the Android app store.  So the only places you will be able to subscribe are iTunes and the NYT websites.

I’m guessing that the ease of exploiting the social media loophole is pretty obvious to most of you.  Techcrunch does a good job of listing different ways of doing so, but amongst the most obvious are create a blog that links to every NYT story, or create a Twitter account that collects all the NYT feeds in one list (already in existance at @FreeNYT, one week before the paywall goes live).  It is also possible to hack through the paywall, e.g. by creating a browser extension that fakes referrals from other publications or pretending to be a Googlebot (details of how here).

The reason that the NYT have created such a tortuous scheme is of course that they realise that without wide distribution the value of their brand and business will fall quickly.  Wide distribution means people need to be able to find them on Google (at least to an extent) and know they can share links that people will be able to access.  However, these are precisely the reasons why a paywall is the wrong way to go, and why I can’t see news companies making much money out of them.  Paywalls could be a useful revenue stream, but only to compliment advertising on their free properties and other schemes to make more money from their biggest fans and heaviest users.

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