Talking about paywalls without talking about tablets is just wrong
Mike Masnick published a piece on Tech Dirt yesterday about how the better-than-expected success of the New York Times “paywall” doesn’t mean it’s actually “working.”
In March, when the Times re-introduced its subscription element, Masnick called it “the world’s stupidest paywall.” Now he insists that, despite a report that digital subscriptions are expected to pull in $91 million for the newspaper this year, the paywall “has done little to create a new and sustainable business model.” (He does, however, acknowledge that what the Times has is not even a paywall, which is a point I made a couple of days ago.)
He then spends the rest of the article arguing that, because paywalls limit scale, because the Times’ ad rates haven’t gone up since the paid element was introduced, because the Times got a bunch of people to subscribe through a cross-promotion with Lincoln, and because, he guesses, people have “just paid up for the hell of it,” the paywall hasn’t actually been truly successful. He also adds that the Times offers no “added value” for paying users.
Throughout the entire piece, however, he makes no mention of tablets or smartphones. That’s a huge flaw, because not only do such mobile devices represent the future of reading, but they also provide an opportunity for publications to make some sort of paid content model work.
Tablet editions of newspapers share as much in common with dead-wood newspapers than they do websites. For a start, they’re “leanback” devices, suitable for media consumption, but difficult to work on. Secondly, they’re much more portable than desktop computers, and even laptops. A smartphone, for instance, is always on you. Carrying around a tablet today is the equivalent of stuffing a newspaper into your coat pocket, except the electronic device has a few other doo-hickeys included and instead of doing the crossword puzzle you play “Clash of Clans.”
While it’s simple to get around a paywall on desktop, where the keyboard lets you easily delete the code at the end of a URL to remove a monetary blockade, there’s a fair chance that the “leanback” iPad reader is willing to pay for the convenience of direct delivery rather than execute the workarounds that would otherwise let him read the content for free.
So, counter to what Masnick claims, subscribing to the New York Times does actually give you “added value” – you get unfettered access to its smartphone and tablet apps, and its HTML5 Web app for iPad. A good number of people – about 600,000 and counting, including paywall-averse me – have decided that’s worth paying for.
It’s not only the New York Times that has learned that people might be willing to pay for journalism delivered via the tablet. Many people gloss over the fact that The Daily, which is dead because it couldn’t generate enough revenue to sustain a staff of 120 people, was able to attract more than 100,000 paying readers, despite being an iPad-only publication that was less than two years old. Marco Arment’s The Magazine, another iPad-only publication, became financially self-sustaining after only a couple of weeks, based purely on subscription revenue. Even The Guardian, the paragon of free Web news, has seen fit to charge for its iPad edition. Subscriptions start at $10 a month – not cheap!
But here’s where Masnick’s argument sounds most retrograde: Just as Web-oriented people have looked at newspaper people as dinosaurs with outdated models struggling to adapt for a new era, now Web people who argue for their own models in the mobile era are themselves starting to look outdated. Just as the Web – and Craigslist – up-ended news publishing models, smartphones and tablets are now having their turn at disruption. It just so happens, however, that these devices are more friendly to subscription models than are desktop-mediated websites. Like the ancient medium of paper, these new platforms are, for better or worse, highly conducive to passive reception. People use them while they’re being lazy, and going by the $1 million a day that iPad-first gaming startup Supercell is pulling in, plenty are happy to pay to hold on to that laziness. Can they circumvent the paywalls? Sure, if they really want to. But do they really want to? That’s a different question.
I don’t have enough data to be able to make a confident pronouncement on the future of tablets as serious money-makers for newspapers. Certainly, if tablet readers don’t want to pay for the news delivered to their devices, they have plenty of free options to choose from. And research from Pew shows that “a large majority” of tablet owners don’t want to pay for news on their devices. Mind you, it’s likely a “large majority” of readers have never wanted to pay for news on paper, either. At the same time, I believe there is room for a variety of publisher business models – from totally free to totally paywalled to something completely different – just as there has been in the paper era. Compare the free community newspaper, for instance, to the $1 city paper.
On the other hand, it’s increasingly clear that tablets and smartphones will become the dominant news reading platforms of the future. Earlier today, Pew released a new report showing that tablet ownership had jumped 15 percent among American adults in the space of a year. Now a quarter of the US’ adult population owns a tablet. Pew’s research also shows that 66 percent of tablet or smartphone owners read news on their mobile devices, and that they’re willing to read long stories on them. More than 40 percent of mobile consumers say they’re now getting more news, and a third say they are adding new sources, according to the same report.
Meanwhile, in 2013, good tablets will be as cheap as $100 in the US. In the UK, the Times of London is offering new subscribers 32GB Nexus 7 tablets for just $80 a pop. More people are spending time in mobile apps than they are on desktop-mediated websites.
In short, we are in the midst of a tablet explosion that is once again reshaping media consumption. That shift is going to affect how people read their news and how they pay for it. It’s too easy to write off paid news subscriptions as a failed a model, and too naive to say they’re going to be the savior of publications everywhere. All we can say, for now, is that we’re in the middle of an exciting and frightening transition that presents both challenges and opportunities.
It may be hard to write headlines around that disappointing truth, but it’s better than writing one that in 20 months will come back to bite you in the ass.
[Illustration by Hallie Bateman]