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On Winnipeg Free Press’ Pay-Per-Article Paywall

Last week, the editor of the Winnipeg Free Press wrote an article making a (rather poor) case for their upcoming “innovative” paywall experience. Harvard’s Neiman Journalism Labs even picked it up and wrote a great article breaking down the nitty gritty. Simply put the Winnipeg Free Press plans to charge every single reader $0.27/article (billed monthly). Nobody in North America is doing this and nobody in the world has tried anything quite like this, so in that regard, it truly is an innovative idea.

However, there is a fine line between an innovative and a bad idea.

As far as I can tell based on the information they’ve released, Freep’s plan falls on the bad side of that line. Whatever committee makes these decisions at The Free Press seem to be misunderstanding some fairly basic principles about how the web works.

User Experience

For starters, any sort of road block that requires a user to create an account before getting to content is a significant barrier to entry. As usability pioneers Neilsen Norman Group put it “Login walls do not belong in the initial experience.” If a user clicks through to a news article from social media and is presented with a login wall, that user will just leave, period. I have a hard time believing that the Free Press’ research would show otherwise. The news market in Winnipeg has a lot of viable free/ad-supported content. Three daily newspapers, a vibrant sub-reddit and blogging scene. If someone wants to find out about something on the internet, they are going to visit the first site that actually displays information without making them jump through hoops.

There is a reason that successful paywalls like the NYT’s show users X number of free articles before ever asking them to sign up or pay. It’s not because these papers don’t need to maximize their online revenues. Precisely the opposite, they understand that presenting a paywall to every; single; drive-by visitor is going to do more harm than good.

Micro Payments

$0.27/article is hardly a “micro” payment.

$0.27/article is outrageous, maybe even just plain greedy!

Anybody who’s dealt with online advertising can come to this conclusion fairly quickly. The revenue earned by a individual webpage (ie. the cost to advertise) is calculated in CPM (cost per thousand views), $0.27/article works out to $270CPM. The going rate for the an ad on a highly popular website with a good audience in a desired demographic $70 – $100CPM, possibly upwards of $150 – $200CPM for a large takeover type ad. When The North Face advertises on, they’re looking at advertising budgets in that ballpark. On the other hand, an ad on Facebook or Google AdSense will cost an advertiser $0.50 – $5.00.

If I had to guess, the rates for advertising on are likely in the $50CPM range. So from that perspective the Winnipeg Free Press is attempting to charge their readers 2-5x as much as they charge their advertisers!

When compared to other media/entertainment the Free Press’ pricing model doesn’t make a lot of sense either. In the article, the editor writes “If you are a Winnipeg Jets fan, then you can assemble a month’s worth of game stories and Gary Lawless analysis that will cost you as little as $8.00.”

One month’s worth of hockey analysis costs as just shy of a Netflix or Rdio subscription. The pricing is totally out of whack.

Ad-Support. You’re the Product.

When a business is based on an ad-supported model, the reader is not the customer. The readership is the product, the advertisers are the customers. When you read an ad-supported website, you may not be handing over any money, but not getting the content for free either. Every time you load a page you are handing over valuable demographic information. I think most people understand this by now, but it’s worth reiterating.

Normally, when an industry experiences increased production costs, they pass those costs on to the customer. When the price of fuel goes up, airlines increase the costs of fares, grocery stores increase the cost of produce.

If a business is losing revenue, will try to present their customers with new and innovative products. Charging readers for access is doing nothing to create a more innovative product for the Free Press’ real customers, the advertisers. If anything, it’ll turn potential readers aways, decreasing the Free Press’ ad inventory.

Obviously I realize that newspapers and magazines have always cost money for as long as they’ve existed. But I had always thought that those costs were covering the cost of printing and distribution. In the past, newspaper ads paid the larger fixes costs of producing news, running a large company and lining the pockets of their investors. At least until Craig’s List came along and killed classifieds.
I understand that quality news-gathering costs money. If the Winnipeg Free Press’ cost are anywhere near as high as the exorbitant per-article rates they are rolling out, then they really are in trouble. And that’s too bad.
I wish them luck.
Culture Tips & How To's Websites

Thought of the Day: Newspapers Websites

I’ve posted about newspapers before, the industry’s seemingly imminent collapse and lack of success online are interesting problems to me. As far as I’m concerned, newspapers (and “old media” in general) are still a relevant source of information and there’s really no reason they should be dying.

As Erica Glasier put it on her blog the other day:

They take raw information and give it the context that years of newsgathering provides, and the clout of accuracy commiserate with the individual media org’s brand.

The Problem

I am under the impression that newspaper website are struggling to make ends meat because online ad revenue is not making up for their losses in print distribution. On top of that in their attempt to keep up with the times by added commenting functionality to their sites, they’ve degraded the experience of their online presence. Much to nobody’s surprise news site comments are often filled with trolls, bigots, spam and other meaningless drivel.

My Thought

An extremely simple solution to address these two problems would be to charge a small monthly subscription fee for access to the commenting system. Somewhere around $3 – $5 per month.

Being required to go through an ecommerce transaction should be enough to deter outright, viagra-selling-spammers who depend on bots and cheap labour to blanket the internet with spam.

But also, in theory this small fee should  discourage trolls and other nuisance commenters who are likely to register an account on a whim, if registration is free and easy. These same types of people would be very unlikely to shell out a few bucks just to spew racial slurs. In the case that a fee isn’t enough to discourage unwanted commentors, having an account tied to a credit card makes it much more easy to ban an individual; it’s quite a lot more difficult to get a new credit card number, than it is to get a new email address and register another account. Site’s like Metafilter have been using this tactic for years.

Would anyone actually pay to comment?

I’m really not sure, but I think it’s worth a shot. It’s clear that blanket paywalls don’t really work – they sort of break the internet and nobody wants to pay just to read an article similar to another one posted elsewhere for free. Blocking comments on controversial topics works to a degree, but reasonable dialogues about controversial issues are often fascinating.

I believe that every newspaper has core audience who would pay a small fee to comment.

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How To Fix: The Newspaper Industry

I found this post sitting in my drafts folder from earlier this year. Seeing as I haven’t updated the blog in awhile, I thought I’d finish off some of the sentences and hit the ‘publish’ button.

The newspaper industry is facing the perfect storm of declining readership, declining print ad sales, lackluster online ad revenues, the ever-present threat of blogs and the real-time web.

I had a Eureka! moment earlier today when I originally started this post, it occurred to me – newspapers could learn a lot from the Nine Inch Nails distribution model. In a nutshell, the NIN model concedes that music is free, instead of trying to charge people for something that already free, they charge fans for limited edition tangible goods: things like special run vinyl, signed copies of things, tee-shirts, etc.

A couple of ways I think the newspaper industry could add value to their dead tree version:

1) NO ads
2) ONLY distribute coupon type ads in print, don’t make them available online. Encourage advertisers to pay extra for these premium coupons.
3) Free stuff – throw in some tickets to stuff, maybe a glossy photo of scantily clad firefighters. Whatever the audience would apprieciate.
4) Allow subscribers to opt-in to receiving an email copy of their favorite section of the newspaper. An emailed copy would be easy to take with you on a mobile device like an iPhone without having to lug around a fat wad of paper.

I have no idea how the finances work out for any of these ideas. I just really think that if the print newspaper needs to survive, then publishers need to inject some value.