Fixing the Paywall Model--One Suggestion

How I Would Fix the Paywall Model

By Joe Wikert | Posted on February 03, 2014, from BookBusiness

The digital content industry is infatuated with a paywall pendulum that keeps swinging back and forth, from one extreme to the other. Remember when paywalls were considered a roadblock to achieving the broadest reach possible and all the revenue problems could be solved with advertising?

That didn't work, so now a lot of publishers and pundits are saying paywalls are the future (again). Paywalls are rapidly going up around content that used to be freely accessible with no limits. On the one hand, I think this makes sense. After all, how can newspapers expect consumers to pay a monthly subscription when the exact same content is available for free on the publisher's website?

I don't think the paywall concept is inherently bad. I just think the way it's being implemented (again) follows the same faulty logic that caused publishers to abandon it earlier.

Here's how I'd fix the paywall model: Make it like the I-Pass system.

If you're not familiar with the Illinois highway toll system you might not know how the I-Pass model works. Other states have similar systems and they all feature a dashboard transponder device allowing drivers to avoid the stop-and-go tollbooth delays.

Imagine an I-Pass-like subscription that lets you get behind the paywalls of all your favorite news sites. Rather than one paywall for this paper and another paywall for that paper, one monthly fee grants you access to everything. Your monthly payment is then pro-rated across publishers based on whose content you consume.

Newspapers will hate this because each one believes they should keep 100% of your subscription. They'll also hate the idea of having to split a subscription fee with the competition. There are two factors that need to be considered here though: total reach and born-digital alternatives.

Publishers might be content to have 100% of the revenue from X subscribers. But what if X could become 2X, 10X, 100X or more? Even if the resulting subscription is shared with other publishers it's quite possible every publisher will earn more than they can by building their own paywall. A federation of newspapers supporting one common paywall would be much more appealing to consumers than today's model where every site has its own paywall.

For those publishers who don't buy into this logic, I suggest they consider reading The Innovator's Dilemma. There they'll quickly discover that the startups they're competing with aren't focused on keeping 100% of the revenue and they're not tied to yesterday's revenue models. These startups are all about disruption and the smart ones will pool their resources (and paywalls), causing more of yesterday's market leaders to tumble.

The digital content world continues to evolve but the paywall model has remained static. I'm reminded of Einstein's definition of insanity: doing the same thing over and over again and expecting different results. It's time to modify the paywall model before it's once again deemed a failure.