Tweet this! Why paywalls are failing the news industry

It's something you have probably experienced firsthand. Coffee in hand, you surf to your favorite online news source (after Catholic Online), find an engaging topic only to click the link and be told that to read the rest of the story, you'll have to subscribe.

LOS ANGELES, CA (Catholic Online) - It's known in the industry as a "paywall" and its purpose is to convince you to pay a few dollars for a monthly subscription to your local paper. It's popular in the news industry and it's a way to support dying print subscriptions and to make up for abysmally low advertising revenues.

It isn't news that the news publication industry is suffering. Print is a loss for most newspapers now and online delivers miniscule returns. Newspapers have survived only by slashing overhead, closing presses, laying off workers, cutting journalists and turning to bloggers and amateur newshounds for coverage.

The result is that a few major media outlets dominate the news and hundreds of smaller outlets are scrambling desperately to capture revenues and remain afloat.

According to the blog, "Reflections of a Newsosaur," about a third of all publications are charging for their content. However, not many people are paying for it.

It's a challenge for publications to get subscribers because the news is still free on the internet. Major news outlets still provide free access to the news. Few people are willing to pay for news when the same content is free elsewhere.

The only solution for publishers is to provide value to readers. Publications such as the Wall Street Journal are capable of providing unique value to readers, so business-minded readers are willing to pay for the subscription which not only informs a conservative, pro-business worldview, but is also a bit of a status symbol.

Few publications can claim such a superb reputation. Some local publishers have had success, especially if they have a virtual monopoly on local news coverage, but these scenarios are rare.

Michael Galloway, publisher of Catholic Online shared this with Newsosaur.

"The NYTimes and WSJ are the exception not the norm. Cowboy and Indian days are gone. Never to come back. The heyday of the newspapers is GONE. They will never make the same dollars as they did before. NEVER. Their massive infrastructure is still their major cost and will be their major downfall. The numbers never lie. Most people who use the internet just will not pay for news. Again, the numbers reflect this. Gannett can wish all they want but the facts are quite clear, the numbers never lie.

"Social networking has taught many things but one thing is quite clear, possibly the majority of people do not care about Old Newspaper BRANDS any more. They just have no loyalty toward them. This is why you see the new news brands popping up and doing fantastic. ie... The Blaze, HuffPost, The Daily Beast and more... One reason why is they are digital, they have no printing presses or ten-story building to support. Just as China has done to the USA in manufacturing, so is the digital news doing to traditional newspapers. They cannot and will not win again.

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"I love paywalls as I am the largest publisher of Catholic news at Catholic Online (catholic.org). Paywalls bring me a massive amount of traffic.

"Here are our stats right out of Google Analytics - 2013 vs 2012 to date...

Visits 24.04% increase
Unique Visitors 27.32% increase
Pageviews 21.36% increase

"The numbers never lie. People now in general have an attention span of about 5 seconds. Twitter is the world's largest direct communication software platform. Tweet, Tweet, Tweet. This is the youth of today. Graphics and videos are the attentions grabber, not text.

"I love paywalls. As a publisher and believer in this new business model, many companies like Gannett continue their behavior and keep driving traffic and readers to news orgs like mine.

"New Business formula:
Pageviews equal Ad impressions equal REVENUE. You can carve this in stone."

Paywalls don't work, at least not for the organizations that are attempting to employ them. The only thing that works is value. Providing value in news, which generally occurs in the public, is difficult to do. Companies must either provide a valued worldview or some other uniqueness that people are willing to pay for.

Otherwise, a different revenue model needs to be found.

For their part, consumers should realize that free news comes from a tightly controlled, privately-owned media consortium which controls what news is told, how it's spun, and how much attention to give to the matter. These corporations also control large media empires including television, which subsidizes their online publishing. Ultimately, if the public does not mind this level of filtering and spoon-feeding of their news, then free news will continue to rule the day. Meanwhile, the paywall-dependent organizations will continue to lose money until they change their business model or go out of business.

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