Prepare for the New Paywall Era

Alexis C. Madrigal, writing for The Atlantic: If the recent numbers are any indication, there is a bloodbath in digital media this year. Publishers big and small are coming up short on advertising revenue, even if they are long on traffic. [...] In a print newspaper or a broadcast television station, the content and the distribution of that content are integrated. The big tech platforms split this marriage, doing the distribution for most digital content through Google searches and the Facebook News Feed. And they’ve taken most of the money: They’ve “captured the value” of the content at the distribution level. Media companies have no real alternative, nor do they have competitive advertising products to the targeting and scale that Facebook and Google can offer. Facebook and Google need content, but it’s all fungible. The recap of a huge investigative blockbuster is just as valuable to Google News as an investigative blockbuster itself. The former might have taken months and costs tens of thousands of dollars, the latter a few hours and the cost of a young journalist’s time. That’s led many people to the conclusion that supporting rigorous journalism requires some sort of direct financial relationship between publications and readers. Right now, the preferred method is the paywall. The New York Times has one. The Washington Post has one. The Financial Times has one. The Wall Street Journal has one. The New Yorker has one. Wired just announced they’d be building one. (Editor’s note: CNN is building a paywall, too.) Many of these efforts have been successful. Publications have figured out how to create the right kinds of porosity for their sites, allowing enough people in to drive scale, but extracting more revenue per reader than advertising could provide.

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