Competition is fierce on the Internet, where surfers are fickle and substitutes for virtually everything are cheap and plentiful. Years ago, newspapers began to hemorrhage paying subscribers, with free news sites being preferable to daily papers. Some big newspapers, such as the New York Times, eventually began to feel the pinch as too few newspaper subscriptions remained and online ad revenues were not making up the difference. So, to regain lost revenue, these papers began to create paywalls
to block non-subscribers.
But will they work? In 2010, Business Insider reported
that 82 percent of users would leave their favorite news website if it began charging for online subscriptions. However, sites like The New York Times
have not folded, revealing that some sites can indeed retain enough paying digital subscribers to make it worth their while, with Mercy Pilkington of Good e-Reader reporting that the NYT saw its online subscribers increase
over time rather than decline.
, however, asserts that The New York Times is in a unique situation. Other news sites, lacking a loyal readership, will fall prey to news aggregator sites like Yahoo! News, Google News, and Digg, among others, which compile news articles from many sites and offer them to readers for free. And while newspapers may want to erect paywalls for their websites, many people can get free news from national sites like CNN, ABC News, NBC News, and CBS News.
Will people pay for local news when they can get national news for free? News websites run by television networks can be subsidized by network revenue from TV ads, while newspapers, even large ones, raise less revenue from paper ads.
Another problem that will doom most paywalls is the plethora of freelance writers and bloggers, who can write about current events in free articles. Readers can keep up with current events by reading popular blogs, essentially getting the same information from pay news sites for free. Why subscribe to the NYT, the Washington Post, or the Wall Street Journal if you can read the same information from your favorite bloggers?