So if we don’t have paywalls.. what happens when there’s an advertising crunch?

People like Jeff Jarvis have been leaping up and down with joy over the fact that the New York Times has torn down its paywall. Jarvis makes the very good point that part of the reason people wouldn’t pay for stuff was that it wasn’t *useful* content; it was just blather.

TimesSelect’s brilliant cynicism was that, when forced to find something to put behind a pay wall, they came up with content that was, indeed, uniquely valuable — the columnists and archives. But this was also content for which there was no significant ad revenue at the time (advertisers buy ads in food and travel but not opinion sections; there is essentially no endemic advertising for blather).

Now, as I posited earlier in my post about the iPod moment for newspapers, I think that blather – aka Phil Space and Polly Filla telling us the uncompelling tales of the navel fluff they discovered today, you’ll never guess where – is not going to sell well when someone does figure out the right sort of reader and format for us to look at papers on a mobile device. (No, it is not the iPhone.)

In which case we imagine newspapers which are all going full steam and stream ahead with interesting, factual journalism and interesting stuff from all over – for the definition of news is, of course “stuff I care about, stuff I want to pass on”.

This fleet of zeppelins will be kept aloft by the munificent benificience of the advertising community, who find it so delightful to be alongside stuff like we produce that they’ll pay good money for it. Even though the indication seems to be that people aren’t that easily distracted from what they’re doing on a screen; when Jakob Nielsen asked people to find out the current population of the US from the US Census Bureau webpage, they actively ignored the Javascript ticker that told them because it looked like an ad.

OK, so if we don’t get paid for anything on the site directly – we tear down the paywalls (which I agree are annoying as hell) – then what happens when there’s an advertising crunch? The last one isn’t so far behind: the beginning of 2001 saw a serious contraction which really hurt newspapers (particularly the Independent, where I then was; people lost their jobs).

The present credit crunch in the markets is already reported to be leading to tighter moneylending for businesses (though not, yet, consumers) which is going to lead to more tightening of belts. Which squeezes already-straitened marketing and ad budgets. Sure, you think things are good now; but not planning for how you cope with bad times is part of how you get into bad times. After all, the 1991 recession was what nearly killed The Independent – that, and taking on the expense of launching the Sunday Independent, which had seemed a shoo-in when ad revenues were rising, but as Stephen Glover recalls in his memoirs of the time, launched into the teeth of an advertising recession.

Yes, Alan Rusbridger did joke – probably accurately – that the income from TimesSelect probably wouldn’t pay the heating bill for the new NYT office. Then again, it must have paid something – it must have generated some profit.

And looking around, the most noticeable paywall I see is on New Scientist. If you want to read all the articles, you either pony up for a subscription or you subscribe to the paper mag. (Personally, I think it’s consistently terrific.) Nature and other scientific magazines follow the same path. Clearly, they’ve got a USP: what they do, nobody else does. Newspapers can’t make quite that case.

I just don’t want to be standing on the ground when one of these Hindenburgs catches fire, is all. Nor, of course, do I want to be in the one that does.

(Thanks to hydrogennow for the pic. Renewable hydrogen, eh? As opposed to which sort?)

2 thoughts on “So if we don’t have paywalls.. what happens when there’s an advertising crunch?”

  1. Scott Rosenberg was saying something similar last week. I am really not looking forward to the next big crunch, which I reckon is about six months away, or whenever Bush bombs Iran, whichever comes sooner.

    What would be interesting to know — to carry on my column of tomorrow — is how much more effective text ads than multi-media ones. I suspect the most effective ad of all is the entry you get by gaming google’s pagerank, which is interesting, because it derives its value from the fact that it can’t legitimately be bought at all.
    It certainly doesn’t pay for content, does it?

  2. It all depends on what market you’re in. In B2B publications, I think we are already in a recession particularly in tech fields in which in the last five years a number of companies have merged with their competitors and automatically killed half your ad revenue at the same time.

    The real worry is when you already have 90% of your advertising base, most of whom are increasing their spending on online advertising which is significantly cheaper than what you would get for a print ad, and decreasing print spending. The only logical solution is to start turning your online product into a very different product that your print publication so that you can bump up the eyeballs viewing your content and attract new advertisers, which will hopefully make up the shortfall (see New Scientist and IEEE Spectrum for examples of this). Unfortunately its not a cheap process and doesn’t answer the question of what to do when all advertising sectors get hit with a recession (the subscription model still wouldn’t protect you in the long run). If I knew the answer to that I would be a rich man…..

Comments are closed.