This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Newspaper Paywall Delusion

NEW YORK ( TheStreet) -- When I first moved to Atlanta three decades ago, I was told the city had one "monopoly" newspaper.

I had to laugh. I came here to work for a competitor to that newspaper, a weekly business paper. We also had a legal newspaper, an entertainment newspaper, a gay newspaper, papers for towns or counties in the metro area and several newspapers focused solely on African American people. Since then, we've had sports papers, Hispanic papers, even a local Korean paper.

Yet, friends who worked at the daily, mass-marketed, mass-distributed paper insisted they held a news monopoly. It was a sense of entitlement I found galling. They were telling themselves something that wasn't true.

That false sense of entitlement lives on in this nonsense about paywalls. The New York Times (NYT) claims great financial success with its paywall. News Corp.'s (NWS) Wall Street Journal does, too. The Washington Post (WPO) is about to erect one.

Never mind that Internet circulation could decline 90% with a paywall, as Monday Note warned two years ago.

The same is true today: Most papers today use "metered" paywalls that allow a little free use, but even these are not halting the industry's slide. As Michael Wolff wrote recently in The Guardian, they don't solve the problem of losing younger readers, or ad revenue.

A Columbia Journalism Review article from last June says the Dallas Morning-News circulation dropped 9 million/month after it instituted a paywall. The Memphis Commercial Appeal saw a 30% decrease in traffic to get 1,000 paywall subscribers. The Columbia Tribune lost 25% of traffic and a shift to a local, free rival in order to secure $80k in revenue.

In a recent profile of Henry Blodget, who runs a competitor to this site, Ken Auletta of The New Yorker repeats the industry script that it's inevitable, that "content must be paid for," that "you can't give it away."

Nonsense. Newspapers "gave it away" in print for a century. The price never covered more than the cost of distribution. What do publishers think is going to happen on the Internet when they all erect paywalls? Do they think the news won't happen, that it won't be published, that people won't somehow find out about it?

The way they run their paywalls shows this isn't so. Newspapers syndicate their stories to other Web sites, which aren't behind paywalls. They talk about their stories on TV. Markets, like nature, abhor a vacuum, and when a local newspaper goes behind a paywall, the TV stations and all the other specialty publications in town fill that vacuum.

Maybe their stuff isn't "as good." Maybe it's not "authoritative." But the nature of news is that it's widely reported, that everyone knows it. Writers want readers, the more the better, and will naturally gravitate to sites with high circulation. You can't hide the news by putting it behind a paywall, any more than you can control a market by claiming to be a "newspaper monopoly."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs