The Pay Wall Payoff
June 26, 2010
In the early days of this blog, I recycled some information I had in my files from the 1980s. I believe I mentioned that problem that online throws in the path of the uninitiated. The idea is that you can charge for information online, but you must offer “must have” information. Vanilla information will generate some traffic on a fee basis but the take will be a fraction of what is needed to create the content, market the service, and keep the infrastructure alive and well. The “must have” and “nice to have” distinctions are well known to those who have been able to build commercial online products that actually make a profit. Honk. I am in that tiny segment of humanity. No ads needed, thank you. I have a view that ads – through lucrative – are down market. I like the “must have” approach even though I paddled in a goose pond in rural Kentucky. The millions and billions go to the Wal-Mart like folks. “Times Paywall: Initial Data and Analysis” is one of those semi accurate, pundit thingies. The data are cooked up based on whatever log files are available and from traffic sampling methods. Despite these concerns, one has to be in bizarro land not to see the down ward trend in the chart.
What this means is that the pay wall is a traffic inhibitor. That’s okay as long as the online revenue makes up for the downturn. My experience is that traffic will stabilize and revenues will be tough to grow. The fix is to raise the fee which means less traffic. The end game is that there will be a small number of people will to pay whatever the vendor charges. The problem is that costs go up and revenue does not keep pace. Boink. Bad news. On the brightside, some of the cash from the sale of Beliefnet might help out the pay wall play.
Stephen E Arnold, June 26, 2010
Freebie
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