When Do Online Pay Walls Work?

by on February 19, 2009 · 8 comments

Interesting article here (“Not All Information Wants to Be Free“) by Jack Shafer of Slate. He notes that many people focus on why “pay wall” business models don’t work online, but few people discuss those models that do (i.e., the ones that successfully get customers to pay for access to content behind the wall).  Shafer walks through some of the ones that have worked and concludes:

Not all successful paid sites are alike, but they all share at least one of these attributes:

1) They are so amazing as to be irreplaceable.

2) They are beautifully designed and executed and extremely easy to use.

3) They are stupendously authoritative.

Succinctly stated, the pay-per-view sites are damn unique, offering content or a service that consumers are unlikely to find elsewhere. Of course, that’s a pretty small universe of sites, and unless you content is extraordinarily unique and time-sensitive, I have a hard time believing that a pay wall model will work for most sites.

Importantly, however, Shafer notes that the Internet is still young and business models still have a lot of evolving to do. He concludes his piece by comparing where the Net stands today relative to where broadcast television stood when it was still in its infancy:

If the commercial Internet didn’t get going until 1995, then we’re only 13 or 14 years into the Web era. When television was 13 or 14, practically no pay-TV operations existed outside of a relatively few cable television operations. Starting the 1970s and then in the 1980s, paid TV in the form of HBO and other premium stations started to take root. Radio, born in the early 1920s, didn’t arrive in a paid form until just early in this century. Very few online newspapers or magazines are sufficiently useful to demand a paying premium. But for those who hold dear the notion that information on the Web will forever want to be free, it’s early yet. Keep your eyes peeled for publications whose Web sites are sprouting nonbrowser apps, refining their content, experimenting with new reading devices, bulking up their databases, and above all, publications that are listening to the man from Google who this week wrote, “[O]nline journalism is still in its relative infancy. … The experience of consuming news on the web today fails to take full advantage of the power of technology”

  • bradencox

    Here's a thought: if we place too much emphasis on “free” are we confining ourselves to merely average? I think it can reasonably be said that content supported by advertising tends to appeal to the general public (the masses), and this is true despite that content can be segmented to different audiences. A continuing tension with free is that the more eyeballs that can be monetized the better for the publisher, and the better for the publisher's consumers (the advertisers). It will always be the case that those with a more critical need (and the means) will pay for specialized, often better content.

  • Jardinero1

    The author fails to consider pornography as an innovator in the paywall business model. They manage to get numerous users to pay. They even have the temerity to abuse those same paying customers with malware and identity theft. How do they do it? It is not unique, beautiful or authoritative.

    My own experience as a business person and salesman for twenty years leads to a different conclusion of when a person is willing to pay. People will pay in one of two circumstances:

    1. When they are afraid.
    2. When you appeal to some inherent vice, i.e. greed, sloth, lust, et al

    There is lots of online information that is unique, beautiful and authoritative; ninety nine percent free. The one percent that is paid for is better explained by fear and vice.

  • Jardinero1

    The author fails to consider pornography as an innovator in the paywall business model. They manage to get numerous users to pay. They even have the temerity to abuse those same paying customers with malware and identity theft. How do they do it? It is not unique, beautiful or authoritative.

    My own experience as a business person and salesman for twenty years leads to a different conclusion of when a person is willing to pay. People will pay in one of two circumstances:

    1. When they are afraid.
    2. When you appeal to some inherent vice, i.e. greed, sloth, lust, et al

    There is lots of online information that is unique, beautiful and authoritative; ninety nine percent free. The one percent that is paid for is better explained by fear and vice.

  • Jardinero1

    The author fails to consider pornography as an innovator in the paywall business model. They manage to get numerous users to pay. They even have the temerity to abuse those same paying customers with malware and identity theft. How do they do it? It is not unique, beautiful or authoritative.

    My own experience as a business person and salesman for twenty years leads to a different conclusion of when a person is willing to pay. People will pay in one of two circumstances:

    1. When they are afraid.
    2. When you appeal to some inherent vice, i.e. greed, sloth, lust, et al

    There is lots of online information that is unique, beautiful and authoritative; ninety nine percent free. The one percent that is paid for is better explained by fear and vice.

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