A few months back, Emily Bell, The Guardian’s director of digital content, promised that the debate about paywalls would become “a new battleground of publishing ideologies”.
Sadly, the debate has so far produced no more than rhetoric – enough of it, surely, to power half-a-dozen general elections and a lifetime’s supply of Prime Minister’s Questions. The remaining rhetorical energy – and there’s a good bit left over – would probably keep the lights on across northern England for most of the coming winter, if only we could find a way to feed it into the national grid.
On the surface, the dividing lines seem clear. On one side stands Rupert Murdoch, who argues that “an industry that gives away its content is simply cannibalising its ability to produce good reporting”. On the other stand those who argue that paywalls represent an evolutionary dead end in the context of the link economy.
Several combatants deserve campaign medals. Among them: Jeff Jarvis, the journalism professor who cranks out dark verdicts on paywall advocates with the single-mindedness of a munitions factory operating round-the-clock shifts during the Second World War.
A few months ago, Jarvis compared paywall advocates at The New York Times to an ill, poverty-stricken grandmother who can’t “afford the drugs she needs to save her life”. The Grey Lady, he argued, is being forced to “look around the attic for any heirloom she can sell on the corner”. More recently, Jarvis has argued that paywalls will be “not only futile but possibly suicidal” for most newspapers.
Likewise, there’s Michael Wolff, the biographer of Rupert Murdoch, who ridicules The Digger’s inability to come to terms with the web. According to Wolff, the 78-year-old press baron “doesn’t get email, doesn’t use a computer, can’t get his cell phone to work”. Sure, Murdoch will “change the web”, says Wolff – if he can find it.
There has been posturing aplenty on the other side, too. Earlier this year, Robert Thomson, a former editor of The Times and a senior confidante of Rupert Murdoch, delivered an eye-catching condemnation of free content that invoked metaphors of infection and sexual excess.
Remarkably, Thomson described Google a “parasite or tapeworm” that “devalues everything it touches” by encouraging “promiscuity” among readers. Analogies like these suggest that a Taliban-style ban on unrestrained online intercourse is required. Only this, it seems, will “socialise” readers out of their decadence.
Amid all of the name-calling and hyperbole, it’s worth focusing on a few realities.
Murdoch may well have become the figurehead of the paid content movement, but this does not, as some suggest, make him a genius. Instead, what makes Murdoch remarkable is his character and context. As a risk-taking entrepreneur running a $30 billion-turnover quoted company, Murdoch is one of the last representatives of a near-extinct species.
Like most entrepreneurs, Murdoch is capable of conceiving great enthusiasms that can be dropped rapidly if they don’t work out.
The second thing worth noting about Rupert Murdoch is the delicate chemistry that exists between external shareholders and dynastic ambition at News Corporation. The company is 38 per cent owned by the Murdoch family; the rest is held by outside shareholders. In recent years, these outside investors have tolerated, rather than encouraged, Murdoch Senior’s fetish for newsprint.
But now the squeeze is on. The operating margin of 6.8 per cent that News Corp generated on $1.4 million of newsprint turnover during Q2 is unacceptable. The prospect of Murdoch’s UK-based newspapers racking up losses of $100 million this year is beyond the pale.
Something must be done. Promising to change the rules of content consumption buys Murdoch more time than the piecemeal efforts to shore up margins that most chief executives would bring to market. Murdoch is also being forced to test the paywall thesis because News Corporation is the obvious candidate for the job.
News Corp owns The Wall Street Journal, the world’s most successful subscription-based newspaper website. It also controls 36 per cent of the national newspaper market by circulation in UK.
Coincidentally, the UK just happens to be (a) the world’s most competitive newspaper market and (b) the world’s most intensive digital economy, as measured by per capita e-commerce spend. If News Corporation wasn’t leading the charge on behalf of paid content, investors would want to know why.
So should we expect a simple, brutish effort to “end the free ride” – as so many commentators have suggested? Not everyone thinks so. At Paid Content, Patrick Smith, who has followed every twist and turn in the paywall saga, foresees something less radical – a “combined print-and-online subscription model” that will “fulfil [News International’s] primary objectives of selling more dead tree papers”.
Politics weaves in and out of ideological debate at Guardian Media Group, too. Notably, Donald Trelford, a former editor of The Observer, rubbished The Guardian’s ad-funded digital model earlier this month, claiming that it generated “no revenue”.
Loose talk like this has a tendency to endow the notion of paywalls with silver bullet status.
Accordingly, it wasn’t too surprising to see The Guardian’s Emily Bell publicly ticking off a blogger who recently suggested that the paper would erect a paywall. “We are not contemplating a pay wall,” wrote Bell. “Nor as far as I’m concerned would we ever.”
With the indignation of a teacher who sits down on a fart cushion after returning from lunch, Bell went on to describe paywalls as a “stupid idea”, adding that Rupert Murdoch will “no doubt find this out”.
Instead, Bell argued that The Guardian will continue to base its strategy “entirely around reach and audience engagement”.
But here, too, ideology gets blurry. The Guardian, for example, appears to be working on a “members’ club” for readers, an exercise in affinity marketing that might offer access to “live events” and “additional content” (which will no doubt be located behind some kind of paywall).
As for those live events, they’ve excited the attention of Simon Jenkins, the former Times editor who now writes a column for The Guardian. Rightly, Jenkins argues that newspapers should be “staging everything from commercial fairs to sporting events and arts and book festivals”. The live economy is booming, and newspapers are well-positioned to take advantage.
Elsewhere, at the Telegraph Media Group, e-commerce is inciting much interest. Affinity presents an opportunity here, too: digital director Brian Harrison recently disclosed that a mere 2 or 3 per cent of The Telegraph’s users generate 30 per cent of its online revenues.
Accordingly, Edward Roussel, the paper’s digital editor, dreams of a future in which an e-commerce application will recognise the name of a rose mentioned in an article – and serve up opportunities for readers to buy that rose or something close to it.
Paywall, shmaywall: the ideological bogey-man is growing tiresome. Scrape away the crusty layers of ideology, and peer through the political filters: what’s emerging looks bigger than a binary dilemma.
Increasingly, the question isn’t about whether or not to introduce a paywall. It’s about where to locate it: around content, reader affinity, affiliated retailers – or at the entrance to festival tents in the British countryside.
If Murdoch’s fundamentalism galvanises British newspapers out of their tribal conservatism, it will have served its purpose.
For many US newspapers, and many British local newspapers, it’s too late. This is a quest that should have started a decade ago. But let the chips fall where they may: what matters is that the search for new revenue has finally begun.