To publish behind a paywall

News Ltd has moved to erect paywalls around its news content in an attempt to make publishing online news profitable. The exact details of the paywalling are yet to be finalised, but a subscription or freemium model is the most likely scenario (Clark, 2009), whereby general users can access some of the stories on the news site, while payment will be needed in order to access more specialised areas.

Although the immediate effect of paywalls will be to reduce readership, as those members of the audience who are unwilling to pay are lost, the smaller, paying audience will provide a new income stream. Whether this is enough to make a profit is doubtful. The advantage, however, will be a more dedicated audience, one that can be leveraged for further profit.

With paywall income being insufficient to make a profit, leverage is what it’s all about.

While sites like Google leverage their massive user base in order to turn a profit from advertising, their audience is loose and untargeted, their profits depend on the massive numbers of audience they reach. The paywall model, rather than seeking relevance for a wide cross section of the community is about grasping and holding a smaller, but more committed, audience. It’s about leveraging a targeted market, whether for advertising, for classifieds or for associated product promotion.

In the era of The Long Tail niche markets are king. Paywalls are designed to capture a dedicated niche market, which can then be leveraged to make a profit.

References:
The Guardian Rupert Murdoch plans charge for all news websites by next summer
The Long Tail – Chris Anderson’s Blog