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A leaky paywall won’t keep the Globe and Mail afloat

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Globe and Mail Publisher Phillip Crawley

According to the publisher of Canada's National Toronto Newspaper, the Globe and Mail will now try to make its readers to pay to read its on-line content -- a trend established by the New York Times last year with limited success.

Phillip Crawley told his assembled troops on Thursday that the paper "will implement a metered paywall system this fall, asking readers to pay if they read more than a certain number of articles each month."

Crawley's announcement was greeted with hoots of derision by the Globe's readers in the resulting story's comments section, with the principal themes beyond general hilarity being "so long Globe, it was fun while it lasted," and "I've read the New York Times and you're no New York Times."

Ever since the Internet laid waste to the modern newspaper's business model -- which had made scads of money for newspaper publishers for more than a century no matter how bad their product or how brainless their management techniques -- the corporate press has been looking for a way to get the toothpaste back into the tube.

Giving their product away for nothing for a decade to anyone with a computer and an Internet hookup certainly didn't make the job any easier, but the problem the World Wide Web created for newspapers went far beyond in that it completely subverted the local market exclusivity enjoyed by papers and their advertising in the pre-Internet age.

Given the revenue newspapers used to generate and the number of people whose livelihoods and bonus packages depend on the industry's continued profitability, one can hardly blame their publishers for praying for something like a paywall that works. The trouble is, the Globe's scheme is unlikely to work very well.

The initial success of a newspaper paywall depends on two key factors:

1)    That the paywall is secure

2)    That the content it protects is unique and valuable

The technical and managerial brainiacs at 444 Front Street West can probably come up with something that meets the first criteria -- barely -- but only because most computer owners don't understand the capabilities of their own machines.

The New York Times paywall -- apparently built at a cost in excess of $40 million US -- is ludicrously easy to defeat. It took your 60-year-old blogger -- who, admittedly, was only 59 when the Times erected it -- less than 15 minutes to breach the wall.

Nevertheless, enough Times readers apparently have cash to burn or insufficient knowledge of their Web browsers' operations to be prepared to make a $15 monthly contribution to that paper's bottom line.

It's not entirely clear, though, how much that's really helped the Times’s profitability. The paper has reported a 13-per-cent increase in circulation revenue, but it doesn't break out how much of that comes from paywall payees. Nor do we know the cost of the Times's promotions to get readers to sign up for the paywall, how many stick around when they run out of incentives or the impact the restricted access is having on other Times operations.

We do know that after initially giving away 20 stories per month, the Times recently cut that total to 10 -- presumably in the likely vain hope that would stop more readers from simply dropping the Times for the rest of the month once they’ve opened their last story.

And as we know only too well from the days of papers made of paper, once a reader has stopped reading for a while, it's remarkably easy to quit forever!

We also know that huge numbers of Web users, who reckon they're already paying enough for their dubious Internet service, simply will not pay extra for on-line content, no matter how good it is, thank you very much.

As for requiring readers to pay to use the Globe's phone app, most mobile users will find an easy solution to that one: delete it.

Be that as it may, the Globe's mocking readership likely nailed it on Point No. 2 -- the Globe really isn't the New York Times.

The Times still has in its employ the likes of Paul Krugman to write informatively and entertainingly on the economy and Maureen Dowd on the love lives of the elected heads of Europe, plus a large staff that provides a significant number of stories readers just can’t find anywhere else.

The Globe has what? Peggy Wente dissing the Occupy movement day after day after day and Jeffrey Simpson droning on about how it's vitally important to Canadians that the poor Greeks take big pay cuts, really it is…. Zzzzzzzzzzzzz…

Other than that, there's not much there that you can't still get for free from your local Postmedia News or Sun Media rag. And if they put up paywalls, trust me, someone will continue to provide news for free if only to get you to read or do or think something else.

Does Crawley seriously imagine that very many people are actually going to pay for the Globe's not-very-exclusive drivel? Please! Does he think on-line newspaper readers who have resisted the Times's pitch will fork over the dough to read the pale grey imitative Globe's uninspiring reportage? If so, good luck to him!

Unknown in all this -- at the Times and certainly at the Globe -- is the long-term impact paywalls have on on-line-advertising revenues.

Purchasers of on-line advertising will be seriously concerned that the people who want them to pay good money for ads will be working hard to ensure potential customers don't get to see them.

The Globe will have a pitch worked out to answer this -- the best readers with the most money are paying to get behind the wall, just the kind of customers you want, yadda-yadda -- but it’s far from certain advertisers will buy this kind of baloney.

One of the great things about on-line ads is you can pick and choose the publications in which you want your ads to appear, and it is said here that many advertisers will not choose the Globe because of its paywall.

If advertisers say "hell no, we won't go," the Globe will lose far more in advertising revenues that it could gain in on-line subscription fees.

Indeed, the real background to the publisher's announcement came later in the story: "Mr. Crawley also told employees that the paper would ask staff to take unpaid leaves this summer in an attempt to temporarily reduce costs."

If the Globe is so desperate it has to stop paying staff to survive, a leaky paywall to protect uninspired copy produced by overwhelmed journos isn't going to save it.

This post also appears onm David Climenhaga's blog, Alberta Diary.

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