As is being passed about the interwebs, for the first time, the internet has surpassed newspapers as a source of news for those surveyed. Everyone is aware, even the New York Times, that print is on the way out, at least as far as news goes. This news comes as even more significant because of recent events involving the old guard of the news world and some big bets being made in regards to the emerging players.
First, we have The New York Times, probably the single most visible newspaper in the world, erecting a paywall. We've already seen the effects that paywalls have on readership. Newsday implemented one and received, after three months, thirty-five subscribers. Thirty. Five. They then took down the paywall for about a month, which caused a small spike in their Alexa numbers, which immediately went back to its pathetic standing after the paywall was reinstated.
News Corp. instituted a paywall for the Times of London, reducing its online readership by 95%. Two websites that have paywalls but remain successful are both financial, The Wall Street Journal and The Economist. What that means, I'm unsure, but I doubt that it's a coincidence. Furthermore, the "paywall" of the Wall Street Journal can be largely bypassed if you always enter through Google search. I also know that the Economist's paywall isn't absolute, since I've read many articles on their site.
Paywalls are a disaster waiting to happen for whichever publication is stupid enough to try. But on the other side of the coin, they are a massive opportunity to any enterprising competitors, which is exactly what's happening with the recent AOL purchase of The Huffington Post. First off, I think it was idiotic that Yahoo! didn't buy the Post first, but that's another story. Second... off?... we have the New York Times complaining about The Huffington Post, calling them thieves, following a similar charge levied by The New Republic (which, shocker, is also behind a paywall). It is not at all coincidental that these comments are coming after AOL's buyout.
Further evidence of the coming shakeup is the supposed "AOL Way" that is being pushed out to all of AOL's online properties, including mega-blogs like Engadget. This strategy, and truly the strategy of Huffington Post from the beginning, has only one goal: to dominate the online newscape. The number of stories being produced is going to be staggering, and even the copy of those stories will be SEO'ed. Any competitor who's stupid enough to go behind a paywall will immediately be decimated by open competitors who are optimizing their entire site to draw in as much traffic as possible.
AOL is positioning itself as the replacement to any news organization that shoots itself or otherwise fails to adapt. The AOL Way is the core of this mission. Yes, we'll have lots of boilerplate garbage, and lots of aggregation meant to do nothing more than draw search clicks; but the more of that AOL can manage, the more quality production it can afford, eventually leading to a massive, dominating news presence. What these news stories indicate is that AOL seems to understand something that the old guard is completely incapable of grasping.
AOL understands that the biggest issue is not now, nor has it ever been, people being unwilling to pay for news. Obviously, they are willing; when that access is the only game in town. That's what made newspapers valuable. For a long time, in any given area, they were the only games in town. That meant a very limited and focused pathway from advertiser to consumer. The internet has changed that. It's not piracy or entitled consumers. It's the very CORE of economics. When there are more competitors, the value of whatever is being produced goes down.
Thus, the issue is a huge drop in per-person advertising value. Theoretically, that should be more than compensated for by the large increase in the size of the audience. Each person is worth less, but there are tons of them. Instead of embracing this, old-world companies are desperately clinging to their old models. Well I'm sorry. You can no longer expect to get multiple dollars of daily revenue for each reader. Per person revenue is now measured in cents. It's Econ101. Get used to it, otherwise, AOL is going to eat your fucking lunch.
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