To Pay or Not To Pay, The Paywall Problem?

google vs news corp.001In recent weeks there's been a lot of talk* about Rupert Murdoch and the lashings of complaints that have been laid at the feet of Google for helping people find News Corp. news stories.

Rather than get into the politics of the issue, what insights does this sparring match hold for businesses in understanding the digital world?

The Paywall

Murdoch is proposing that his content, his digital product, will be placed behind a "Paywall". This simply means before you can access the content from a News Corp website sites, you're required to pay.

The introduction of a Paywall has other implications.  In it's most basic form a Paywall will prevent the Search Engines (Google, Bing, Yahoo et al.) from accessing the information and in turn preventing people from finding it when they search in their favourite Internet search engine.  It would be analogous to having a listing in the Yellowpage but not letting anyone see what the listing said.  A more apt analogy may be having a Yellowpages listing but because no-one can read the listing, including the Yellowpages, it can't categorised and no-one can find it.

Learning 1 - Search is king

The Internet is the largest distribution network in the history of man.  You can distribute digital content to over a billion people through their Internet connected devices.  The Internet is largely a "pull" medium where consumers search for what they're interested in and then consume it in their own time.  The key word here is "search".  Without a mechanism to search, the Internet becomes unwieldy and impractical.  Therefore, to make a distribution medium like the Internet work in it's current form, Search is King.  To make sure your business and/or product can be found, it is essential that your Internet properties allow search engines to access them.

Learning 2 - What's Our Digital Business Model?

The Newspaper industry has been trying to find a viable business model for selling their product in the digital age for a number of years.  The existing model is heavily based on advertising and distribution control:

  • Advertising funded the majority of the business.

  • The paper was the only place to get your news.  (Distribution Control, Scarcity of Supply)

  • The press was the only place to get the news out. (Distribution Control)

The advent of the Internet (remember the Information Superhighway?) eliminated the ability to control the Distribution Network of news.  It allowed anyone to broadcast newsworthy information.  It fragmented and reduced the potential advertising revenue.  It changed consumer habits in relation to the consumption of news.

The one differentiator of media produced news is the journalistic rigour involved in crafting the story.  Some may even dispute this.

The market will decide whether this is something that is worth paying a premium for and, ultimately, whether Murdoch's attempts at rescuing an old business model are successful.

The Wrap Up

The learnings for the media industry will continue for some time. For other industries, it's a valuable exercise in ongoing observation.  Particularly if your business or industry sells a digital product.

Where do you think the dice will fall?

*Here's some more details on the News Corp Paywall if you want to catch up.