David Carr, media columnist for the New York Times, spoke at SXSW Interactive Sunday about the newspaper’s paywall and business model during a panel Sunday.
Carr’s talk was entitled “Gates of Heaven, Gates of Hell” — Heaven being “friction-free” digital distribution of information, and Hell being the fact that no one wants to pay for content in that same digital world.
“Content has always been subsidized,” but the Internet is now the largest subsidy of all. The Internet took away the trucks and printing presses, and created the “biggest distribution machine of content you’ve ever seen.” Carr said this has created a subsidized media world.
This is how things used to work, according to Carr: People would graduate from college, get married, reproduce, go to Ikea and start to worry about the school system, so they would subscribe to a newspaper. Things are different now, he said. People “may practice the art of reproduction, but they don’t do a great deal of it.” They might not get a job, buy a house or go to Ikea. They might not need to know about the school system. So there’s one more thing they might not do — get a newspaper subscription.
Carr said the problem is that content is almost infinite, so its value will gradually creep toward zero. He said “anything that’s infinite has no compression on pricing.” Attention, on the other hand, is expensive. There is a very narrow group of people who have money and care about the news, he said.
The newspaper industry is now half the size it was in 2006, and Google alone is twice as big. Newspapers are now launching paywalls in desperation, Carr said. Newspapers like the Times-Picayune only come out a couple of times a week, and The Atlantic does advertising for Scientology. “How the hell did that happen?” Carr asked.
Carr said “you find out who your real friends are” when newspapers go behind paywalls.
However, Carr said the New York Times hasn’t “lost uniques” since the introduction of the paywall. There are 800,000 print readers and 640,000 digital readers of the paper.
“There are 640,000 people who were giving us nothing,” he said. “Now they are giving us around $200 a year.”
Carr said the Times was told at first that no one would pay to view the paper’s content online, and the paywall was priced too expensively. The fact that the paywall is leaky and “you could do a workaround” to access the content was seen as “silly,” he said.
“We did that on purpose. If you’re willing to play around with our URL just to get a peek under our dress, have at it,” Carr said. “You’re eventually going to get tired and pay.”