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As Murdoch and Sulzberger Dream of Paywalls, Consider Poor Newsday's Example

Perhaps the only way to figure out what is actually going on in the media industry these days is to not get too mired in the daily, weekly, or even monthly details, because the pace of news has quickened to the extent that even the small army of us here at BNET could never hope to cover everything of interest to the average media exec.

Take the issue of paywalls.

Everyone knows about Rupert Murdoch's threats, and the The New York Times' plans, but while those industry leaders prepare their well-publicized initiatives, what is the actual experience of the publications that are out ahead of the curve on this?

Newsday provides a cautionary example here. According to a report in the New York Observer this week, since moving its web content behind a paywall last October, Newsday has lost a third of its traffic and has been able to convince only 35 people to date to sign up for an online subscription.

That's 35 subscribers out of the former audience of 2.2 million! (According to Nielsen this number has dropped to 1.5 million since the paywall was adopted.)

Ouch! Does that sound like an effective business strategy?

Meanwhile, the focus on monetizing online content via computers continues to strike me as a diversion when the audience is moving to mobile platforms ever more rapidly.

Now that Apple has entered the e-reader sweepstakes, a prediction from Gartner sticks in my head:

  • By 2013, mobile phones will overtake PCs as the device of choice to access the Web worldwide. The numbers at that time will be 1.82 billion mobiles vs. 1.78 billion PCs, but the gap will grow quickly from then on.
The paywall question will not be settled over laptops and desktops. This is a battle that will be won or lost by content companies over platforms like the new (and poorly named) iPad. Hopefully for their sakes, Rupert and Arthur are paying attention...