The Internet Paywall

It’s beginning to look like we’re going to pay—or pay more—for content we get digitally.  First, the Economist announced that 2010 will be the year of the paywall with many newspapers such as the New York Times, the Guardian, the Times of London and others charging for content under different schemes.  The reason (apparently) is the decline of online advertising revenue.  And just today, Amazon gave in to Macmillan’s demand that customers pay between $12.99 and $14.99 for Macmillan e-books.  As Peter Kafka points out, this probably means that e-book prices across the board will be going up.  Publishers are even beginning to research the pros and cons of making money off tweets.

So what does this all mean for the way in which we will surf the web in 2010?  Quite a lot, actually.  For starters, as normblog points out, “this is not good news for bloggers.”  It isn’t good news for blog readers either.  If the best a blogger can do is re-type an article or (due to copyright laws) summarize it, the reader, will have to trust the blogger to get the story right.  In other words, you will have to trust that the amateur (generally speaking) news reporter will not read what he/she wants to read but what’s actually there.  And how much credibility will even big, well-established news blogs such as Huffington Post continue to have if they can no longer direct their readers to articles in the New York Times?

It’s also not good news for Google, Yahoo, and other search engines.  According to a recent study, approximately 26 percent of readers use Google to find news stories.  Will people continue to do that if they know they are unlikely to read the articles free of charge?  (This is unlikely to impact the 44 percent of readers that, the same study found only glance at the headlines on Google.)

As for e-books, the prices that Amazon and other s now charge will make used bookstores competitive once more.  It remains to be seen, of course, if people will stop using their kindles and start using the used book stores but, in these times especially, it seems a distinct possibility.

So will charging for Internet content work?  Will the paywalls make publishers money?  Andrew Sullivan thinks that, at least when it comes to newspapers, it will not.  But I suspect that there may be a long-term and a short-term answer to the question.  I think that in the short term it probably will work.  Search engines like Google probably will lose a portion (perhaps a significant portion) of their readers while newspapers probably will pick up paying readers—in the short term.  And bloggers, especially news bloggers, probably will lose some credibility with their readers.  It’s even possible that used book stores will pick up a few customers.

But in the long term, I am not sure this will make much difference.  The bloggers will adjust—and because the most successful ones give people a sense of community online—the bloggers will retain most of their viewers and, hence, most of their advertising.  And, since most bloggers are not major operations, the loss of some viewers and advertising will not force them to go out of business as it were. In the long-term, I suspect the newspapers will want a share of bloggers’ online advertising, leading the newspapers to enter into various arrangements with the successful news-bloggers.  As for books, once the used book stores start competing with Amazon, Amazon will (once again) drop its prices. 

Of course that’s just my opinion—and I have been known to be wrong.  What do you think?