Rupert's Paywall is Meant to Keep People In, Not Out

[Commentary] The whole structure of a paywall appears to be aimed at keeping casual web visitors away from the newspaper's content. But, in reality, blocking casual readers -- who are seen as less valuable to advertisers because they don't spend as long on the site and aren't regular visitors -- is just one by-product of having a paywall. And even generating income from those readers by convincing them to sign up for a monthly subscription is only a by-product.

For many newspapers, the main driving force for instituting a paywall is to keep print readers from migrating away from buying the physical product (which still generates the majority of advertising revenue at most newspapers) to reading for free online, where their eyeballs are worth less than they would be in print. Think of it as eyeball arbitrage. The problem with this strategy is that it is fundamentally a retrenchment approach — in other words, a fall-back rather than a move-forward strategy. While it may be true that keeping out casual web users and forcing regular readers to pay may improve online advertising revenue somewhat (since advertisers will perceive paying readers as more valuable than non-paying users), and putting up a wall may prevent some continuing slippage in print readers (although not as much as the paper probably hopes it will), it does little to grow the online side of the equation. Contrast that with the approach taken by The Guardian, which is making its content freely distributable through an open API. If anything, in fact, the paywall approach prevents further growth for an online entity because it puts a wall between the content and those who might help to spread it — in effect, marketing it to others — by linking to it, posting it on Twitter and other social networks, etc. It is fundamentally a resignation from the open web.