{"id":725,"date":"2013-04-26T05:09:41","date_gmt":"2013-04-26T12:09:41","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=725"},"modified":"2013-04-26T05:09:41","modified_gmt":"2013-04-26T12:09:41","slug":"strategic-gaps-in-the-paywall","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/strategic-gaps-in-the-paywall\/","title":{"rendered":"Strategic gaps in the paywall"},"content":{"rendered":"

\"paywall?<\/a>At Slate, Matt Yglesias reports<\/a> that advertising revenues are down, but subscription revenues are up, at the New York Times<\/em>:<\/p>\n

I’ve been skeptical about digital subscription models for a long time, but I’m turning into a believer. A key change has been the development of technological means of making the paywalls actually pretty porous, which turns them into more a form of price discrimination than anything else. A well-designed paywall attracts revenue from hardcore fans of a website while still making it possible for casual fans to read the occasional article and thrifty people to sneak around it. The Times Company is announcing a “New Strategy for Growth”<\/a> today that seems largely focused on developing finer-grained forms of price discrimination, such as making it possible to buy a cheap subscription to just a sub-set of the overall NYT content.<\/p><\/blockquote>\n

Why does a well-designed paywall allow some people to sneak through? There are two ways papers make money: subscriptions and advertising. The pricing model for subscriptions needs to take into account the advertising side – make what you can from people who are willing to pay for the subscriptions, but from people who are not, do not worry about letting them through, since it helps boost advertising demand. It can’t be made too<\/em> easy to sneak through, since in that case the subscription base would collapse. So in the same way that Broadway theatres make it possible, but inconvenient, to buy day-of-show tickets at half-price, so the Times will make it possible, but inconvenient, to get through the paywall.<\/p>\n

There is another consideration. I would venture that the consumer demand for the Times<\/em> is in some degree dependent upon network effects. That is, I am more interested in reading the Times<\/em> the more I believe that other<\/em> people are reading it – I want to be ‘in the loop’. When demand is influenced by network effects, it can make sense for the producer to allow some people (but not all!) to sneak around the paywall, in order to build the size of the network. For example, if I were making an office software package that I wanted to become the dominant seller worldwide, I would not be upset if some<\/em> users, especially from places with low ability or willingness to pay for the good, found a way to get free copies.<\/p>\n","protected":false},"excerpt":{"rendered":"

At Slate, Matt Yglesias reports that advertising revenues are down, but subscription revenues are up, at the New York Times: I’ve been skeptical about digital subscription models for a long time, but I’m turning into a believer. A key change has been the development of technological means of making the paywalls actually pretty porous, which […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-725","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-issues","7":"entry","8":"has-post-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-bH","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":610,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/paywalls-at-newspapers-and-museums\/","url_meta":{"origin":725,"position":0},"title":"Paywalls at Newspapers and Museums","author":"Michael Rushton","date":"April 5, 2013","format":false,"excerpt":"Felix Salmon investigates how newspaper paywalls are evolving: In the early days of paywalls, some content was free, while other content you needed to pay for; the meter, in theory, replaced that system with one where the determination as to whether an article was free or not was a function\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"is the meter running?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/newspaper-250x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1982,"url":"https:\/\/www.artsjournal.com\/worth\/2016\/02\/is-there-a-canadian-cultural-policy-crisis\/","url_meta":{"origin":725,"position":1},"title":"Is there a Canadian cultural policy crisis?","author":"Michael Rushton","date":"February 13, 2016","format":false,"excerpt":"At the Globe and Mail, Kate Taylor writes: The policy tools that have protected and nurtured Canada\u2019s cultural industries since the 1970s are unknown to transnational distributors of foreign content \u2013 that would be Google, YouTube and Netflix \u2013 while Canadian consumers are increasingly sidestepping the domestic distributors who, whether\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"a childhood favourite","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/02\/paddle-to-the-sea.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":883,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/06\/event-planning\/","url_meta":{"origin":725,"position":2},"title":"Event planning","author":"Michael Rushton","date":"June 19, 2013","format":false,"excerpt":"At the Freakonomics blog, thinking about how to generate revenues from creative goods when digital copies are so readily available: Products \u2013 especially digital ones \u2013 are often very easy to copy. But experiences can be highly copy-resistant.\u00a0 Just think of music: it\u2019s easy to pirate a song, but it\u2019s\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"Zombies!","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/06\/old-skool-3d-cinema-audience-300x187.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1207,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/04\/nonprofit-costs-are-driven-by-revenues\/","url_meta":{"origin":725,"position":3},"title":"Nonprofit costs are driven by revenues","author":"Michael Rushton","date":"April 8, 2014","format":false,"excerpt":"This post takes us through health care, college sports, and opera... One of the first things arts administration students are taught about nonprofit organizations is that by law, and by definition, nonprofits are not to distribute any net earnings to managers or shareholders, but rather any revenues over costs must\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"lots of rent to collect","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/04\/Saban.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1711,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/11\/no-promises\/","url_meta":{"origin":725,"position":4},"title":"No promises","author":"Michael Rushton","date":"November 26, 2014","format":false,"excerpt":"A few folks now have linked to the fascinating piece by Jack Conte of the band Pomplamoose (the high-school French student in me smiles) on an accounting of the costs and revenues, to the dollar, of mounting a month-long tour. Spoiler alert: even with good crowds, they lost money (just\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"just a singer in a rock and roll band","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/photo-35-224x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1694,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/11\/streaming-a-view-from-the-other-side\/","url_meta":{"origin":725,"position":5},"title":"Streaming – a view from the other side (updated)","author":"Michael Rushton","date":"November 9, 2014","format":false,"excerpt":"The New York Times has an 'Opinionator' series asking 'Is Streaming Good for Musicians?' It's a narrow question, since in any dispassionate analysis 'Is Streaming Good for People Who Listen to Music?' would also factor into the evaluation of this technology. That said, let me try to broaden the debate\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"looks nice to me","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/stream.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/stream.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/stream.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/stream.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/stream.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/stream.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=725"}],"version-history":[{"count":0,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/725\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}