Paywalls: yet another symptom of a dying newspaper industry or the future of publishing?

Felix Salmon:

What’s impossible to calculate, of course, is the long-term opportunity cost of driving away people who want to read your content but aren’t willing to pay. MediaPass’s Mitchell told me that in most cases, the act of putting up a paywall is the act of “essentially harvesting revenue from a loyal long-term audience” — people who have been reading the publication for years, and have turned it into a habit they don’t want to give up. That’s fine, as a short-term means of maximizing revenues. But it’s dangerous in terms of getting new loyal readers. Which is one reason why online media startups almost never have paywalls: they want as many people as possible to discover them. My expectation, then, is that newspaper paywalls will become both increasingly sophisticated and increasingly expensive over time — but that paywalls are not going to migrate very quickly out of the newspaper world and onto the rest of the internet. In a dying industry, the sensible thing to do is to maximize your revenues before you die. Paywalls might well make money for newspapers. But that doesn’t mean that newspapers aren’t dying. Quite the opposite.

I don’t know if Andrew Sullivan or Paul Carr would agree that paywalls are a last resort – both The Dish (which has a “leaky” paywall) and NSFWCORP (which requires a subscription to see any content) seem to be doing just fine with small staffs, small subscription fees, and relatively small audiences. I guess it’s just a matter of outlook: the big newspapers are trying to be as big as possible, while Sullivan and Carr represent the movement to build sustainable and profitable small enterprises.

Politico hits 1,000 subscribers for ridiculously expensive Pro service

Politico hits 1,000 Pro subscriptions and plans to launch a magazine — paidContent:

Politico launched Politico Pro in February 2011; while it was originally aimed at individual subscribers, Pro quickly switched its focus to the group subscriptions that now make up the vast majority of its base. Pro offers some subscriber-only articles, early access to morning newsletters, customizable instant alerts and other perks. Pro started out covering energy, health care and technology and added more coverage areas — defense, financial services, tax and transportation — last year. Starting this month, Pro subscribers can also receive an afternoon policy newsletter called Pro Report.

In an attempt to drive more Pro subscriptions, Politico is launching a free quarterly print magazine that will feature past Pro coverage. On March 22, it will be delivered to “every member of Congress, the White House and all federal agencies as well as to 160 newspaper boxes and 100 Washington-area Starbucks.”

Politico is tight-lipped on what a subscription to Pro actually costs. Subscription fees vary based on the type of organization (government, nonprofit and so on) and how many employees it has, as well as the number of coverage areas an organization wants. Nieman Journalism Lab reported last year that an individual subscription starts at $3,295 a year, with group memberships starting at $8,000 for five people and one coverage area.

I cannot believe that people are willing to spend that much for the features they mention. That makes a digital subscription to The New York Times look like pocket change.