A farewell to free journalism

Bloomberg, my former employer, is reportedly moving to a paywall. If that turns out to be true, I can’t say I’ll be surprised. Sooner or later, virtually everyone in the industry is going to put his or her content behind a subscription wall. And in general, you should bet on “sooner” rather than “later.” Last week, Vanity Fair became just the latest in a long line of publications to say “If you want to read us, you’ll have to subscribe.”

So how did my industry make it work for so long? The answer is that we never did, really, which is why so many newspapers and magazines are struggling to stay afloat, and so many Web publications are burning through piles of investor money as they hunt for a viable business model. The more interesting question is why we couldn’t make it work. And the answer to that lies in the structure of the traditional media business.

For more than a century, magazines and newspapers were what’s known as a “two-sided market”: We sold subscriptions to you, our readers, and once you’d subscribed, we sold your eyeballs to our advertisers. But that was okay, because we controlled a valuable pipeline to reader eyeballs — a pipeline advertisers wanted to fill with information about their products. You guys got your journalism on the cheap, and advertisers got the opportunity to tell you about the fantastic incentive package available to qualified buyers on the brand-new 1985 Chevy Impala.

Then the Internet came along, and suddenly, we didn’t own the only pipeline anymore. Anyone can throw up a Web page. And over the past 20 years, anyone did — far more than could support actual advertiser demand. The companies that are winning — mostly Google and Facebook — get content for free from their users, or other people on the Internet. Including us.

Providing the rope with which someone else will hang you is obviously not a very good business model. And in the words of economist Herb Stein, “If something can’t go on forever, it will stop.” Either we will find someone else to pay for the news and opinion and cartoons you consume, or we will go out of business.

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Further reading:

The Atlantic: Prepare for the new paywall era

The Information: Bloomberg Plans to Launch a Paywall

Press Gazette: Vanity Fair goes behind paywall as editor says subscriptions enable it to invest in reporting