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By Dilip Bobb

To paraphrase the immortal William Shakespeare: to pay or not to pay, that is the question. The media in India has been struggling with that question for some time now, on deciding whether to introduce Paywalls for access to their content. It’s a tightrope walk but some Indian media outlets have taken the first hesitant steps in that direction. The Hindu, Business Line and Business Standard have introduced paywalls while News Laundry has opted for a soft paywall, in that some content is free but the more popular features are now available for a subscription. The rest of the media is watching closely at what is seen as an experiment. It is too early to tell but there is one great wall they have to cross before they take the plunge—the belief that Indians do not like to pay for news. That too in a country where newspapers are priced ridiculously low and most TV news channels are free to air.

The Hindu, in its editorial on launching the Paywall, wrote thus: “Advertising revenue is declining faster than subscription revenue… The glimmer of hope lies in persuading more people that it’s worth paying for a free press.” Media outlets in the US, UK and Europe introduced Paywalls a few years ago, but the jury is still out on whether it is an effective sales strategy. A new study by Harvard Business School looks at the four primary revenue components of traditional media companies—prints subscription, print advertising, digital subscription, and digital advertising—found that for companies with high circulations and large amounts of exclusive content, paywalls can increase overall sales, often by increasing demand for print subscriptions. Newspapers with less exclusive content, however, have generally experienced losses when they started charging readers to access digital editions. Indeed, like in India, as traditional revenue sources continue to decline and a major share of advertising revenue is claimed by tech giants, more publishers in Europe and the United States are turning to the subscription model, according to new research. However, while a few prominent outliers like The New York Times and Financial Times have been successful at making paywalls work, many newspapers are already reconsidering the practice. In the media industry, the option is been influenced by some observations about paywalls and the reasons for their decline:

  • Paywalls hurt audience development.The tradeoff between loss of readership (users who don’t pay subscriptions) and gain in revenue (users who pay subscriptions) for newspapers implementing a hard paywall is trending towards negative. With content so widely available, many potential subscribers turn to other sources of news. Several readership studies in the U.S., Canada and U.K. conclude that as many as 90 percent of readers would rather look for other sources of news than pay for a subscription as their ‘first choice’ outlet.
  • Newspapers implementing soft paywalls don’t fare much better either. Readers typically leave the site once they’ve consumed their allotted amount of contentment before they encounter a paywall.
  • There’s always a reason for ‘not now.’In times of public emergencies, most newspapers adopt the view that the need to provide a public service outweighs the ‘pay for quality journalism’ principle. Promotion or partner advertising also drives newspapers to temporarily suspend paywalls to gain access to a larger audience.

In India, the resistance to paying for news is a major factor, considering there are multiple sources to access news and many of them free. Only committed readers of papers like the Hindu will pay for access. The key here is digital platforms which are gaining rapidly in viewership and provide exclusive content in the form of podcasts and videos. News Laundry’s soft paywall is still a work in progress, but the growing digital news portals will be keeping a beady eye on how it pans out.

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