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Pay walls for news will produce ‘more corpses than successes’, says report

January 12th, 2010Posted by in Online Journalism

With pay walls (or the discussion of) popping up right, left and centre in newsrooms at the moment, a new report from business and technology analysis firm Ovum won’t allay the fears of many media executives.

“Paywall experiments by traditional media in 2010 are virtually guaranteed to produce more corpses than successes,” it states in the opening line.

If the trend towards pay walls persists, there will be separation of “wheat from the chaff” when it comes to “premium” content, suggests the report:

The lessons from the web are simple; if content is not highly differentiated, or information premium and tradable, search technologies such as Google exist to provide an access channel to a zero cost source of identical or comparable content. The pay wall will act as a market-driven audit tool for what content is and is not premium and 2010 will see news and media organisations reassess their view of the online value of their content portfolios.

But online video and catch-up TV services have a greater opportunity to demand a pay-per-view premium, the report adds.

More happily for Ovum’s industry, the firm forecasts that paid content models will be a boost to service and technology vendors looking to create new platforms/payment systems and technologies rather than the media companies implementing them.

Ovum’s report suggests that Apple’s forthcoming Tablet technology could marry together the publishers hopes for paid content and the capabilities of the technology vendors:

Apple has demonstrated for the music industry that the combination of strong media retail platform with a consistent user experience across multiple, integrated devices can draw consumers away from free, but less elegant consumption models.

The news industry will be hoping that Apple can deliver a similar experience in 2010. If it fails to deliver, radical restructuring of the news media supply chain will be needed.

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