August 14, 2011

A VC: On Porous Paywalls

Felix Salmon has a couple great posts on the New York Times' paywall. He notes that it has been successful and explains why. Felix says:
Yes, the NYT paywall is porous — but that’s a feature, not a bug. It allows anybody, anywhere, to read any NYT article they like. That makes the NYT open and inviting — and means that I continue to be very happy to link to NYT stories.
I've been a fan and a proponent of porous paywalls since studying the FT's model a few years back and was very pleased to see the NY Times go with the FT's model.

Monetizing digital content requires a different mindset than monetizing analog content. The marginal cost of another unit of digital content is nominal. Unlike printing and delivering a paper, serving up another page view doesn't cost the New York Times much. So while the New York Times must charge its customer to recieve the paper, it doesn't necessarily need to charge a customer for every page view, particularly since they do run ads on every page served.

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