Charging for content online: Some remedial math

The conventional wisdom on whether and how newspapers ought to charge for their online content is changing so rapidly, some people are having trouble keeping up. One of those people is Washington Post media critic Howard Kurtz, who Monday repeated one of the favored fallacies of the information-must-be-free crowd: that publications that try to squeeze some cash out of readers, however delicately, risk losing their audiences.

Kurtz writes:

Unless the movement becomes a stampede, pay-wall sites may see traffic nosedive as the information-wants-to-be-free crowd heads for the exits. At that point, we will know whether enough people are willing to pay something, anything, for decent reporting.

Taking the handoff from Kurtz, Gawker's Ryan Tate predicts that Rupert Murdoch will reverse himself on charging for access:

Whichever publishers are first to charge for content will be first to see their Web traffic drop -- like 90 percent -- if they wall off everything to just subscribers. Especially if their competitors don't also erect their own paywalls. It could be catastrophic for smaller brands who wall off their content while everyone stays free.

Surely that's true, as far as it goes. But who's talking about walling everything off to just subscribers? Not Murdoch, as I've noted, and surely not Steve Brill and Gordon Crovitz, who say that publishers who sign up with their paid-content venture, Journalism Online, and adopt a "freemium" pricing strategy, can expect to hang onto 90 percent of their page views.

I'm not saying they're right, necessarily. Maybe just the thought of ever being asked to produce a credit card will scare readers so much that they'll stay away. That hasn't happened to The Wall Street Journal or the Financial Times, but who knows? Until it does, though, it seems like the naysayers, not the paid-content experimenters, are the ones living in a fantasy world.

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