Economic implications

In the aftermath of the Boston bombings the Boston Globe dropped its paywall to allow the world access to their information.

The Globe’s publisher, Christopher M. Mayer, noted that this was done “as a service to the community” and that the change was only temporary. The wall went back up on April 22.

Journalism strives to serve the public by providing pertinent and accurate information, whereas a good businessman might ask: Why drop the wall when demand for quality information is so high?

Free (as in beer)

In “A New Horizon for News” Michael Massing investigates the beginning of of free, online content from news organizations. He finds that the hacker mentality of free information and open source materials led to free content.

Since the late 1990s, when the first news sites were introduced on the Internet, most papers have offered untrammeled access to them. Information wants to be free,’ the digirati proclaimed, and publishers dutifully went along.

Costs of goods sold

While information may want to be free, it is certainly not free to produce.

Carl Shapiro and Hal R. Varian explore this issue in the first chapter of “Information Rules: A strategic guide to the networked economy.”

Information is costly to produce but cheap to reproduce… Economists say that production of an information good involves high fixed costs but low marginal costs. The cost of producing the first copy of an information good may be substantial, but the cost of producing (or reproducing) additional copies is negligible.

In an analysis of the Globe’s paywall, the Columbia Journalism Review echoed Shapiro and Varian.

The Boston Globe dropped its paywall last week as a public service during the aftermath of the terror attacks and the manhunt for the bombers.

But the kind of journalism the paper has put out during the last week is expensive and it can’t be supported by digital ads alone. So today, the paywall is back up.

In a breaking news event like the Boston bombings, where (mis)information is everywhere, demand for (reliable) information is high and costs are expensive, does the public service of lowering the wall outweigh the financial benefits of increased online subscriptions?

The Nation’s John Nichols discussed this in his piece called, “What ‘The Boston Globe‘ Got Right and Why It Should Change How Papers Think“.

The readers came. On the day the paywall came down, the paper attracted 1.2 million unique visitors—six times the normal amount. Of course, dramatic events drew readers; of course, many of the new readers were from outside the Boston area. But the numbers were way, way higher—locally, nationally and even internationally—because readers did not have to jump through digital hoops and type in credit card numbers.

So dropping the paywall made sense from a standpoint of civic responsibility and from the classic journalistic standpoint of wanting to get new information and ideas to the broadest possible audience.

But it was not viewed as as economic success for the Globe.

And more importantly, in the era of the networked public sphere, does it even matter that the paywalls fell? The Globe was tweeting important information, as were a number of other organizations and individuals.

Not all of that information may have been accurate but it certainly fed the appetite of news-goers looking for up-to-the-minute information.

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