Variety, that institution of showbusiness news that arrives at Hollywood executive desks each morning, quietly began rolling out a new pay wall for their website this week. Variety.com will ask one in ten randomly selected users for a log-in and plans to have access shut off completely by early next year except for paying subscribers.
With all the noise News Corp mogul Rupert Murdoch has been making about pay walls I was surprised to see the media giving so little attention to this Variety story. By blocking free access to its content Variety joins the Wall Street Journal as the only other major publication on the frontier of this pay-for-paper/protect-the-website model. Whether or not this can save journalism the way that veteran ink-slingers hope is up for debate, but there are important implications in this decision for the larger media world. Here’s why it’s a great idea for Variety:
Variety has a relatively small highly defined niche readership of people working in the entertainment industry. Like the Wall Street Journal many of these subscriptions are addressed to offices and paid for by corporate budgets. You won’t see too many film execs batting an eyelash at the cost of their Variety subscription, or at the pay-wall, as long as it’s covered by their employer (and the web designers make the pay-wall gates convenient for print subscribers to pass through, a consideration which proponents of this model can’t afford to overlook). Variety subscribers will have the choice of seeing their news in print with their morning paper, or online, a choice that most people enjoy. The presence of the print edition feeds our 20th century bias that things on paper are more serious than things that exist only in pixels, even if we choose to read the news on a screen.
Sure they’ll lose lots and lots of eyeballs, which might mean some diminishing of ad rates for the website, but is anyone (other than Google) really making much on website ad sales? So the number of unique views goes down, but investment of the readers will begin to creep back up.
Which brings me to the three part Culture Wharf theory of why pay-protected online access combined with print edition could become a sustainable model for the future of publishing: Nichification, Identity, and Investment.
Nichification is the trend that media has been going through since, well, the very beginning. It has accelerated recently and nowhere is it more prominent today than in the cable TV market where every subgroup or interested has its own channel. Magazine publishing was the first to go through nichification as mass market general interest magazines like Time and Life gave rise to many smaller publications. Micro interests were able to spawn their own magazines with only a few thousand subscribers and still come out profitable (provided they were owned by a larger magazine publishing company with distribution resources).
The point about nichification is that it is a rule of media consumption that people will seek out the media that gives them the most direct and focused set of their interests available. This is already sort of happening with Google Reader, essentially you’re able to build your own “My Exact Personal Interests” set of articles from the available publications all over the internet. Google has the nichification thing figured out by allowing people to take what they want from the cafeteria of everything.
But it’s a legitimate question whether most consumers of media really want to be that active. Publications could step in by nichifying well to markets and providing quality content that is relevant to them without all the effort of tracking it down yourself. Nichification works well in a specific subset of information like the world of entertainment business and production like Variety. This information is already highly nichified, and since it isn’t widely available elsewhere, Variety may be able to survive and thrive by forcing those who want this highly nichified and arguably valuable information to pay for it.
Identity follows logically from Nichification. Obviously being a New York Times reader means something to a lot of people, a certain east-coast-liberal-intellectual brand that has a lot of identity value for a lot of people. Variety too has a strong brand and associated identity, that of someone working in the entertainment industry. The strong brands of these publications are forged and strengthened by nichification in the marketplace, but to the individual they represent something more. Something personal and psychological that affects one’s self-concept. That’s been a part of publishing from the very beginning, and there’s something much stronger about that brand-identity connection when you attach it to a physical paper. For one it’s more public – it appears on your desk every morning for everyone to see, someone has to deliver it to you, and you willingly pay the bill every year that connects you to the publication.
Which segues nicely into my last point: investment.
People value things more highly that they have to pay for. By choosing to subscribe you are investing in a publication, investing in their editorial staff, investing in the niche and identity described above, and investing what you believe to be a fair price in the information they have to offer. Now this concept might seem quaint in an age where the price of information has plummetted, but I don’t think it’s all together gone. Investment still plays a huge role in decision making and attachment, and it’s a human psychological quirk that Variety is depending on for keeping it’s subscriber base.
More importantly what Variety is really doing is setting a price for information, something nobody has really been able to effectively do in the (free) information age. Whether it works or not will depend on whether subscribers deem the value of the information to be commensurate with the price.
It may well not work out for Variety if the marketplace isn’t ready and they are undercut by cheaper, free-er competitors, but in the end if real news room reporting is going to survive, and not just it’s impoverished forms of social networking and blogging, someone has got to set a price for information that people are willing to pay. Variety has taken a major first step toward doing that, and aided by the patterns of Nichification, Identity, and Investment, they also may well succeed.