• by Kaila Colbin , Featured Contributor, June 29, 2010

Let's face it: a fragmented paywall approach to content doesn't serve anyone. Our consumption habits are too dispersed and too immediate to justify paid subscriptions to individual providers. If I'm reading a blog and it links to a source article from a site I don't normally read, I don't want to have to bust out the credit card and pay three bucks to get a bit more info.  

Individual paywalls might benefit some big-name players briefly. After all, if you're in the finance industry, you pretty much have to read the Wall Street Journal or the Financial Times. But if you have to pay for each publication separately, you're pretty much going to stick with only the ones you consume consistently. You won't buy a subscription to the Miami Herald if you only read an article from that pub once a year.

Even the biggest players, the ones who do make it to the slim must-read list, will suffer. Generally, the argument for focusing on the most hard-core members of your base is that they're the ones who can best leverage your message to the wider masses. But in this case, the hit to the wallet will combine with near-infinite content competition to steadily whittle away at the potential market for individual news providers, until all you're left with is your most truly radical followers.

So is the solution free content? From the consumer perspective, sure, but not from the perspective of struggling news companies. The situation has gotten so bad that USA Today is reporting a 10% drop in year-on-year newspaper ad revenue as good news: "the smallest such drop since the recession began in late 2007." According to that same article, the newspaper industry is already surviving on just 46% of its revenues from four years ago. You want to be the one to tell them they have to keep giving it away for free?

No, free doesn't work and neither does paid. So what's the solution? Simple: Take the Apple approach.

Consider what iTunes did for the music industry. All of a sudden, we realized we were willing to pay for music. All we needed was an absurdly elegant interface and away we went, 99 cents at a time. Turns out it wasn't that we were miserly; it just hadn't been easy enough to pay.

So last week I found an article on PaidContent.org hinting that Google's Newspass might be ready for launch at the end of the year. Newspass is a paid content system for publishers: one portal, one search engine, one Google Checkout.

This could work, methinks, for the reasons I enumerated earlier. There's one major issue, though: Google's conflict of interest. Consider this comment left on the PaidContent article: "This is a terrible idea for Google and for its users... I would not use Google if I knew that any more than one of the top ten organic results was behind a pay wall... At the very least, the paid results should be segregated from the organic results, similar to the way AdWords ads are segregated now."

A valid point, but not insurmountable. After all, Google hasn't had that much pushback from its other content services. Google News search could switch to a 2-column layout, premium on the left and free on the right or vice versa. There are ways to handle this issue.

What we need, though, is a solution. The newspaper industry is not viable in its present incarnation, and to date its attempts to haul itself into the 21st century have been pitiful. If Google can't make it work as the iTunes of news, we'll need Steve Jobs to step in. Our future as an informed society depends on it.

What's your take? Leave me a comment here or find me via @kcolbin.