• Gigaom, Tuesday, June 7, 2011 4:30 PM

Gigaom's Mathew Ingram argues that the paywalls newspapers implement for online content still don't work. "The biggest flaw from a business perspective, particularly for smaller newspapers, is that walling up your content is an invitation to free competitors...to come and take away your readers," he writes.

For larger papers like the New York Times, the revenue generated will probably be equal to the ad dollars lost from a reduction of page views, Ingram notes. So with zero-sum accounting, "in most cases, these walls are likely to be driven by the same rationale that Rupert Murdoch used in launching paywalls at two of his British newspapers: namely, to keep print readers from deserting the paper product in favor of reading online, something that would remove a paper's main source of ad revenue," he concludes.

Read the whole story at Gigaom »