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Readers, not journalists, determine value

June 11, 2010

Something I’ve been rolling around in my head: You don’t determine the value of your journalism, your readers do.

I’ve been thinking about how the paywall debate lacks a consensus over what constitutes value: Depending on who you listen to, we either need to charge for our work to make it valuable or we shouldn’t bother because technology has rendered it (monetarily) worthless. Really, though, I don’t know if either side can be right or wrong, given that the only variable that matters is How much does the audience value our work?

If a paywall can turn a profit, that’s awesome (besides at least one glaring problem), but you can’t just arbitrarily set rates and say Take it or leave it—that’s a strategy that’s almost certain to fail. Journalists, as seekers of hard numbers and facts, should know better and should take time to find out how much their customers value their product.

That’s not an easy thing to do, but I might start by looking at visitor loyalty, averaging that out month-to-month and determining how many “regulars” I had. Then I would average out per-month ad revenue (because ads are how free sites make their money) and divide it by the number of regular customers, essentially assigning a dollar amount to each person—that number would be (roughly) the amount I would have to charge to break even on a paywall (versus traditional advertising). Here’s what I’m thinking in traditional math format:

Average ad revenue per month / Average regular customers per month

=

Per-month paywall charge needed to break even

The hard part—the part that’s ultimately up to your readers—is determining whether that last number is “worth it,” though it’s pretty easy to figure what’s completely outrageous (hint: if your last number is anything greater than $3-$5, you’re probably better off sticking to a free model). That part will always involve some sort of risk, but if you’ve made good estimations and tinkered with the “equation” enough, you’ll at least be taking a calculated risk.

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