Barry Diller: Paywalls Will Work Eventually

Barry Diller told Bloomberg TV's Betty Liu that he believes people will pay for media content in the future, and that paywalls will work eventually.

"[Free content] will end because now so many people are used to paying for applications, whether they pay 99 cents or whether they pay for a tune, or they pay 99 cents to play Solitaire, or $4.95 to do this or $2.95 to do that, or one kind of one stop, very simple to do," Diller said. "That in these little form factors, first with the iPhone and now the iPad and dozens of other devices that will come, this is naturally going to evolve. It's got this legacy of this mythology. But it will end."

Diller said that the New York Times paywall will probably fail at first, but will ultimately succeed.

"I think [the New York Times will] succeed eventually, not this time around," he said. "This is going to be an evolution. It's going to take years for the pricing to get in line, for the form factors to get in line, for consumer habits to develop, for one click, one ease path of pricing, one completion of the order to happen. All this stuff is going to jumble around awkwardly for the next years."

Diller compared the evolution of the media business revenue model online to the music industry.

"Everyone said, no one will pay for music. It took seven or eight years for the iTunes concept...and now it's a multibillion business," he said. "People are paying for music, they could get it free, but they're paying for it....these are industries so to speak that are going to push to say our content is, we think it's valuable at this. Steve Jobs did this in music. He said music is for 99 cents and he changed everything. Because he said I'm going to price it so low, that everyone is going to adopt it. So the same will happen."

WATCH:

Comments

[bhopal-carbide]

04:11 PM on 06/22/2010

I prefer to purchase fiction at the used book store.

[marykittneel]

09:06 AM on 06/22/2010

When these people to say things like, "People pay for songs on iTunes, so they'll learn to pay for news content" they're making a false analogy. News is over with fast, whereas that song you bought is pretty much part of your life forever. Actual news and entertainment serve two different purposes, and as long as there's a free press (knock wood) information will get to the people who want it and seek it out. Maybe I'm being idealistic, but if the mainstream press barricades itself behind a paywall, they'll become nothing but a self-serving entity with no real influence.

[middleoftheroad]

12:40 PM on 06/22/2010

EXACTLY! plus I can read about a news event on one of 50 sites.

[Puck342]

06:51 PM on 06/21/2010

iTunes worked because .99 cents a song was radically less than what you would pay for a 9 song, $17.99 CD.

Taking a paper that one can read for free online and trying to price it...when most people simply read online news en masse and don't really go looking for much....

ridiculous. What would they charge? .15 an article? I wouldn't even pay that. I'd just wait for like an hour or two until whatever grassroots torrenting site starts posting daily dumps of various news outlets.

Nice try NYT. Don't you wish you had based your financial model on subscriptions not advertising now? Of course you don't, greed never learns.

[alpinefresh]

06:17 PM on 06/21/2010

No...no, it will fail and then fail some more. End of story.

[Factonfact]

05:48 PM on 06/21/2010

Baloney.

The Times apparently still thinks of itself as one of several papers on the newsstand and acts accordingly.

But -- show me the newstand on the Internet.

Ain't one, is there?

I suspect the folks that will be hurt most are the pundits on CNN who get whatever information they convey from the front page of The Times -- and now CNN will have to (gasp!) pay a little for it.

[Boomshadow]

03:57 PM on 06/21/2010

Paywalls may work for certain types of branded content. For instance, Rupert Murdoch's News Corporation may get people to pay for the Wall Street Journal, but putting, say, Fox News or MySpace behind a paywall would kill them faster than oil kills wildlife. Also, I suspect that he has a short memory, or he would remember that the New York Times has already tried and failed a pay-based online solution. Bottom line: most Internet users don't want to be nickeled and dimed to death at their desktops or on their phones. They will find free content to replace their paid content for all but a very few things.

[ReesieKitty]

03:56 PM on 06/21/2010

It will succeed for a short while until older people die off and the younger generation will have moved onto a completely different and new way to process media. Sure, guys like Diller will pay for content - but the rest of us will be getting our news and information somewhere else.

[patman77]

03:53 PM on 06/21/2010

is he phyllis dillers twin bro. ?

[LightShadow62]

01:05 PM on 06/21/2010

It will fail until it succeeds.

This guy is just brilliant. :-I

[WhiteHat]

12:59 PM on 06/21/2010

News Flash! It's 2010! Rather than trying to put the Internet genie back in the bottle, the only rational move for ANY industry in any era is to acknowledge current market realities and adapt accordingly.

In today's market, a paid fee for news cannot work as long as there are ANY publishers willing and able to post news of equivalent value for free. Are any willing and able? Certainly. Low-overhead sites can operate quite comfortably on Internet ad revenue. And it's not difficult to have the same access to sources as the big boys. See Politico, for example.

The pivotal issue for any news organization is the perceived value of the product. The perceived value of news is inseparable from the trust of readers.

Trust is earned. The MSM could start building trust by refusing to accomodate liars. "He-said/she-said reporting" may appear safest in a politically polarized country, but it damages the reputation of the publisher. Call out every liar with facts, figures and honest analysis. Demand proofs. Play hardball. Withhold coverage of falsehoods.

Push back on every accusation of "liberal media bias." Publishing that particular lie without rebuttal is an act of self-immolation.

Require strictly fact-based writing (AKA "honesty") even from their own "opinion" writers.

If the MSM's product were clearly more valuable than that of "upstart" competitors, they would have something on which to base a premium revenue stream. Until then they're just. another. website. Wanna be Tiffany's? Don't sell crap.

[Mike Clark II]

12:40 PM on 06/21/2010

i didnt pay. most of my games came from boxes at UPS, and so did my ipod. the news is supposed to be free. what is he saying "oh, a tornado warning is in your general area, if you want to know if you will or will not die in the next 30 minutes, pay 4 bucks?" i was taught that news was free, not something you PAY FOR

[WhiteHat]

01:29 PM on 06/21/2010

News happens freely, of course, but acquiring, organizing and publishing news is not free and never has been.

[Boomshadow]

03:59 PM on 06/21/2010

Yes, but when it comes to TV network news, the accepted model has always been that advertisers subsidize the content and you, the viewer, buy the hardware and the connection.

[Allen Bouchard]

11:18 AM on 06/21/2010

Diller is neglecting one difference between people paying for music or games online and the new NYT paywall. Yes, people can obtain music for free online, but unless it's a stream that they have no control over (like Pandora), it is not a legitimate way to obtain the songs they want.

When it comes to paying for the news, there are already plenty of succesful sites that are free and making money through advertisements. If NYT wants to have a monthly or annual subscription, they should start with a site that can draw users (i.e. good quality stories and features; high ratio of NYT content to AP rehash) and make money off of ads and then offer a paid-for ad-free option. If they force people to pay then they'll hemmorhage customers to other sites.

[ReesieKitty]

03:58 PM on 06/21/2010

Faved! It seems like every person I see advocating pay-for news content is some rich old white guy, lol. Seriously, he and his friends will pay for it, but the rest of us don't need to and won't if we can get it from any other source. Eventually there will be small sources of 'news' for the wealthy, like the NYT, and other sources for everyone else.

[alanposting]

07:18 AM on 06/21/2010

I don't believe for one minute Diller believes we will pay for the news...he has some vested money interest in saying that, for sure. All of the examples he gave that we are willing to pay for he missed one important point....and that is they all have monopoles on what they are charging for....not for some tired blabby writers....and news you can get from a thousand sources....

[Cowboylove]

01:11 AM on 06/21/2010

The New York Times is charging way too much for internet access and it will fail because of it. People would be willing to pay $9.95 for yearly access, a few less would be willing to pay $19.95 for annual access but not the full subscription price. You do not have printing costs or delivery costs to recover so why charge as if you do?

[zest]

11:15 AM on 06/21/2010

Profit.

[easyPR]

12:26 AM on 06/21/2010

It is a very heated debate. Will Murdoch's new plan work? Can the NYT follow it. I believe the most important issue lies with whether or not the papers can maintain some integrity. The NYT has certainly run upon into some trouble on this front with its integrity ranking falling as cited by The Committee for Media and Newspaper Integrity.
http://newspaperintegrity.com/paper.php?id=4

[zest]

11:16 AM on 06/21/2010

Anyone who would pay for Murdoch's spin is a fool.