More and more data is being produced and consumed on the internet everyday as people become more mobile and more social. This data is paid for by the consumer to their provider whether it’s an ISP or their mobile carrier they pay for data download. Vast amounts of data we consume everyday comes from free sources whether its news sites, blogs, gaming or social networks and we ‘pay’ for this by having to see advertisements. But increasingly larger sites especially those in the business of news are creating ‘paywalls’ to access information and this has been successful for the major news and financial sites such as FT, WSJ and the New York Times. Others news organizations have also turned to paywalls but they have been met with some pushback.
Many see the internet as ‘free’ resource and many other see it as a ‘right’ to have access to information and data for free. However, the increasing issue is that for large sites advertising often doesn’t create enough revenue to cover the overhead costs and produce a profit for shareholders, so increasingly they are turning to paywalls. Many cite sites such as Facebook or Twitter that work on the advertising model and that works for sites with millions of hits per day and have a certain cachet or they can gain enough advertisers to meet the costs. However, numerous sites cannot sustain a large journalistic staff to produce quality news without creating a paywall or publishing huge quantities of gossip and tabloid level news to gain the visitors required.
The other issue is information overload and that many people now are visiting niche sites that pertain to certain interests such as design, sports, local area, etc. The news and information is becoming more fragmented, more localized and more refined as to the topic. However, many of these sites work off advertising and a store to keep themselves and a small staff employed.
Larger news sites and agencies have huge costs in employing staff and paying for data traffic. These sites we rely on will start to increase charging for the information they produce. The question is will you be willing to pay for access.