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Originally Posted by basschick
one problem with a "paywall" is that it will substantially lower the number of readers, and that's not going to please the advertisers. after all, who wants to pay the same to advertise on a website that has 1/10th or less of its original readers?
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Paywalls typically lock off around 50-60% of content. Still plenty to pull in readers.
Also, think of it this way. You can make 2¢ per unique visitor per day, from online ads alone; or you can make 6¢ from ad revenue plus subscription fee. E.g. the WSJ would need to quadruple its readership to make up for the loss of subscription fees -- a difficult proposition at best. Further, it's possible (though not guaranteed) that the remaining readers have a more attractive demographic profile.
I.e. it's worth taking the hit to your audience if you can make a significantly higher amount of revenue per reader.
Next, online ads pay so poorly that losing 50% of online readers does not mean losing 50% of total revenues. To wit:
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Originally Posted by Washington Post
At current online ad rates, "You need 4 billion page views per month in order to make $50 million in revenue per year," Rob Grimshaw, managing director of FT.com, said in an interview Wednesday.
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more info here, relating to NY Times putting up a paywall soon)
Granted we are all accustomed to free news online; I'm not going to be terribly happy when the NYT goes paywall. But ultimately, if you want better quality content, someone has to pay for it. In the US it won't be the government, and online ads just aren't a sufficient source of revenues.