The era of pay-per-view internet

Media that were once free or easily accessible – including news websites, podcasts, TV shows and games – have rushed to hide behind payment walls during the pandemic.

Why is this important: This accelerating trend is shaping the Internet into many niche audiences, balkanizing our collective media regimes.

  • Just as cable introduced a pay layer to television in the 1980s, the pay layer of the Internet is taking shape 40 years later.

Driving the news: New data from Piano, a publisher subscription company, shows that pay walls for news publishers took off in 202o and have seen steady gains since.

  • According to Piano SVP Michael Silberman, the rate at which users saw a paid offer or were asked to pay for content on a news website doubled during COVID.
  • The numbers of published subscriptions confirm this trend. For the first time last year, newspapers made more money from subscriptions than from advertising, according to the Pew Research Center.

The big picture: Users run into pay walls across a range of media, finding they now have to pay for content that was once free.

  • In addition to news sites, readers also have to pay to read individual writers who leave established news organizations for independent writing platforms like Substack, Ghost, and Twitter’s Revue.
  • A cable subscription will no longer give you access to most of your favorite shows – you’ll have to shell out for a handful of different streaming services.
    • Since March 2020, the number of consumers who have said they are willing to pay for five or more streaming services has increased from 9% to 16%, according to data from Magid’s latest video entertainment study. Fewer people said they were willing to spend money on just one service.

Even podcasts, traditionally the most open and freely available medium through RSS feeds, are moving behind paid walls.

  • Apple and Spotify both added subscription podcast functionality this year, competing with Wondery, recently purchased by Amazon, and Luminary.
  • Spotify has spent hundreds of millions of dollars to pay for the exclusive rights to a number of podcasts, including “Call Her Daddy” by Alex Cooper, “Armchair Expert” by Dax Shepard and “The Joe Rogan Experience”.

Cloud play, the OnlyFans adult entertainment platform, even in-car features like heated seats – all based on a subscription model.

Be smart: There is no clear consensus among experts as to whether this fragmentation is a distinct good or bad for society.

  • “In some cases it makes some content less accessible, but I think there is still a huge amount of free content that is accessible. Is society therefore negatively affected by this? I think the resounding answer is no, ”said Jessica Lessin, CEO and founder of The Information, a premium subscription-based news service.
  • “Without subscription models, huge amounts of important public information simply would not be produced.”

Others support polarization will accelerate as like-minded consumers pay to read their favorite writers and it will be harder for content to escape this ecosystem.

  • “It is clear that the quality mainstream media – whose audiences are quite liberal – are increasingly turning to pay walls, especially at the national level,” said Rodney Benson, chairman of the media department, NYU culture and communication.

Yes, but: Anything that’s free is still hugely popular online. Many paid products offer free portions. And online advertising, which supports free services, shows no sign of stopping its growth.

The bottom line: The creation of the paid layer of the internet may never crowd out free alternatives, but it threatens to leave society with even fewer shared benchmarks.

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