The Big Paywall

Moneybox
A blog about business and economics.
Jan. 3 2013 10:16 AM

The Big Paywall

Andrew Sullivan's move to a paid subscription model for the Daily Dish has a lot of people wondering what the internet might look like if free content largely disappears.

I think the starting point for thinking about that is that it's highly unlikely that we'll ever see a world where there are hundreds of different English-language online news outlets that each have a low annual subscription fee. People often express annoyance at the excessive "bundling" of cable television. Even if MSNBC, Bravo, A&E, TLC, and the Food Network constitute 85% of your viewing you can't drop ESPN, CNN, TNT, and the rest and save yourself a lot of money. The cable company invests in building the infrastructure, invests in the carriage fees for the key must-carry channels, and then sells huge lumpy packages to people. People complain, but there's a deep logic to this business model and it means that you don't have a situation where people can watch the Travel Channel but can't watch USA. There's the no-cable minority and the yes-cable majority.

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Or to take another example, your traditional big city newspaper has many different sections. You can't drop the sports section if you don't care about sports and pay less money.

But the flipside of that bundling is you get a lot of content for your money. And if subscription models succeed, I'd expect them to evolve in the direction of big bundles. That might be because there are eight or nine giant content conglomerates selling subscriptions. Or it might be because of cross-marketing deals. Either way you'd get something that looks less like "the Internet" as we know it today and more like the adjacent series of walled gardens that CompuServe, Prodigy, AOL, etc. originally promoted as the vision of online existence. In fact ultimately it might be the telecommunications companies that you buy broadband from who become the orchestrators of the content bundles.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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