By Darren Gilbert

In 2010, the Times in the UK decided to try its luck and was met with mixed success. While it has recruited over 120 000 subscribers (in June, figures just topped 131 000), the jury is still out on whether or not the move was a success. The same can be said for The New York Times. The American daily newspaper has tried various paywall methods and as Frédéric Filloux wrote in The Guardian, figures for the first quarter of 2012 will show that even for a major brand like The New York Times, digital advertising is a struggle. However, that’s not to say its paywall isn’t working.

“With roughly half-a-million paying subscribers, the NYTimes.com has captured the equivalent of 39% of its weekday print circulation of 1.3 million,” writes Filloux. However, not every newspaper or publication is on the same level as The New York Times. That leads to a question: Are paywalls really a viable option for newspapers or are they an obstacle for those wanting to stay informed?

In answering that, a corresponding question needs to be posed: Should readers have to pay for content online? Depending on who you speak to, you’ll get a different reply. However, any answer should be subject to the quality of content. Techcentral’s deputy editor, Craig Wilson, who is on the side of paywalls, agrees, going so far as to question whether it’s in our best interests to assume that everything online should be free. “Free content carries no guarantee of quality whereas paid-for content implicitly does, and if that promise proves false, you can simply stop paying.”

“[T]he battle for eyes on pages or screens needs to be fought over content,” continues Wilson. “The publications with the best writers, editors and photographers deserve to be read, and they deserve to get paid. By paying for content, you get the benefit of reassurances. The publication, meanwhile, gets reminded that if it doesn’t keep up to stand, it’ll lose your attention and with it your monthly payment.”

However, GigaOM’s senior writer, Mathew Ingram doesn’t believe it’s that simple. Now, that is not to say that he believes paywalls or even subscriptions are necessarily wrong. He doesn’t think they are. However, he does believe they are more backward-thinking than forward-thinking. “Paywalls restrict the flow of content, and that’s bad. As a writer, the thing I am most interested in is reaching as many people as possible with my writing, regardless of whether they pay for it directly or not … I don’t think paywalls are the answer – and I think focusing on them too much can distract a newspaper from doing the other things that are necessary to survive."

Like Wilson, Peter Bruce, editor of Business Day sits on the opposite side of the fence, believing that going digital is the way forward. In fact, he says it’s a matter of survival. He announced earlier this month that it was to launch BDlive, a step which Chris Moerdyk labeled as courageous in a piece on The Media Online. It is indeed courageous. As Moerdyk points out, the significant of this announcement is that it comes from the engine room of the newspaper.

It’s also in an environment where everything still remains relatively new. Experimentation is key in finding the balance that will maintain revenue while keeping consumers of online news satisfied. It is this revenue generation that Moerdyk believes will be the biggest challenge facing Bruce and his team. “If you think that the shift from printed product to digital takes a lot of mental adaption, the move from selling newspaper advertising to digital revenue generation is massive in comparison.”

However, that doesn’t necessarily mean that paywalls are the future. The success that the Mail Online has achieved in the past year backs up Ingram’s questions about the necessity of paywalls. In a piece for The Guardian, Dan Sabbagh found that as of July this year, it had grown 69%, which would imply an outturn of £27m in 2012. Meanwhile, the digital advertising revenue of The Guardian, which also refuses to put up a paywall, was ahead 26% in the year by the end of March.

Ingram believes its simple. Paywalls don’t solve the problems that most newspapers are facing. “Everyone seems to have decided The New York Times paywall is a success.” However, as stated in Filloux’s piece, and reiterated by Ingram, it’s a paywall that is not making up for the continuing decline in print ad revenue. “What happens to medium-sized or regional newspapers that don’t … have the ability to produce as much unique content as the Times or the Wall Street Journal? The answer is they will most probably sink.

What are your thoughts? Are paywalls a viable option for newspapers or are they an obstacle in the way of staying informed?