The New York Times knows it: Content paywalls work if your content is interesting enough.
News Corp.'s (Nasdaq: NWSA) Fox Broadcasting has the right idea in deciding to create a paywall for TV content that it previously had made available for free online just after its first airing. It is an idea that is showing positive results for the Times, as well as other newspapers and magazines. Fox probably did not necessarily get this idea from the Times, but rather has been waiting for the right time to pursue it.
The factors that make it the right time: A crowded online TV market, some evidence of pay TV cord-cutting, uncertainty over the future of free online TV juggernaut Hulu, and perhaps a realization--or a reminder--that the content companies hold all the best cards in this market's poker game.
The funny thing--or maybe not so funny--is that the cable TV operators have been trying to circumvent the free online TV movement for a while through TV Everywhere strategies. Those strategies have been urged on by cable TV programmers afraid that the free content movement would hit their sector like a wrecking ball and change everything.
TV Everywhere planners have tried to disguise what the technology really is--a form of paywall--perhaps because describing it as a paywall would have proved unpopular.
Now, a traditional broadcast giant is coming right out and saying it: Internet TV shall not be free. Meanwhile, TV Everywhere still isn't where the industry hoped it would be. --Dan