It caused a stir when NBR 24/7 put around 20% of its content behind a paywall on July 17.

And paid-content sites, as a species, keep getting it in the neck.

In a much-forwarded essay published in Vanity Fair, Michael Wolff lampooned Rupert Murdoch for daring to dream that people will pay for online news.

In terms of general content, my personal opinion is that Mr Wolff is probably right.

But the columnist also pointed out that people are willing to pay for information they think could help them make money. In this he’s correct. It's certainly true that the dominant business paper in each country (The Wall Street Journal in the US, the FT in the UK and the AFR in Australia) has long-ago erected a paywall, with varying degrees of success.

As a point of reference, most commentators peg AFR.com.au's number of subscribers at around 5000, after more than three years behind a paywall (its publisher, Fairfax, has not released an official number). The Wall Street Journal has more than one million paid subscribers.

I would also add that people are willing to pay for information they think will save them money - which is why Consumer.org.nz, with its tens of thousands of subscribers paying to access its website (many with hybrid print/online subs), is one of the quiet success stories in New Zealand online publishing.

Anyhow, what you all want to know is: has it worked?

How many paid subscribers have been signed up to NBR 24/7 since P-Day?

NBR publisher Barry Colman answers that question in a reply to a post by entrepreneur, consultant, media commentator (and, yes – whisper it – blogger) Lance Wiggs. I’ve included it below.

A number of bloggers reacted with venom to NBR’s paywall, confirming the stereotype essayed in a certain press release (as one blogger points out below, some of the anger was directed against the tone of the announcement rather than the concept of paid content itself ... ).

But a number, including Lance, had a more thoughtful response, which our publisher is quite happy to engage with - and in quite candid fashion, admitting mistakes were made.

That’s not to say there’s a general consensus with Mr Wiggs’ conclusions.

NBR agrees with Scoop’s Alistair Thompson that Nielsen’s time-spent metric has too many technical limitations to be used as a headline benchmark at this point (read Alistair’s comments after Lance's NBR post here).

And while Lance sees NBR’s number of unique browsers as cratering, the publication sees it as a modest drop.

There are only two stories in publishing: you’ve either got the biggest audience, or the best audience.

In print, NBR has always claimed the latter. And it’s no different online. NBR’s online audience will never come within spitting distance of the big general interest media website (though it is nevertheless the fourth most-read newspaper or magazine site, just quietly).

But it is now that rarest of beasts for an online advertiser: a qualified audience.

I'm also surprised at the number of right-on people who offer knee-jerk criticism of the paywall as a kind corporate take over of the free-for-all internet. 

After all, depending on subscribers' money for revenue means we have to write harder stories. No one's going to pay to read tosh. 

Such non-advertiser sources of revenue are a good thing across all media. Just ask anyone who prefers The Sopranos or The Wire or any other HBO fare over the garbage often turned out by its free-to-air broadcasters.

Lastly, while most newspapers have reacted to the brutal economics of the web by thinning editorial staff, NBR has actually added bodies – an acknowledgement that the web actually takes more feeding than print, not less. If a paywall helps fund that editorial resource, then again that's a good thing.

Anyhow, enough of me. Below is our publisher's open letter to Lance (read Lance’s latest post here). I'm sure Mr Wiggs will still be hounding us for more detail about yields and other details, but there's a lot of unvarnished information below, so have a read:

Dear Lance

It’s always fascinating reading performance, or non-performance, analysis by commentators on your own business. I thought your summary was a pretty balanced one considering the difficulty of trying to assess from the outside what’s really going on at nbr.co.nz when those of us on the inside have been forced to adopt at times the modus operandi of “fire, ready, aim” as per Tom Peters’ classic “In Search of Excellence.”

You were generous in describing our launch as half-assed. After making absolutely certain everything would work absolutely flawlessly and stalling and delaying and worrying for as long as possible, we took a deep breath and launched the paywall last July.

Man plans – the gods laugh. What a cockup. What was a simple procedure for those living in cyberspace when it came to paying up to view was a nightmare for many of the senior business executives who rushed to subscribe.

We were flooded with complaints as confused and exasperated businesspeople tried to log on. So much for flawlessness. I don’t know how many people must have given up in frustration. It turned out the flawless plan had not taken into account that the thousands of our existing email subscribers had to “re-join” the service to get behind the paywall.

How come this little problem escaped our attention? Because the cyberspace boys thought this issue was self evident and obvious. Yeah right.

You get this in the big jobs. I remember the launch of the first issue of Property Press in 1978. We thought we knew how to produce the black and white bromides for the hundreds of photos of the homes for sale. As it turned out we produced black and black. It was so awful that when the first bundle arrived at the launch function I turned off all the lights. With just the glow of the EXIT lights shining, the paper looked magnificent and everyone toasted its success.

I found then, and still do today, that business people are invariably very forgiving when they are supporting a new enterprise. I think they see themselves suffering similar turmoil when starting something new. They seem to know all about Murphy’s Law.

But your review was kind enough to report that we have settled into a modus operandi, “their site design is crisp and easy to use, their reporters are excellent and they are covering great stories.”

The biggest fear for the site was that our traffic would tank and people would turn to the free sites. This was certainly one of the things that kept me awake at 3am.

It didn’t happen. There has been a reduction but by our own measure of uniques we’ve held on to 77% of them. And, more importantly, the quality of current readers constitutes a group of highly paid, highly educated business people. Exactly the sort of audience NBR editorial has traditionally called its own. And our advertisers will pay to reach.

The second biggest fear, advertising volumes would fall if impressions fell back. It didn’t happen either. Since the launch the advertising booking volume has risen by 21% post paywall.

It’s important to note, however, that the volume of web advertising is feeble compared to NBR print. It was failure of sites everywhere to achieve decent advertising revenue that convinced us that web readers would have to pay to finance a real newsroom service.

The final and worst fear was that no one would pay. No one ever pays for website news. Everybody knew that.

And NBR’s content would not be good enough. We weren’t the Wall Street Journal the commentators kept reminding us. They were right about that anyway.

But they were wrong about the willingness of business to pay for good information. It WAS a slow start, not helped by our launch’s woeful execution in the eyes of our non-technie business people who tried to sign up on day one.

But the graph on the paying customers just keeps tracking up on a 45 degree angle. There was no explosion of subscribers. They just started to come on in a steady stream. And the number in the stream is eerily the same each week. It doesn’t jump up and down, good week, bad week. The just keep turning up. And paying up.

So how many have we got?

The number signed up and growing is now at 7500 and growing.

We have sold individual subscriptions and bulk subscription licenses to some of the biggest companies in the country, which enables all their staff on their domain name access the paywall.

The real access number based on the computer-enabled employees among the corporate subscribers is in the region of 21,000. But the access rights purchased are being heavily used by the senior executives and partners and not the by junior staff, which make up the majority of the employees. Hence our internal estimate is 7500.

I don’t want to break down the details of these numbers because we are in a very competitive business. But our corporate clients include some important early adopters including Russell McVeigh, Minter Ellison, the Reserve Bank, NZTE, Colliers International, AMP Capital, Commerce Commission, Ernst & Young, Chapman Tripp, AWS Legal, University of Canterbury, NDA Engineering Ltd, Institute of Chartered Accountants and Forsyth Barr.

A point is made that people are not spending much time on the NBR site. I don’t think this is a problem for us. Our senior business executive readers are typically busy people. They come on to check what’s what and leave, unless something pertaining their own company or industry is making the news. They are time poor.

As your report noted, the quality of the writing and the actual website are not in dispute “it’s just a shame that less of us are seeing the content.” I agree, I think the content has been outstanding journalism and far and away better than business fare offered on the mainstream sites. And so it should be. Business reporting is our core business.

Our journalists are now confronted daily with a question that never crossed the mind of journos of my generation when sitting behind a keyboard: Will someone pay to read this? We never had to worry about such stuff. Our paper's circulation was a given. The readers were given whole pages of stories to choose from. If they didn’t like yours it was tough luck. Today technology lets us know how many impressions were scored on any given story. It’s become a transparent and revealing experience to those working in newsrooms.

Some NBR newspaper readers have complained that they are being charged twice for the same information if they subscribe to the NBR 24/7 site. But the site is a different business entirely because it’s a news service. NBR print is a weekly summary and analysis of the country’s business, financial and political affairs. Our competitors frequently regurgitate their newspaper copy online and people have wrongly assumed we do the same. It’s been very difficult to convince even the most intelligent of them that this is not the case.

Meanwhile we are continuing to add new content features to the site and our print archive is also about to go online to subscribers.

In the end, the success of the NBR pay site will depend on the quality of its content. It’s that simple. I believe that business people WILL pay for good quality editorial content. If we fail to maintain and improve the coverage we’re providing to New Zealand business the enterprise will fail. It’s not a matter of cost for our customers. They will gladly part with the petty cash we charge to become subscribers. They won’t pay a cent if they think it’s rubbish.

Did we make the right decision with the paywall launch? I think the jury is still out. We’ve got a lot of customers but we need a lot more. They are continuing to sign up and that’s the best measure we have that we’re on the right track.

My gut feeling is that the site will get better and better and pick up more and more subscribers. But we are not on an ego trip. If it doesn’t work we’ll stop doing it. I’d hate to die wondering whether it would have been a success and there’s only one sure way to find out.

Newspaper industry "best practice" – laying off journalists, dumbing down the newsrooms and using heaps of dirt cheap overseas cut-and-paste material to fill all the space, is a scenario that I would find profitable, but not satisfying.

Thank you for your ongoing interest in our progress.

Regards,
Barry Colman
Publisher