If you charge someone for something they can get for free elsewhere, a lot of people won't pay. That's the simple reality of it. You pay for a newspaper, sure, but would you, say, subscribe to The Wall Street Journal online, when you could just read blogs? Rupert Murdoch tried to make that happen, but now everyone who isn't him hates it.
Rupert Murdoch pulled both The Times and The Sunday Times in the United Kingdom behind paywalls — if you don't subscribe and pay a certain fee, you can't read more than a stub of the article. Naturally, this immediately shrunk the audience at both those news outlets. Another side effect? Murdoch removed his two sites from search engine pages, which bring in a lot of readers.
You've probably already spotted the problem here, folks. The sites you know and love — such as your humble tech-obsessed servant, DVICE — make money from advertisers putting up ads on a site based on how much traffic it gets. Less eyes on said site, fewer advertising dollars. Murdoch wanted that cash and more, taking it right out of readers' pockets.
Now, according to British news site The Independent, traffic could have fallen as much as 90%, and advertisers simply don't think it's worth spending money on them. What's worse, the reporters who work for the site are being affected, which in turn hurts the quality of the news:
Despite this, publicists have told me that clients are increasingly reluctant to give interviews or stories to The Times, on the grounds that they would not be made freely available via search engines. Dan Sabbagh, a former media editor at The Times who now runs the media website Beehive City, says News International journalists are frustrated by the decline in their audience.
On devices such as the iPad, magazines and newspapers have found the way to deliver digital content and still have consumers happy to pay for it. Murdoch doesn't show any sign of changing what he's doing — but it'll be interesting to see if he continues to put up paywalls, or his the two sites act as a lesson against them.