The Times, They Are A-changin’: The New Economics of Weak Copyright Enforcement

Abstract

It seems clear that the New York Times’ online paywall, which debuted in March 2011, was built to allow circumvention by those determined to circumvent it. The paywall is not really a mechanism for enforcing copyright. Rather, it is a mechanism for sorting and price discrimination. More than a year after its launch, to the surprise of many observers, the Times’ paywall appears to be a great success. Why was this such a surprise? When people evaluate content and copyright issues, it is common for them to implicitly or explicitly rely on one of two extreme viewpoints about the nature of the content industry: (1) that you can’t make money by giving your product away or (2) that any sort of paywall or access restriction to content is doomed to failure because of the unique properties of the world of bits. Both of these viewpoints are wrong. A moderate position is more nearly correct: The purpose of access controls should not be to try to exclude all nonpayers. Rather, the role of access controls should increasingly be to induce those users who are willing to pay for access to do so, and to pay no mind to those users who are willing to invest some effort in circumventing them. Times customers’ patronage of content they enjoy is evidence that we don’t need the state to promote the progress of science and the useful arts.