It is plain to see that certain industries are being hard hit by the rise of digital media. The music industry is pretty much clueless as to how to respond – so much so, that Apple (through it’s iTunes store) is now the world’s leading music retailer. But close on their heels are newspapers and magazines. Suffering from a precipitous fall in advertising revenues and subscribers, newspapers are scrambling to work out how to respond. Rupert Murdoch’s approach has been to try and woo readers online into paid websites where he is offering them… well, I think that’s the problem. What’s he offering them?

As far as I can tell from friends I know who’ve signed up for The Times online’s subscription service, they’re mainly there for all the freebies and giveaways they’re currently getting. This is a clear loss leader strategy, as they’re giving away subscriptions for £ 1 a month as it is. Even so, less than 10% of their print subscribers have taken up an online subscription.

One of the problems is that there seems to be no strategy about creating compelling content that sits behind the paywall. They’ve just taken their regular stuff and started charging for it. I don’t think I need to point out how dumb this is, when it’s basically news and analysis thereof, and you can get all that and more for free in (literally) thousands of other places. Murdoch seems more focused on protecting his print business than creating a genuinely new online business.

Worse still, advertisers don’t like the paywall. They’re complaining that their adverts have a much smaller target market. An article in The Independent quoted Rob Lynam, head of press trading at the media agency MEC, whose clients include Lloyds Banking Group, Orange, Morrisons and Chanel: “We are just not advertising on it. If there’s no traffic on there, there’s no point in advertising on there.” Lynam says he has been told by News International insiders that traffic to The Times site has fallen by 90 per cent since the introduction of charges.

Even worse is that apparently publicists and their clients are increasingly reluctant to give interviews or stories to the Times – you can understand why.

And worst of all, there are rumours that some of the Times’ top journalists are also not happy. These are big byline writers who have a very real vested interest in ensuring their names are well known in the public arena. If their columns are hidden behind a pay wall, then their names will be hidden there too (their paywall-protected content doesn’t even feature in search engine results). And you can guess that it won’t be long before they decide to move on.

I don’t know what Mr Murdoch will call his newspaper if it loses subscribers, advertisers and writers. But “newspaper” it will not be… And, as an industry, the leaders of newspapers trying this paywall route are acting like bastions of a dying Empire. Read this excellent article by a company that has been barred from doing any work with the New York Times because they dared to criticise it (the irony of that is almost too much to bear – how much can you trust a news company that censors its critics?). This is going to end very badly for all of them!

So, what should they do?

They have to provide some reason to buy into the paywall. “So you can keep getting The Times” is not a good enough reason. There has to be some unique proposition for the online newspaper.

Read this excellent article on five different propositions that could be made, and how some newspapers are getting it right (here is a shorter summary of the propositions, without the “winner and loser” case studies).

The Times could create unique content (think the FT or Wall Street Journal), convenience (Kindle or iPhone apps), unique usefulness (think paid for searchable TV guide listings – free information repackaged in helpful ways), unique packaging (Wired’s iPad app), or a unique experience (think of Stephen Fry’s newest book as an example).

There are many things they could try. But, hey, if they’re not going to give me free news, why should I give them free consulting?

What do you think of the Paywall? And what do you think The Times should do? They have a few options (only a few), but right now it looks as if the “old media” heads are in charge – and charging down the wrong path!