Paywalls are not sustainable, but he’s got everything else in this post wrong. The notion that article size in kbs bloat means there’s a greater cost, is bullshit. Content is the expense, not the hosting. What’s changed is that no one believes any longer that if you put in the sweat equity that you’ll cash out later.
Turns out, you need to pay rent, and rents are going up everywhere. Turns out, sweat equity isn’t very liquid, wait it technically is, never mind.
Look at podcasting or the App Store, both more recent and over a shorter timelines hit the same wall. When these were small places it was easy to make money, and thus you didn’t need to charge people. But when there are now 5,000 podcasts which are essentially two white guys talking about tech, it’s pretty hard to demand money for that content. When there’s 3 clones of your app in the store, and 15 competitors which are slightly different, it’s hard to to convince people to pay for your app.
The bottom line is that just as paywalls don’t scale, neither does advertising. At least not if you want to afford rent. If money is to be had from ads then competition for that money increases and the shares to most are diluted to the point of not mattering. With paywalls, no one can afford them all. The audience is, the patron pool, is smaller. What’s the ideal? No clue, if I knew I’d be doing it.