There’s been much coverage of the ideology of paywalls for online content, particularly for newspapers, but less has been written about the practicalities of making a paywall work and how a publisher can create a winning strategy. So congratulations to Pete Kirwan of the Media Briefing for the first thorough attempt at a paywall handbook. Here’s my abridged version of the practical issues for publishers.
1. Getting your Google strategy clear
There’s an ideological war between the “set your content free” enthusiasts and the old guard publishers who believe quality journalism has to be paid for. The search, links and social media value of freely available articles need to be considered. Murdoch takes a hard line: Times articles can’t be found on Google. An alternative is to use First Click Free; where articles are visible by search but the next click lands on a paywall. Or snippets in search results can be designated as subscriber only. Each publisher has to find their perfect balance between free content for traffic and paid content for revenue.
2. Picking the right business model
Paywalls come in different flavours. The Times’ approach is “total lockdown.” A softer approach is “freemium“, with news or general articles freely available, and premium content such as analysis, data or archives available as an upgrade. But this adds cost in sorting content into each category. Metered access is a compromise where users choose what they want to read, but there is a ceiling on number of articles viewed a month before paying. While some users will game the system; if just a minority this may be acceptable. Time-limited access, such as daily or weekly passes, are popular among European newspapers. B2B publishers can develop site licences for large corporate subscribers. And finally, micropayments, which can have high transaction costs but permit users to mix and match from different sources.
3. Choosing a technology solution
The biggest headache isn’t caused by the cerebral activity of picking business models; it’s reserved for developing the technology to deliver it. Key issues include flexibility for the inevitable testing and tweaking of business models, linking to existing circulation systems, allowing a single sign-on, and providing analytics to support the ad proposition. Vendors include Abacus, Subhub, Press+ and Media Pass, with rumours that Google and Paypal will develop paywall platforms; while Skiff and Next Issue Media explore wireless options for mobile & tablet.
4. Sorting the ad pitch
A smaller subscriber audience can be profitable if ads can be sold at a premium. The FT boasts of £35+ CPM, and other niche publishers can extract higher prices for valuable audiences. This requires good analytics to demonstrate the quality of subscribers.
5. Setting the price
The multiple surveys of willingness to pay have all focussed on news, perhaps the least valuable category of content, but the consensus is that between 5 and 15% of current users will pay something, and about 80% will seek a free alternative. Price expectations are low, with most publishers charging $5 a month or less. However, once a proposition is proven, prices can rise, as the FT has demonstrated.
So still lots to learn. The debate has focussed on newspapers, as they have the most acute problem with classified and print circulation decline, and they have the resources to create technology solutions. But there are examples of niche publishers as well who have created paid-content propositions – see the Media Pioneers series for some good stories on Racing Post, K9 Media and Green Star Media. Or my previous articles on paid content for b2b publishers and what content will people pay for.
The Media Briefing are running a conference on paywalls on 24 February 2011 in London. Delegates get a copy of Pete Kirwan’s full report with their ticket. Find out more here: http://paywalls.themediabriefing.com/
About the author: Carolyn Morgan works with specialist media businesses to develop their business strategies in the turbulent media environment through her consultancy business Penmaen Media. Read recommendations from past clients. Contact us for an initial discussion about your strategic issues. Carolyn runs the Specialist Media Show; please get in touch if you are interested in attending or contributing to the 2011 event.