Long past early days of pay­walls, pubs find­ing right fit

Newspapers & Technology Magazine - - Front Page - By Sarah Zook & Tara McMeekin Ed­i­tors

Mon­e­tiz­ing news­pa­pers in the dig­i­tal age has proven an in­dus­try-wide chal­lenge — and nearly two decades af­ter the first online pay­wall was erected, the ex­per­i­ments among pub­lish­ers con­tinue to be as di­verse as the news­pa­pers them­selves.

When The Wall Street Jour­nal be­gan charg­ing for con­tent in 1997, a year af­ter the launch of wsj. com, Dow Jones & Co. be­came the first pub­lisher to in­sti­tute a dig­i­tal sub­scrip­tion model.

Some 18 years later, more than 450 North Amer­i­can news­pa­pers have launched some form of pay­wall, and while there still isn’t a magic bullet, many have de­ter­mined — through years of ex­per­i­men­ta­tion — what works and what doesn’t.

“There isn’t just one [pay­wall] that fits all news­pa­pers and mag­a­zine groups,” said Paul John­son, CEO of pay­wall plat­form provider MPP Global. “It’s re­ally un­der­stand­ing what the client wants and how they want to en­gage with the au­di­ence.”

Fig­ur­ing out how a news­pa­per can best con­nect with its au­di­ence is key to un­der­stand­ing what, if any, dig­i­tal sub­scrip­tion model or pay­wall sys­tem will be suc­cess­ful.

“The size of the pa­per is less rel­e­vant than the loy­alty of the pub­li­ca­tion’s online users,” said David Brauchli, global di­rec­tor of com­mu­ni­ca­tions for pay­wall plat­form Pi­ano Media ( for­merly Press+). “Sites that have lots of peo­ple who love read­ing them and check back con­tin­u­ally dur­ing the day are more likely to be suc­cess­fully mon­e­tized than sites whose users and traf­fic come from search en­gines or so­cial media.”

What are the op­tions?

There are four main pay­wall mod­els, but as both John­son and Brauchli stress, they can be mod­i­fied to fit a par­tic­u­lar pub­li­ca­tion’s strate­gic ap­proach.

The freemium model locks some con­tent down, while other con­tent re­mains free. A me­tered, or soft pay­wall model, al­lows users to view a cer­tain amount of con­tent be­fore be­ing asked to pay, and a hard pay­wall al­lows only paid sub­scribers to ac­cess all con­tent.

The fourth, and new­est model gar­ner­ing at­ten­tion among pub­lish­ers, is based on mi­cro­pay­ments, which al­low users to pay for con­tent on a per-ar­ti­cle ba­sis. The Win­nipeg (Man­i­toba) Free Press in Canada be­came the first news­pa­per to adopt such a model in April.

It’s akin to an iTunes for news­pa­pers, said Paul Samyn, editor-inchief of the Free Press.

The pub­lisher said it made a point to learn from other media in its tran­si­tion to mi­cro­pay­ments. The Free Press didn’t have a pay­wall at all be­fore May 11, but has since launched a new web­site and dig­i­tal sub­scrip­tion model that fa­cil­i­tate the new pay as-you-go frame­work.

“We wanted to get into the dig­i­tal game,” Samyn said. “We couldn’t con­tinue to give away con­tent and not get any­thing in re­turn.”

The Free Press wanted a sys­tem that would be seam­less for read­ers. To that end, the pa­per worked with MPP Global to build pack­ages based on a user’s pref­er­ences. A reader could choose to pay for a dig­i­tal sub­scrip­tion, for ex­am­ple, or to pay per ar­ti­cle. Ini­tially, the Free Press re­quires read­ers to register, and af­ter a cer­tain num­ber of ar­ti­cles have been read they are prompted to cre­ate a pay­ment ac­count with a credit card. Full dig­i­tal ac­cess is priced at $16.99 a month and in­cludes Satur­day de­liv­ery of the print edi­tion. In­di­vid­ual ar­ti­cles, mean­time, are priced at $0.27 apiece.

“What we’re hop­ing is that peo­ple will de­cide that they don’t want to pay up­front — but they want to read one col­umn or one ar­ti­cle — then $0.27 is noth­ing,” Samyn said.

Read­ers aren’t charged un­til the end of the month so they can de­cide whether buy­ing a full dig­i­tal sub­scrip­tion or con­tin­u­ing a la carte is the best op­tion for them.

“We wanted to stop try­ing to im­pose sub­scrip­tions based on news­pa­pers and in­stead start look­ing at pur­chas­ing de­ci­sions based on the In­ter­net,” Samyn said.

The Free Press’ model also al­lows the pub­lisher to mon­i­tor users’ read­ing habits through MPP Global’s “probe,” which John­son de­scribes as code that re­sides on the pay­wall net­work and con­stantly mon­i­tors web­site traf­fic. Through this probe, the Free Press can iden­tify end users and de­ter­mine what ar­ti­cles are be­ing read.

“It es­sen­tially gives users a dig­i­tal fin­ger­print,” John­son said. “It can iden­tify what they are read­ing: ar­ti­cles, (spe­cific) jour­nal­ists, etc. and we can ap­ply rules to that traf­fic.”

For the Free Press, that means the web­site looks dif­fer­ent depend­ing on the user.

“My read is dif­fer­ent from my mother’s, whose is dif­fer­ent from yours,” Samyn ex­plained. “The site starts to pick up and send con­tent based on the type of reader.”

If a user reads all sports con­tent, for ex­am­ple, that would ap­pear on top when they visit the site. This also al­lows the Free Press to cre­ate pack­ages for read­ers or to de­ter­mine how dif­fer­ent con­tent should be priced. In the fu­ture, in­ves­tiga­tive pieces and ex­clu­sives might get a higher price tag, Samyn said. The Free Press may also cre­ate bun­dles depend­ing on user en­gage­ment, for ex­am­ple all sports or en­ter­tain­ment news would carry a flat rate per month.

“We need some­thing that will en­able us to pro­vide the level of jour­nal­ism that a city like Win­nipeg, Man­i­toba needs,” Samyn said. “We need to stay in the game. I think this is a model for sus­tain­abil­ity.”

Globe hits 65K paid subs

The Bos­ton Globe, mean­time, has been through a few it­er­a­tions of its pay­wall model and has achieved a high level of suc­cess, tout­ing about 65,000 dig­i­tal-only sub­scribers — the high­est num­ber of dig­i­tal sub­scribers for a re­gional daily.

In 2011, the pub­lisher in­sti­tuted both a freemium and a hard pay­wall model with tan­dem web­sites (see News & Tech Novem­ber/ De­cem­ber 2010).

“We were kind of at the fore­front of hav­ing a two-site ap­proach,” said Peter Doucette, who over­sees cir­cu­la­tion as The Globe’s vice pres­i­dent of con­sumer sales and mar­ket­ing. “We rec­og­nized that we needed to try some­thing, and that we needed to be bold.”

So, the pa­per opted to cre­ate a sec­ondary site to its long­time free Bos­ton.com, and launched boston­globe.com with a hard pay­wall.

While the launch of the paid site was ini­tially well re­ceived, Doucette said it’s been an evo­lu­tion­ary process.

The Globe still op­er­ates both sites, but the in­ter­ac­tion be­tween the two is very dif­fer­ent than when the pay site first launched. Ini­tially the free Bos­ton.com site in­cluded con­tent from The Globe. Now, all Globe con­tent is on Boston­Globe. com and the site has tran­si­tioned from a hard pay­wall to a me­tered model. When the pa­per moved to this model in March 2014, users were al­lowed 10 free ar­ti­cles. Now they are asked to pay af­ter read­ing five. Dig­i­tal-only ac­cess is cur­rently priced at $0.99 a month.

Bal­anc­ing act

“The ben­e­fit we’ve seen [with the soft pay­wall] is that it al­lows ca­sual visi­tors to ex­pe­ri­ence con­tent at some level, while not al­low­ing too much to be free that it di­min­ishes the act of sub­scrib­ing,” Doucette said. “It’s a bal­anc­ing act.”

For Pi­ano Media, Brauchli said, me­tered pay­walls rep­re­sent the most suc­cess­ful model among its clients.

“The me­ter al­lows ca­sual traf­fic, such as that from so­cial media or search, to sam­ple the site unim­peded by the pay­wall, which tar­gets the heav­i­est users,” he said.

For The Globe, ex­per­i­men­ta­tion and per­son­al­iza­tion have been the keys to suc­cess.

“We’ve put a lot of time, energy and re­sources into tak­ing ad­van­tage of the traf­fic we have and op­ti­miz­ing that traf­fic,” Doucette said.

The pa­per has done hun­dreds of ex­per­i­ments on how to max­i­mize and ease user in­ter­ac­tion. Brauchli ap­plauds that method and be­lieves know­ing what read­ers want is the key to suc­cess.

“Pub­lish­ers who in­vest the time and ef­fort into find­ing out what their cus­tomers like and then of­fer them more val­ued con­tent are more likely to be suc­cess­ful,” he said.

The Globe has grown its to­tal au­di­ence by al­most 100 per­cent in the last three years, ac­cord­ing to Doucette, and roughly one-fourth of its over­all read­er­ship is dig­i­tal.

“We’ve found ways to aug­ment print with dig­i­tal,” he ex­plained. “We con­tinue to try and fig­ure out how to in­vest, adapt and ad­just to put our­selves on a path to sus­tain­abil­ity.”

And that flex­i­bil­ity is pay­ing div­i­dends. In the first quar­ter of 2015, The Globe sold more dig­i­tal sub­scrip­tions than print sub­scrip­tions for the first time ever.

“This isn’t be­cause print is fail­ing,” Doucette said. “Its be­cause dig­i­tal is grow­ing.”

As The Globe is able to learn more about users, the pa­per can tai­lor con­tent for spe­cific groups. Go­ing for­ward, Doucette said the pa­per will in­crease per­son­al­iza­tion.

“We spend a lot of time on user ex­pe­ri­ence,” he said. “It’s a good tool. I think where we’re go­ing is a much more dy­namic-based model that is more per­son­al­ized.”

No pay­wall

Still other pa­pers that have in­sti­tuted pay­walls have ul­ti­mately de­cided charg­ing for dig­i­tal con­tent isn’t the right model for them. Af­ter de­ter­min­ing that a pay­wall wasn't sus­tain­able, The Toronto Star dis­man­tled dig­i­tal sub­scrip­tions al­to­gether in March. The re­ac­tion from read­ers?

“It was a non-event,” said Sandy MacLeod, vice pres­i­dent of con­sumer mar­ket­ing and strat­egy at The Toronto Star.

The pay­wall just wasn’t work­ing to re­tain read­ers and sub­scribers, he ex­plained.

In Au­gust 2013, The Star put up a stan­dard me­tered pay­wall — the model most news­pa­pers were adopt­ing at the time, MacLeod said. The me­ter was set at 10 free ar­ti­cles per month and print sub­scribers were able to add dig­i­tal ac­cess for $4.99 a month.

MacLeod said he was pleased with the ini­tial launch and the ini­tial uptick in sub­scrip­tions. By the end of 2013, though, growth on the dig­i­tal side stalled.

“Our pay­wall hit a wall so to speak,” he said. Af­ter find­ing dig­i­tal growth dif­fi­cult be­yond a cer­tain thresh­old, The Star em­barked on a re­search jour­ney. Staff in­ves­ti­gated a num­ber of other news­pa­pers of all sizes and found that most of the com­pa­nies ex­pe­ri­enced a sim­i­lar tra­jec­tory. Even with heavy mar­ket­ing and dis­counted sub­scrip­tions, it was clear that a rel­a­tively small num­ber sub­scribers were in fa­vor of the pay­wall, and it was go­ing to be dif­fi­cult to in­crease that num­ber, MacLeod said.

Another six months of re­search and strate­giz­ing has led The Star to a part­ner­ship with La Presse of Mon­treal. In Spring 2016, The Star plans to break out its own tablet pres­ence via an app called Star Touch, which fol­lows the lead of La Presse’s hugely suc­cess­ful La Presse+ tablet app. La Presse’s $36 mil­lion in­vest­ment in the app has made it the pub­lisher’s pri­mary prod­uct.

“We don’t be­lieve (Star Touch) can co­ex­ist with a pay­wall,” MacLeod said. “We think that con­tin­u­ously im­prov­ing tablet and smart­phone ap­pli­ca­tions is the best way for­ward for us.”

MacLeod feels strongly that with sig­nif­i­cant down­loads, read­ers and a size­able daily au­di­ence us­ing the prod­uct, The Star — like La Presse — will be able to sell “sig­nif­i­cant advertising at im­pres­sive rates.”

“Pulling the pay­wall was a pretty bold move and we were will­ing to make it,” he said.

Mean­time, a sur­vey of news­pa­pers con­ducted by Re­search and Anal­y­sis of Media dur­ing the In­ter­na­tional News Media As­so­ci­a­tion’s World Congress in May, showed de­clin­ing in­ter­est in con­sumer paid con­tent and pay­walls. In 2013, a sim­i­lar RAM sur­vey found that 59 per­cent of INMA news­pa­per del­e­gates said paid con­tent was crit­i­cal, while this year’s num­ber dropped to 46 per­cent. Only 27 per­cent viewed pay­wall de­vel­op­ment as crit­i­cal vs. 48 per­cent in the 2013 sur­vey.

In­stead, the sur­vey showed a sharp fo­cus on dig­i­tal trans­for­ma­tion, with ris­ing em­pha­sis on mo­bile and data an­a­lyt­ics. Sixty-nine per­cent of INMA del­e­gates sur­veyed said mo­bile rev­enue streams were ab­so­lutely cru­cial, com­pared with 48 per­cent in 2013. Of those sur­veyed, 58 per­cent re­ported that data an­a­lyt­ics were ab­so­lutely cru­cial, com­pared with 41 per­cent two years ago.

While news­pa­pers will un­doubt­edly con­tinue to erect and mod­ify pay­walls in an ef­fort to pro­tect and mon­e­tize their con­tent online, the next big chal­lenge (or op­por­tu­nity) may very well lie in launch­ing new prod­ucts for which read­ers are more will­ing to pay.

For N&T’s com­plete list of the more than 450 North Amer­i­can news­pa­pers with pay­walls, visit www.newsandtech.com/stats/ pay­walls.html.

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