Friday, February 11, 2011

The state of play for paid content, 2011

The late but not necessarily lamented 2010 was supposed to be the Year of the Pay Wall for newspapers.

But consumers overwhelmingly repudiated the efforts of the few publishers who dared to demand payment for access to the news, leaving newspaper content about as widely and freely available on the web at year's end as it had been for the prior decade and a half.

Because hope springs eternal among profit-challenged newspaper publishers, they are not giving up. Many have plans for 2011 to introduce what I would call Pay Speed Bumps.

While these efforts may be slightly more successful than Pay Walls, they are being launched in an environment in which plenty of competitors -- TV broadcasters, Patch.Com and local start-ups, to name a few -- will be perfectly happy to deliver the news of the day for free. So, publishers planning speed bumps will have to engineer them wisely.

Speed bumps, as everyone knows, are irritating obstacles in the road that cause you to slow down or risk shaking a few fillings out of your molars. They don't keep you from getting where you want to go. They just make the trip slightly slower and less pleasant. And, if you are anything like me, they encourage you to look for an alternate route.

Speed bumps are exactly like the complicated new approaches that publishers have concocted to try to get paid for the stories they port from their papers to the digital media. These complex plans are bound to confound consumers as never before, raising the question of whether the consternation and ill will they engender will be worth the modest revenue they bring in.

Life would have been simpler for publishers if they had been able to erect monolithic pay walls to force visitors to ante up for online access to the news. But consumers, who have been hooked for the better part of a generation on unencumbered access to news, music, video and other content, failed to cooperate.

As revealed in this survey of pay walls at three dozen newspapers by Belden Interactive, fewer than 1% of consumers on average were willing to subscribe. After experiencing alarming drops in readership at their websites, papers in places like Harlingen, TX, and Sonoma, CA, quickly restored free access to their sites.

With pay walls off the table, publishers now are moving toward hybrid systems that will let them charge some kinds of fees for some kinds of content under certain kinds of circumstances. Consumers will have to be smart and diligent enough to figure out how they work.

Here are the three principal emerging models:

:: Metered Sites. As soon to be typified by the New York Times, this approach allows a site visitor a certain number of free views but then requires her to buy a subscription after the limit is reached. The number of free views can be changed dynamically, so the newspaper can generate as many page views as it needs to maximize ad sales. Although publishers may understand the rules of their schemes perfectly well, consumers may become frustrated by the unpredictability of whether and how often they can read the news. How many will give up in favor of the myriad alternative free news sites?

:: Hybrid Sites. Some content will be free and some will cost money at the web and mobile sites of the Dallas Morning News. Which is which? "Subscriber content will include proprietary news and information produced by The News," says the paper. "Headlines, breaking news, most blogs, obituaries, classifieds and nonproprietary content such as syndicated wire stories will remain free." While publishers may know the difference between proprietary and nonproprietary content, this sounds like the recipe for the sort of confusion that could cause a consumer to look elsewhere.

:: Dueling Sites. The Boston Globe, which for years has put the contents of the flagship newspaper on Boston.Com for free, has split its web presence in two, keeping Boston.Com free but charging for access to a new site called BostonGlobe.Com. The free site will include only headlines and bulletins (not whole stories) from the flagship paper, augmented by content from other sources. Visitors who pay for BostonGlobe.Com will have access to the full paper. While this approach cuts the straightest corners of the three, it depends on consumers understanding the difference between the two sites, their willingness to toggle between them -- and their enthusiasm for paying for content that used be free and may turn up elsewhere at no charge.

You can't fault newspapers for wanting to be paid for their valuable content, but each of these approaches seems to be far more publisher-friendly than consumer-friendly.

Given the openness and competitiveness of the web, the danger in these speed bump-inspired schemes is that they may encourage consumers to forsake newspaper sites for ones where the news is simply, and mercifully, free.
Copyright 2011, Editor & Publisher

11 Comments:

Blogger Mike said...

"Each of these approaches seems to be far more publisher-friendly than consumer-friendly."

100% accurate. Isn't that pretty much the legacy of of newspaper industry, and how we got here in the first place?

5:48 AM  
Blogger Michael said...

Financial Review in Australia has reported 53% subscription growth year on year and just over 9 per cent penetration of print circulation to its digital subs.
The strategy is based on a brand relationship with a niche business audience, media neutral or multimedia in character.

5:44 PM  
Blogger Steve Ross said...

I think we got here by not having unique content anyone in their right mind would pay for. And since then we've cut staf by 30 percent or more. DMN still has a real staff and real newsroom. Enter that into the equation.

7:00 PM  
Blogger Anette said...

Great post, as always.
I appreciate the "speed bump" metaphor, "pay wall" is a counter-productive terminology for the traditional media houses.
I launched the notion of an "entrance" in our organization last year. An entrance is attractive, a promise of what's behind. Some people wait in line for hours to get up to entrances, they get bullied by bouncers - and they pay! - to get in.

I agree that smart pay models might ease the transition. But it' s all about the offering.

Will the down-sized media houses be able to deliver products and services that will make people pass the bouncers?

In Sweden we have several examples that seems to hint that the answer is "yes".

12:23 AM  
Blogger dan said...

These 25 words need to be shouted lout and clear. You said it!

''You can't fault newspapers for wanting to be paid for their valuable content, ......but each of these approaches seems to be far more publisher-friendly than consumer-friendly.''

That is the cruz of the matter. The NYT paywall will fail. I said that a year ago. I still say it.

6:56 PM  
Blogger We Are Buckland said...

This comment has been removed by a blog administrator.

9:33 AM  
Blogger We Are Buckland said...

The paywall approach in whichever guise is doomed to failure.
Publishers will one day realise that the value in their online business lies not in the content, but in the audience which that content generates.
Attempting to transport the print business model (charge for content, sell physical space around that content, no shared risk with advertisers) has not and will not provide a viable future for online news publishing.
Following the principles of successful online businesses will do so - create great content; generate big audience (and harvest their data); provide measurable response to advertisers; share the risk with the advertiser, i.e. commission-based rates rather than fixed ratecards.
News organisations must use their matrix strengths - don't just sell (or give away) mobile apps, tie up with the mobile networks and sell the phone contracts to your print and online readers, preloaded with your title's app. Once they register on the network, harvest the data. Then sell that audience to your print advertisers, by promoting their app download in print, which is free to your mobile subscribers...
The revenues we used to enjoy have not disappeared into the ether, they have just gone elsewhere. Time to get smart and attract them back.

9:44 AM  
Blogger Jeff Mignon said...

This comment has been removed by a blog administrator.

8:44 PM  
Blogger Jeff Mignon said...

More numbers: the French newspaper Le Monde (310,000 daily print copies) has 7M UV, 100,000 digital sub but,among them only 39,000 are web only paid subs. So, 0.56% of the UV. They have a pay wall for about 6 years.
With my partner Nancy Wang, we develop different models for the new business models for news for CUNY/ Jarvis, I'm glad to see that other real numbers are confirming our projections.

8:51 PM  
Blogger Mychal Merridew said...

Agree - the speedbump analogy was a good one.

How, then, should a news-source begin to charge? If we can agree that it was a mistake to give it away for free, then shouldn't we begin (quickly) to rectify that mistake and charge? Example: if I want reliable information on the Huskers, and Omaha News tells me to pay for it - I'm gonna pay b/c I will rely on them for accuracy. The rest on the web will be hearsay/unconfirmed.

5:11 AM  
Blogger Greg said...

Is Google One Pass a speed bump too? Is PayPal's Micropaymenst of Znak it! obstacles?
No matter how many holes you will try to poke in one content monetization system or another, they are here to stay. More, they are your only solution, so, stop complaining -- start using them. Improve them if necessary, but do not reject something only because you THINK it might not work.

5:00 AM  

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