2018 was unquestionably the year of the paywall. Well-known publications from Vanity Fair to the New Statesman decided that paywalls were the best way for them to build relationships with their audience in an increasingly tough ad environment, with Condé Nast announcing just a few months ago that they were going to put every publication behind a paywall by the end of this year.
Nicholas Thompson, the Editor-in-Chief of WIRED, has been the driving force between two of Condé’s most high-profile paywall launches; firstly putting up a metered paywall on The New Yorker back in 2014, then introducing it to WIRED last February.
Media Voices caught up with Thompson this week to discuss everything from their positioning as a tech magazine, to their high-profile features on Facebook, and whether a balance between privacy and safety can ever be reached. He also talked about his approach to launching the WIRED paywall, what his dream paywall would look like, and what advice he’d give to other publications looking to do the same.
Here, we round up the key learnings from their year behind a paywall.
Why introduce a paywall?
For a publication that has always been free online, and which has been associated with the notion that content on the internet should be free, a paywall was a bold move. This was the biggest concern Thompson had when he was looking to introduce the paywall last year.
“We come out of the Silicon Valley counterculture libertarianism, we come out of a philosophy where people in general have thought information should be free, information should travel, don’t put any walls around your information.
“So, when we launched the paywall, I was very worried that a whole bunch people who’d loved WIRED for 25 years were going to write to me and say, ‘You’re not only making this magazine impossible to read, you are destroying the ideals of the founders’. And that turned out just not to happen at all.
“In fact the founders said, ‘Oh that’s great. Smart way to do it, charge for your content, that’s important.’ And everybody seemed to understand. There’s almost no backlash against the paywall.”
Although Thompson was “100 percent confident” about introducing the paywall at WIRED, he highlighted the general concerns every publisher has when restricting or changing access to content in any way.
“Let’s say you lose 10 percent of your traffic. You have been monetising it at X, you lose a certain number of eyeballs, ad impressions, ad revenue, affiliate revenue, brand equity. So you lose money when you launch a paywall because it will not increase traffic, it will most likely only decrease traffic.”
Ironically, the staff attitude Thompson has had to combat has been around traffic-driving pieces. Writers have said “I don’t want to write that, that’s just going to get tonnes of traffic, and not a lot of subscriptions.” Thompson has had to reassure them that ad revenue is still hugely important for the brand, and is still the primary revenue driver, for now.
“Just because we introduced a paywall doesn’t mean that 90 percent of our revenue is from consumer revenue. It is still ad dollars and we still need as many readers as we possibly can get.”
The paywall a year later
It’s a trade-off that seems to have paid off so far for the tech magazine. Thompson wrote a piece on WIRED a fortnight ago reflecting on the paywall launch, and highlighted that they increased the number of new digital subscribers in the first year by nearly 300% over the year before.
“We drove 108,000 subscriptions with our first year with a paywall,” Thompson told the Media Voices Podcast, with the story that drove the most being their 12,000 word feature piece on ‘Inside The Two Years That Shook Facebook – And The World’.
Although in-depth features like that are a likely driver of subscriptions, Thompson said that some of the other top drivers have been a real surprise to him, including some stories that didn’t even get significant traffic numbers.
“We ran this very dense piece called ‘The Genius Neuroscientists Who’ll Explain A.I.’, and it got let’s say 140,000 readers, not that many. Say it’s the 65th most read thing on the site, but generated the second most subscriptions.
“What was truly surprising was that we would run lists, like ’17 Best Mother Day’s Gifts’, and they’ve been good lists…and when they were doing really well, they wouldn’t just drive people to click on the story, they would also drive people to subscribe…So that was actually quite heartening, and also a little surprising.”
Preparing for the resubscription challenge
For a publication like WIRED who are still pretty new to paywalls, the next significant challenge is getting those people to resubscribe; something that even publishers who have been in the paid content game a long time still lose sleep over.
But Thompson believes this is straightforward. “We’re trying to write good stories,” he said, when asked if there was anything specific they were doing to prepare for retention. “My view is, if they subscribe, and if they get value from it, they’ll resubscribe.”
“So the resubscription challenge, I think is just a ‘be good’ challenge, which is exactly the kind of challenge you want.”
Thompson’s paywall advice
So what advice would the man who brought paywalls to both the New Yorker and WIRED give to publishers who might be looking at their own ways of generating reader revenue?
The first key point is that paywalls don’t work for everyone. “Think about Forbes, which has this very lucrative contributor network,” Thompson said. “No one’s going to subscribe to the contributor network, in part because there isn’t really an identity or a style or a voice, why would you subscribe to that? But it is an extremely good business for them to be in.
“There are lots of places where the subscription propensity will be extremely low, but the traffic will be extremely high, and it would never make economic sense to launch a paywall.”
On the other hand, there are other places where a paywall can be launched and the meter set extremely high, pulling in just a small number of people. “You get some of the brand equity value of a paywall, and by setting the meter really high, identify an extremely core group of loyal users you can then create some sort of membership program around,” he explained.
For publishers who have made the decision to put up a paywall, there are then many questions around where to bring that barrier down. WIRED allows four stories a month before asking readers to subscribe, whereas Quartz’ newly-launched paywall is much less transparent.
This will come down entirely to the individual publisher and how their audience engages with them. “The most important curve to study…is your engagement curve,” Thompson explained.
“Look at the percentage of your traffic that comes from people who read the story once, look at the percent of the traffic that comes from people who read two stories a month, people who read three, and we’ll have some kind of a downward slope. But at some point the slope will start to smooth out.
“So, at the New Yorker it was very clear that if you read one story, you’re probably not going to read two. If you read two, you’re probably not going to read three. If you read three, you’re probably not going to read four. But if you read four, you going to read five. If your read five you’re going to read six. You read six, you’re going to read seven. So, let’s put the paywall there.
“Finding the point on your curve where the slope changes is the right place to put a paywall.”
The future of the WIRED paywall
However, there’s still room for Thompson to evolve the WIRED paywall, as some publishers are increasingly experimenting with AI to make paywalls smarter. He set out his vision for his ideal paywall, if he had 30 engineers at his disposal to make it happen:
“My dream would be a paywall that can identify as much information about the reader as possible. Not just about the reader, but about their likelihood of subscribing.
“So, are they in a place where they actually have some time? A reader on the subway is never going to subscribe because you have no time, and you might lose your Internet connection, you never going to get out your credit card number….the time of day, the day of the week, all these things have some effect on your propensity to subscribe. If you could weigh all these factors, you could have a very efficient paywall.”
But for now, WIRED are doing it simply, allowing just four articles before the paywall comes down. This in itself is a good lesson for anyone else exploring the paywall space. Keep it simple, then evolve and adapt as your audience gets used to the content no longer being free.