Reuters’ Journalism, Media and Technology Trends and Predictions 2019 report predicts that subscription and membership are going to be the key priorities for the news industry going forward.
More than 50% of the executives surveyed for the report said they would be focusing on subscription revenues in 2019. That is far ahead of the 27% that intend to focus on display, or the 8% and 7% who are looking at native and donations. That according to the authors, “Is a huge change of focus for the industry.”
This year also bought in the news that the Guardian had shown profits after 20 years of constant losses. And of course, The New York Times is going from strength-to-strength building its subscriber base and revenue.
According to the last available figures, The Times had generated more than $709 million in digital revenues in 2018 and crossed 4.5 million subscribers in the first quarter of 2019.
Paywalls vs. subscription fatigue
Successes like these combined with dwindling revenues from advertising is turning more publishers towards erecting paywalls around their content. Those who already have paywalls are tightening them to allow fewer articles for free.
But the threat of subscription fatigue looms. The authors of the Reuters report predict that the rise of paywall will shut off more people “from quality news and make the internet harder to navigate. Consumer irritation will build this year, leading to a combination of more news avoidance and the adoption of ‘paywall-blocking’ software.”
Workarounds to paywalls are probably as old as paywalls themselves. They range from simple tactics like using a different browser or the incognito mode, to more complicated ones that require installation of software or browser extensions.
Earlier many publishers would ignore the loopholes that readers used to workaround paywalls. But in recent years they have been addressing these gaps and also lowering the number of articles available for free. Recently, The Economist tightened its paywall so readers could access five free articles a month down from three a week earlier.
The New York Times, whose paywall could be circumvented using the incognito mode, has addressed the issue. Ditto for The Washington Post, The Boston Globe, and Los Angeles Times. As publishers move to fix these issues and make their paywalls watertight, more sophisticated tools are being created.
The larger question is whether it’s worth all the effort? While paywall workarounds lead to revenue losses, there are those who hold that readers who use increasingly sophisticated tools to circumvent paywalls are not likely to pay for content.
You have to be a real hard-core geek to enable any paywall blocker. For now, it’s a very narrow behavior.Michael Silberman, SVP, Strategy at Paywall tech provider Piano
Silberman told Digiday, “Free riders aren’t that valuable; it’s a low likelihood they will ever pay, so why bother? Publishers are trying to find the right balance between restricting access and making it harder for current and prospective subscribers who are considering it. They don’t want to add too much friction and are wary of tactics that get in the way of that.”
Cecilia Campbell, a consultant for the World Association of Newspapers and News Publishers, said, “With advertising, your revenue comes equally from loyal visitors and fly-bys; all clicks are equal. With healthy user relationships in parallel with developing relevant personalized content, users are less likely to block paywalls.”
Over three-quarters (78%) (out of 200 editors, CEOs, and digital leaders) think it is important to invest more in Artificial Intelligence (AI) to help secure the future of journalism – but not as an alternative to employing more editors. Most see increased personalization as a critical pathway to the future (73%).Reuters Institute’s Journalism, Media and Technology Trends and Predictions 2019
Keeping that in mind, here are some publishers that are using paywalls and driving subscriptions in innovative ways.
A win-win situation
Mittmedia, one of Sweden’s largest media groups employs a ‘time wall’ which it says has helped increase subscriber conversions by 20%. The publisher has twenty websites and keeps all published content freely accessible till an hour after publication.
Mittmedia hit upon this strategy after finding that average pageviews for articles peak approximately an hour after they’ve published. It has also found that most articles have the majority of their traffic after the peak.
The graph below shows the average article pageviews against the number of minutes from publishing.
Katarina Ellemark, Product Manager at MittMedia told Digiday, “We decided the easiest way to get new readers was through recommendations. We trust people a lot more than we trust newsletters, we want people to continue sharing our pieces.
“This was a soft threshold. It was a win-win situation. We had people following the metrics closely, and no one was cherry-picking all the articles in the first 60 minutes.”
The gut feeling in the company was, what are we doing, do we really want to drill a hole right through it? But for the users, it’s super logical; it’s easier for them to decide whether we’re worth the price.Katarina Ellemark, Product Manager at MittMedia
Personalization: “A critical pathway to the future”
According to David Gosen, Chief Commercial Officer at Cxense (analytics and content-recommendations service provider), temporarily opening access to drive reach and volume is one way to grow prospects, but it should be complemented with gathering and working with audience data.
“The overriding subscription strategy has to be reader-led: Serving relevant content to the reader leads to better conversion rates. At its core, future success in the subscription business is unquestionably driven by the AI capabilities to process huge volumes of data to segment and target prospects to convert,” says Gosen.
Publishers are increasingly relying on artificial intelligence to power their paywalls. It allows the system to adapt itself to individual users’ behavior and restrict access to content accordingly.
Swiss newspaper Neue Zürcher Zeitung’s (NZZ) conversion rate has grown five-fold in the last three years with a paywall that is personalized to reader behavior. The publisher uses reader data to tailor its messaging, text, placement, timing and even the color of its pay prompts.
If we’re to be successful in paid content, we need to individualize the experience with our product and the product itself and automate out marketing approach. Based on that hypothesis, this approach will increase engagement, retention and conversion rate.Steven Neubauer, Managing Director of NZZ
The Economist has had a paywall for two decades. It has evolved over the years to allow various levels of access. The publisher’s recent lowering of the number of articles available for free was undertaken after finding that on average people either read five articles before subscribing, or they signed up right away. There was also the possibility that more free articles may allow potential subscribers to slip through without ever hitting a paywall.
Marina Haydn, Managing Director of Global Circulation at The Economist said, “This approach has enabled us to do both: be a little more efficient on the subscription conversion while ensuring key placements like leaderboards still receive equal exposure.”
“Optimizes audience and traffic and maximizes revenue potential”
New York Magazine also uses a data-focused paywall strategy to identify people who are most likely to subscribe. It then tailors content access according to their behavior. New York Media’s GM of Consumer Revenue and Audience Development, Jason Sylva said that such a paywall, “Optimizes your audience and traffic and maximizes revenue potential.”
A paywall product is really a personalization product.Jason Sylva, GM of Consumer Revenue and Audience Development, New York Media
He did not share details about rules and articles limits followed by their paywall. But said that his team analyzes reader data and continues to modify and tweak paywall rules based on factors like coverage of specific events or seasonal interest in topics.
New York’s product and data teams monitor the behavior of audience segments and their progress toward subscription goals. The publisher also has a digital retention expert, who focuses on ensuring that subscribers get enough out of the product. Sylva says, “The real challenge is to consistently deliver value to those people to make sure they never leave.”
Download WNIP’s comprehensive report—50 Ways to Make Media Pay—an essential read for publishers looking at the multiple revenue opportunities available, whether it’s to reach new audiences or double down on existing super-users. The report is free and can be downloaded here.