Reader Revenue Top Stories
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Intelligent paywall: the “hottest new tool” helping publishers secure sustainable reader revenue

The 2019-2020 Innovation in Media World Report from FIPP and Innovation Media Consulting looks into how publishers have innovated to establish multiple revenue streams. Several of them are no longer dependent on advertising revenue.

Companies that once happily described themselves as magazine businesses are now multi-platform, brand-focused media houses. News investments in marketplaces, e-commerce, digital video, live events, pureplay web, and mobile brands and a range of other products and services, have enabled rapid diversification of income.

James Hewes, President, and CEO, FIPP

The report focuses on the new revenue streams that media companies are increasingly adopting. This makes it a goldmine of innovative ideas that publishers can use for their own businesses.

We take a closer look into how some publishers have innovated with paywalls to grow more subscribers.

Moving beyond “empty measures of success”

John Wilpers, the report’s author, calls the intelligent flexible paywall, the “hottest new tool” that is helping publishers secure, “significant sustainable reader revenue.”

Earlier publishers hesitated to put their content behind paywalls for fear of losing readers, and advertising revenue as well. But now with ad revenue continuing to shrink, many of them are aggressively moving on to grow subscription revenue.

The old reasons to provide content for free—scale and clicks to satisfy advertisers—have been proven to be empty measures of success. The vast majority of those clicks never came back, never clicked on ads, and never subscribed.

FIPP Innovation in Media 2019-2020 World Report

The success that The New York Times and The Washington Post have had with growing subscription revenues have encouraged several other publishers to place a value on their content.

This includes New Yorker, whose Deputy Editor Pam McCarthy told Digiday, “It was scary to think about charging three-figure sums,” she added, “The Times’ success is encouraging, as well as The Washington Post’s growth. The lesson of the past five years has been not to undervalue ourselves.”

Earlier, publishers used one-size-fits-all paywalls that would trigger after someone had read a certain number of articles. Now they are increasingly using artificial intelligence to power their paywalls. It enables the system to adapt itself according to specific users’ behavior and restrict access to content accordingly.

John Wilpers, author of the report, writes, “It’s amazing (mind-boggling, actually) to think that in an era of increasing personalization we ever thought that a one-size-fits-all paywall would work.” He acknowledges that publishers were also learning—“it took time to figure out the algorithms and artificial intelligence tools to make smart flexible paywall work.”

Using “past patterns of engagement” to trigger paywalls

But now it has been proven by several publishers that intelligent, flexible paywalls work very well. The algorithms powered by artificial intelligence learn about a reader’s behavior to deliver a personalized subscription pitch.

The Wall Street Journal spent four years building an intelligent paywall that measures reader activity across 60 variables. The variables include frequency, recency, depth of read, preferred content types and favored devices.

They contribute to calculating the “propensity score” of readers, which is their probability to subscribe. The paywall is adapted according to each reader’s behavior, placing limits on the number of free stories, especially in the areas of their interests.

The Journal’s Analytics Manager, John Wiley told the Drum that an adaptive paywall, “Allows you to pick the threshold based on past patterns of engagement. If there is a certain type of reader who will most likely convert on their fourth visit and another type who most likely converts on the seventh, the model will reflect that.”

Another publisher that’s had significant success with a personalized paywall is the Swiss newspaper, Neue Zürcher Zeitung (NZZ). It has doubled reader revenue as a percent of total revenue (from 30 to 60%) in ten years.

Different paywall customizations for different readers

Like the Journal, NZZ uses many variables to personalize its paywalls for readers, and calculate their propensity scores. It uses 100 to 150 of them, including reading history, time spent on articles, frequency, device, newsletters they receive and the times they visit.

The publisher uses this data to tailor its messaging, text, placement, timing and even the color of the pay prompt readers see. For example, Steven Neubauer, Managing Director of NZZ, says, readers don’t get payment prompts between 5AM and 9AM—they usually commute during this period and would prefer to read rather than enter their payment details.

Some other interesting insights that NZZ has learned while working with the intelligent paywall include—registered users who have not subscribed are more likely to do so when they come across annual, rather than monthly subscription offers. Further, adding personalized greetings to landing pages increased conversion by 25%.

According to the publisher, in the last three years, 2.5% of the people who have seen payment messages have subscribed.

Neubauer told Digiday, “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.” He speaks from experience; NZZ’s conversion rate has grown five-fold in the last three years.

Click here to access the full FIPP Innovation in Media 2019-2020 World Report

Download WNIP’s comprehensive new 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.

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