How Google Could Help Attract Paywall Subscribers (it’s a bit of a leap)

Micropayments and digital media haven’t exactly enjoyed a happy relationship so far, and this is a bit of a travesty according to Greg Golebiewski.

Who is Golebiewski? You might not be surprised to learn he is the CEO of a micropayment provider, Znak It. So his argument is a little self-serving, but still valuable. In the age of newspaper paywalls, Golebiewski  tells Paid Content newspaper publishers are missing a trick with not using micropayments to, say, offer a single article for a few pence to entice new readers. One of the schools of thought around paywalls is they’re not half bad for monetising online readers, but sub-par when it comes to growing a reader/subscriber base.

Says Golebiewski, “it’s extremely difficult to break that notion, the theory that micropayments don’t sell. [Critics] don’t have any data… it’s very difficult to go to them and say we have a flexible system for payments and then when they figure out it’s micropayments, they stop listening.”

Speaking of data, Znak It has some to back-up the CEO’s enthusiasm for micropayments. The company ran five pilot projects to see how many participants would buy a range of digital content; videos, music and written. Some 1,281 “buyers” emerged from a total of 43,000 unique users. According to Paid Content, “as many as 5 percent of the unique users wound up becoming buyers (paywalls usually get about one percent conversion).”

Znak It whitepaper

So what’s going to get micropayments into the mainstream? Google/YouTube might be the answer. Stick with me.

Google’s online video behemoth has been linked to the idea of a subscription model service, supplementing the traditional ad-revenues, for quite some time. Fresh rumours emerged in this weekend’s FT, with a report declaring “Google is on the verge of unveiling an à la carte subscription service for some of YouTube’s specialist video channels” (alternative info here for those sans an FT sub).

YouTube

“A la carte subscription service” is a little vague, as rumours tend to be, but the article goes on to say users could subscribe to channels “as little as $1.99 a month”. I guess that’s a la carte in the sense you pick a channel to subscribe to, rather than ‘subscribing to YouTube’. Whatever the specifics, this isn’t a million miles away from a micropayments system. True you’ll be subscribing to an entire channel rather than a single video, but chances are it’s a single video that will be the trigger to purchase in the first place – so not so far from buying one newspaper article through micropayment. The relatively low cost is another similarity.

The new system, combined with the prevalence of YouTube, could bring the concept of micropayments to a mass user base. It’s simplistic thinking, but it’s a start – and not the first time a big technology company has kick-started a digital content payment trend. How many people would have spent a few quid on a small software program for their mobile in 2006?

It could happen. Bit ironic potentially too – if Google ends up helping newspaper publishers develop a revenue stream from micropayments, after the ‘evil’ Internet got them into this fine mess in the first place.

FT vs Guardian: The Ongoing Paywall Debate

The Financial Times has been held up as something of a pioneering newspaper, but its latest digital expansion comes at cost to the print.

The paper has done a good job of adapting to the digital world, attracting large numbers of paying subscribers to both print and online. It’s usually the default pro-paywall example; although with the note its content has the advantage of being unique enough to attract paying readers.

FT guardian paywall

Long standing editor Lionel Barber announced on Monday a renewed focus on digital, and is hiring 10 new employees specifically under a digital remit. The knock-on effect is 35 current FT staffers face the chop – or more accurately being offered a ‘buyout’ according to Paid Content. 35 of these buyouts will save the paper £1.6m this year, according to an internal email sent yesterday.

Barber says “The intention is to reduce the cost of producing the newspaper and give us the flexibility to invest more online”. There’s also a mandate to focus more on “priority stories”, an streamlined international presence and new products in the coming year.

Interestingly, Barber sees less competition with rival papers and more with social media channels, “Our common cause is to secure the FT’s future in an increasingly competitive market, where old titles are being routinely disrupted by new entrants such as Google and LinkedIn and Twitter.”

On the surface it may look like hard number crunching (+10 -35 isn’t tough maths), but these are the hard calls publishers and editors are being forced to make in the digital world. Ultimately is does mean we’re looking at smaller editorial teams, but it also means more focused teams delivering the content readers want to consume and pay for. What Mr Spock might have called ‘the needs of the many’. Although there’s no way around the fact it’s tough times for the 35 potential buyouters.

At the sometime Barber was tapping out his email, Andrew Miller, CEO of Guardian Media, has reaffirmed the group’s commitment to “open journalism” and shunning of the paywall model. Miller is one who has argued the FT’s paywall works because subscribers were always willing to pay for the premium business and financial content – something his paper can’t match. In an article with The Economist last week, he wrote:

“The overriding business task is to monetize the online audience…when we talk of ‘audience’ we still mean our readers…newspapers have always used a blend of different funding mechanisms to extract revenues for their ‘product’. That’s why I am unconvinced by those who say that the only model that works is to build paywalls. This is not an area where one size fits all.

“In some news organisations where growth in readership may not be so important and in particular where there is a strong existing print subscriber base to build on, a pure paywall may make excellent business sense. The Economist and perhaps the Times spring to mind here. It also makes sense in other publications which feature business-critical information – for example, the Financial Times and, in the Australian context, the AFR.”

In short, the FT et al can afford to monetise content and focus on digital because they don’t have to worry about growing their readership – but The Guardian does.

So where The Guardian is competing with paid-for titles and grabbing readers wherever it can, even in Australia now, the FT is more concerned about monitising content and developing a profitable digital business. The idea of “open journalism” is a noble one, and one I hope works out in the long term. But for now, it seems making the tough calls is the better option for newspapers looking for a firm foothold in digital.

Paid Content: All you need is love…and tablets…and smartphones

Paid-for news content is having a tough old time in the Internet age. Us readers are so used to getting news for free that even the lowest cost news and online content is shunned in favour of free site. According to two separate reports, from Forrester and the Columbia/Indiana University, there are two lifelines for news content – the rise of tablets and smartphones and…umm…’love’.

Easy one first. Analyst house Forrester has released its predictions for potential grown in the paid content market in the coming years. It’s being driven by the increasing number of smartphones and tablets out there. The firm predicts the market for music, games, film, TV and news content will grow by 65% by 2017 – bringing it to a total of £8bn. ‘Digital news’ specifically is expected to shoot up to almost £250m, a 77% increase in spending from us consumers.

Which all sounds like good news for those news outlets with paywalls erected around their content – the FT, The Times and New York Times and so on.

Forrester states the change will be driven by the appeal of new services available on cutting edge tech, although how this relates to news specifically isn’t clear. Forrester’s own Darika Ahrens says “Demand among European Internet users willing to pay for digital content grew between 2009 and 2010, but the number of online buyers didn’t due to a lack of compelling service offerings.”

So we need some more compelling services. And also a bit of ‘love’. That’s according to a study from  Columbia/Indiana University titled ‘Paying for What Was Free: Lessons from the New York Times Paywall’.

As the name suggests, the study examined New York Times reader habits and motivations for paying for the paper’s content post-paywall. The 954 participants were shown two “justification paragraphs” that explained why the New York Times had opted for a paywall model.

One focused on the publisher making a profile from editorial, while the other emphasised the charge was needed to avoid the paper going out of business. The respondents were then asked to rate “how the information changed their support for the paywall and their willingness to pay”. By far and away, they were more likely to pay when facing up to the prospect of the paper closing.  Sadly, according to Paid Content, guilt is “not a guaranteed way to get readers to pay”, as most readers chose not to pay at all, regardless of the statement they read.

There are a few bright spots in the paid content space, but it’s a long slog toward a healthy, stable and profitable market. Love and smartphones are not enough.

What The Times’ new paywall update means for PRs

It’s emerged this week The Times newspaper is backtracking ever so slightly on its paywall policy. It really is ‘ever so slightly’, two sentences at a time.

the times paywall

When The Times’ paywall shot up in May 2010 it was unique. Unique because it completely closed off all access to the site’s editorial content for non-subscribers. This contrasted harshly with other paywalls that allowed readers to view a select number of articles or at least read the headline and first paragraph, notably the FT but other trade and specialist titles too.

Now the News Corp owned paper has backtracked. Google, Bing and any other search engine’s crawlers will be able to grab the first two sentences the paper’s editorial articles and index them alongside freely accessible sites. The update should happen next month, says The Telegraph.

Paid Content rightly suggests this is an effort to market the paper to new customers, having reached over 130,000 paying subscribers since the paywall went up. Ignoring the “drive by traffic” has been at the heart of The Times’ strategy, and it’s nice to know the paper’s digital team are willing to reassess their position a few years in.

But what does this mean for PRs?

When the paywall first went up I had a few questions over the value of the paper for PRs, effectively weighing the worth of reaching a fledgling but well targeted audience with a wider, more causal readership. There were also questions of exclusive stories with a site paywalled up to the eyeballs, and generally how monitoring would be tougher for PRs.

The latest update means it is work revisiting these topics:

  • Exclusives: well it seems you can have your cake and eat it too. Or other clichés. From a PR perspective, The Times is much more appealing for an exclusive story with a few bricks knocked out of the paywall. Your story will now get to the national broadsheet readers who are arguably far more engaged than the legions of causal readers hitting guardian.co.uk and telegraph.co.uk everyday. If you’re looking after a brand whose name won’t grab attention in headlines, this is even more appealing.
  • Monitoring: this will get a whole lot easier, especially for anyone scanning nationals for client and industry coverage to compile a morning news scan. If there’s a big story picked up by other nationals, I’ll bet my Gorkana log-in few PRs have included a Times article in news scans over the last two years. You’re just so much more likely to find it somewhere else first. Presumably the update means Times content will be included in Google Alerts too, but Paid Content confirmed monitoring services such as Meltwater are still off the cards. The downside is any client without a sub won’t be able to read the entire article in their scan, but at least The Times will be back on the radar. Which leads us to…
  • Influence vs exposure: this makes me wonder if Times writers have become less influential than their counterparts at other papers, whose stories are freely viewable by PRs, analysts, clients and…everyone. Does lack of exposure mean less influence? It’s not impossible, but if it’s the case the new paywall could reverse this process. Of course the majority of Times’ writers can be followed on Twitter, and the editorial team haven’t been hidden away in a cupboard since 2010. Some of them started a Tumblr.

@simonhill

UK Readers: ‘We love online news…as long as it is celeb gossip… on our iPads…and we don’t have to pay’

The Reuters Institute Digital News Report has revealed there’s something of a mix future for online news journalism and paid content.

Three-quarters of Brits read news everyday – which is low

According to the survey findings, based on a poll of 6,000 people from the UK, US, Germany, France and Denmark (so when I say ‘rest of the world’ that’s sort of not at all true), around three quarters of us Brits access news every day. ‘Access news’ meaning either watching TV, listening to radio, reading it online or in good old fashioned inky finger newspapers.

Not a bad stat, but compared to the Germans we’re lagging behind. 90% of our Deutschland friends are accessing news on a daily basis. We’re also lagging behind the Denmark, the US and France.

Daily access of news online by country, Reuters

Source: Reuters, via BBC News Online

Celebs vs politicians

But maybe it’s about the quality of news read, rather than quantity? Actually, no.

According to the BBC’s abridged reporting of the survey, us Brits are far more into celeb news (that is gossip, film and music) than political news. 21% of readers in the UK are hungry for celeb-centric stories, compared to 16% in the US, 14% in France and Germany and a miniscule 9% in Denmark (although to be far, I can’t name a Danish celeb).

The BBC attributes (blames) this on sites like Mail Online, Holy Moly and Female First.

In comparison, 37% of UK readers were interested in political news. This sounds good, until you compared it to the US’s 63%.

Future is bright for online journalism and the social media savvy

The upside to this, from the future of journalism perspective, is UK users are more likely to find news online than anywhere else – 82% of those snap-shotted in the survey had read online news in the last week.

More good news for online comes in the social media usage and discovery stats. On average, 20% of readers are now likely to find a story through social media sites (Facebook and Twitter named specifically). For younger readers, those tweet posting / status updating whipper-snappers, this goes up to a whopping 43%. More exciting still, social media collectively surpasses search engines as a source – take that Google News.

Mixed results for paid content

Sadly, one of the lowest numbers in the entire report is the percentage of UK readers willing to pay for news online: just 4%. It’s not much better elsewhere, the highest figure came from Denmark and barely broke into double figures at 12%.

Its better news for those who’ve looked into a tablet app as well as a website – 21% of tablet owners have paid for news. As always this is always a slightly skewed statistic. Tablet owners tend to be at the upper end of the affluent scale, so have more dosh to splash on digital content. I’m not sure Mail Online readers will be queuing up to pay for a tablet app ticker of celebs posing at the Wimbledon final. Never say never though.

So while there’s money to be made and online eyeballs to be grabbed, the ball is still in the media innovators’ corner to secure the future value of news journalism. The full report can be read for free online here.

@simonhill