The new rules of paid content
Just five years ago, it was hard to find a publisher that was charging for online content. You could count the success stories on one hand—the Wall Street Journal, Consumer Reports, and a few others had persuaded readers to buy subscriptions for digital access. Most publishers didn’t even try, because they thought people wouldn’t pay for information on the web.
How times change. Today, almost every week you hear about yet another title that is charging for access—either by putting a “paywall” around existing online or mobile content, or by launching a new content feed that requires a subscription.
The rush to paid content (by which we mean revenue from readers, not “paid content marketing,” which is totally different) is easy to understand. Publishers who used to rely on advertising have seen those revenues fall as CPMs are battered by pressure from search, social and clickbait sites and the rise of programmatic sales. Even those who managed to hold up their ad rates complain about the fickleness of the market.
Against that backdrop, a steady stream of reader revenue looks pretty attractive. “Advertisers drop in and out, but our subscriptions are annual deals so we have much better visibility,” says Elisabeth DeMarse, Chairman and CEO of The Street, where revenues (excluding acquisitions) are up 25 per cent since the company focused on subscription growth in 2012. “It’s just a much better business model.”
But making digital subscriptions work is harder than just slapping up a paywall. The field is evolving so rapidly that you’ll face a series of decisions—about payment models, back-end systems and even corporate culture—that are critical to success.
To help your company make these choices well, Folio: talked to seven leading publishers—TheStreet, ALM, Politico, and others—that have all implemented paid content. Each followed a different route, and some have had more success than others. But by studying their collective experiences, we distilled six important guidelines for success today—our New Rules for Paid Content.
Those rules follow, along with examples of each and detailed case studies of two companies—ALM and Politico—that deserve a closer look.
1. Choose the right payment models
Note especially that word “models.” What’s new here is that the word is plural, not singular, because nearly every successful company today uses a mix of payment models rather than a one-size-fits-all approach.
At ALM, for example, most content is covered by a “metered” paywall that allows five free articles a month. But the popular Supreme Court Briefs are tucked behind a “hard” paywall that requires immediate payment, while other content is always free. The Street, on the other hand, uses mainly hard paywalls, but in May switched to an eight-story-a-month meter for Jim Cramer’s popular Real Money e-newsletter. And Time Inc., whose websites had previously been mostly free, dropped a meter on the Entertainment Weekly site that same month, despite the widespread industry belief that people won’t read entertainment news unless it’s free.
Multiple models are important because they allow you to accommodate different content types, customers and channels. Publishers typically choose a meter for daily, newsy content, especially when the content used to be free. People subscribe not because the stories are exclusive—with newsy content, the same topics are often covered elsewhere—but because they like the title’s accuracy, timeliness, depth, voice or other distinguishing feature. A meter has the advantage that readers can still share links freely over social media. And depending on where your meter is set—i.e., how many stories you give away free—you can preserve most or all of your ad inventory, since the majority of visitors come only for a few stories and never see the paywall.
With unique or high-value information, on the other hand, publishers usually choose a hard paywall and a “freemium” model, in which there is a generous helping of free content to draw visitors who then become targets for subscription marketing. A hard paywall tends to cut traffic and ad inventory in the paid portions of the site, and discourages social sharing. But publishers can sometimes charge a higher CPM for behind-the-paywall inventory since, after all, visitors are paying for the privilege of being there.
The key point is that it’s increasingly common to see both models, and more, on the same site. At Harvard Business Review (HBR), visitors can read five free articles a month free, or 15 if they register, but the tablet editions are visible only to those who buy a US$99 all-access print and digital bundle (there’s also an $89 bundle without tablets).
HBR’s registration is deliberately minimal. “We take only name and email, because the minute you ask for more, you see steep abandonment,” says Sarah McConville, VP of marketing. And nearly all content—from a simple management tip to an in-depth magazine piece—counts as one “article” in the meter’s tally. That means readers get a broad sample of HBR’s content, and its value, before being prodded to subscribe.
“People ask why we give away so much. It’s because if we build a relationship with our visitors, we sell more subs,” says group publisher Josh Macht. Indeed, since the current system rolled out last fall, HBR has collected 50,000 new registrants a month. And total paid circulation—print plus digital—is up 17 per cent over the past four years to nearly 300,000 today, while many other business titles have struggled to keep from shrinking.
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