Craft the experiments

I'm beginning to think that paywalls are the new piracy, fostering debates in which all sides hold strong opinions backed by precious little data. I don't blame folks for having precious little data – it's early yet – but we could probably dial back on the judgement calls.

One recent example: the announced launch of "The Information", a subscription web site that looks to charge its users $399 a year to access content researched, written and curated by a dedicated staff of about five journalists. Depending on where you stand, this idea is bound to succeed, difficult to pull off or bound to fail. These assessments came in the first day of the new venture. Pick the one you like.

The dividing line between unthinking paywall and business-model innovation can be a bit murky. Covering the New York Times' anticipated paywall strategy, Digiday's Josh Sternberg last October wrote that the Wall Street Journal's base subscription ($260 a year) made them paywall "hardliners". At the same time, he praised People magazine for offers that ranged from $112 to $200 a year.

But here's the thing about those hardliners at the Wall Street Journal: they are offering access for about $1 an issue. The People "paywall" charges $2 to $3.80 an issue, depending on the option you pick. Good work if you can get it, but what makes People innovative and the Journal a bunch of hardliners? Maybe there's a psychic price point around $200, but if so, we can always try changing the way that price is expressed.

Admittedly, it's hard to get people to pay for content. At least, it's hard to get people to pay full boat, though the reasons are not always clear. A generation raised on low subscription prices for ad-supported media may well have been taught (by publishers) to devalue content overall.

Writing for GigaOm, Mathew Ingram himself bumps into a variation of this challenge in "Why the New York Times needs to think less about products and more about relationships", a post he wrote about evolving paywall strategies at the paper.

The Times is developing "micro-paywalls around specific topic areas or content verticals such as food, real estate and opinion." Ingram supports the move but not the thinking behind it:

This is all well and good, but one thing made me stop short: namely, the fact that the paper refuses to call what it is doing a “membership” program, but insists on talking about it as a “premium product” offering instead. This is a mistake.

Why is it a mistake? Because personal relationships are what drive an increasing amount of media-related consumption and activity now — not products, but people. This trend has been fueled by social media such as Twitter and Facebook, but it wasn’t created by them. It’s an innate human desire, and (as I’ve argued before) the best pay models take advantage of that desire and build paywalls that are based on readers’ relationships with specific writers.

In effect, Ingram is arguing that the Times should "disaggregate supply", unbundling newspaper content and letting readers choose the relationships they want to pay for. The Times, fearful that too much of a good thing is a bad thing, is moving slowly on the idea that it should unbundle itself.

Membership-driven associations face a similar challenge. Historically, the association value proposition comes from a collective funding of the commons. We all contribute something, and we gain access to a core offering. In some cases, the core offering provides benefits – lobbying, as an example – of value to only a subset of membership.

Few associations are comfortable unbundling the membership offer, much as most cable providers are slow to offer a la carte channel access. Ingram is right to point out that dragging your heels on a market demand for disaggregated content leaves your traditional business vulnerable.

While I'm not convinced that the world is moving to "paywalls that are based on readers’ relationships with specific writers", it clearly is happening already at the margin. Where it ends up is a guess.

In his Digiday post, Sternberg wrote that "The paywall is growing up because it has no choice. Publishing is a hustle these days, and those willing to try and fail will end up ahead." I think that's where we need to be these days … experimenting. Dismissing ideas just out of the gate will certainly lead publishers to miss some good opportunities. At this point, we just need to craft the experiments.

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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