Early adopters of new online payment platform leaning toward metered, segmented options

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Journalism Online has christened its e-commerce service for publishers “Press+” (reschristening its brand as well) and has begun to release more details about the online payment system, which enables publishers to implement a variety of payment methods for digital content. Gordon Crovitz, a Journalism Online co-founder and a former publisher of the Wall Street Journal, agreed to answer questions via e-mail about the company’s progress. 

eMediaVitals: Any update on the number of media clients you’re working with? How many systems have you actually installed?

Gordon Crovitz: Publishers representing over 1,350 publications have signed letters of intent with us, and that number is growing every day. Most of those publishers are working with us to explore different models for paid access that will work on their websites. A smaller number of publishers, who are our early beta testers, have  already received our software and are integrating it with their websites and CMS systems. We expect several publishers to launch live, consumer-facing products this winter. But it is up to each publisher to decide when the time is right.

How is the “engine” actually implemented – is it an application that sits on a server? Do you host it for the client?

Crovitz: We host the engine for the client on the back end and handle every layer of the e-commerce process, but the user sees it exclusively on the publisher’s website. We do not aggregate our affiliates’ content on a competing destination site for users. Instead we empower our affiliates to sell their own content to their own users on their own websites – a key element in retaining the important direct relationship between publishers and readers.

Is there a base implementation fee for your system, or do you just take a cut of the online revenue it generates? If a company installs your system then decides not to charge for content, do you still get a fee?

Crovitz: There is a nominal set-up fee paid at the point of actual implementation, but beyond that there is no upfront cost. Our profit model is based entirely on a revenue share of incremental revenues; we do not charge technology fees or maintenance fees; there are no hidden charges.

How are you educating clients about which Reader Revenue Platform services they should test? What’s the decision-making process they should go through to determine the best place to start?

Crovitz: We start by analyzing the affiliate’s site for existing traffic and type of content to try to identify what distinguishes the most engaged users from the casual ones. Based on that analysis we help publishers create models that we believe will be most effective – but ultimately the affiliate has complete control over the product and the pricing.

How many of the 16 Reader Revenue Platform services are available for testing at this time?

Crovitz: We are starting with the key approaches that our affiliates have requested, which include the metered approach (charging only after a reader has accessed a certain number of pages per month) and the segmented approach (only certain categories of content require payment). Other approaches that our affiliates will launch include charging differently based on geo-targeting – that is, based on where the reader is based – and also charging for premium access such as to message boards available only to subscribers.

Do you have any type of formula that you use to help clients determine the impact of these paid options on site traffic, and how to manage the tradeoff between lost advertising revenue vs. new content revenue?

Crovitz: We encourage publishers to wade slowly into the paid-content pool – rather than diving straight into the deep end – by beginning with conservative approaches that don’t put many page views at risk. For instance, a publisher employing a metered model might begin by allowing users to see 20 articles for free before being asked to pay. Since few readers would be challenged in that case, the publisher would likely lose very little traffic. By beginning conservatively and steadily testing lower thresholds, the publisher would find the optimal model for ‘freemium’ access.

It’s important to remember that even publishers who lose 10 to 15 percent of their page views often see a disproportionately small drop-off in advertising revenue because their sell-through rates for online advertising inventory are much lower than 85 to 90 percent. Moreover, paid subscribers tend to view more page views per month than non-subscribers, and advertising rates tend to be higher on pages viewed by subscribers. As a result, deploying a paid content strategy can have little to no negative effect on online advertising revenues.

Do you have a sense of which pay models are likely to be more successful than others? What is your experience to this point telling you?

Crovitz: The models that most interest our affiliates at this point are combinations of segmented and metered access – that is, a certain number of articles are free to each user per month and only certain content is included in that count. But we also see significant potential in geographic models – that is, charging out-of-market users differently – and for different types of content.

Besides revenue, what metrics do you track to help customers determine how the service they’ve implemented is performing?

Crovitz: We pay attention to the behavior of users as they interact with our platform, including which products consumers are buying, which content subscribers are viewing most, and which approaches are most effective at converting free readers into subscribers. We’ll be sharing that information, in an aggregated and anonymous way, to all of our affiliates in the form of industry-trend reports.

Will media companies need new skill sets, technical or otherwise, to manage Press+?

Crovitz: In most cases they will not. Our platform is simple, flexible, and easy to integrate with most CMS systems in the market. We work with publishers during the integration phase, and beyond that, the system handles all aspects of the e-commerce – from defining products to processing payments to reporting data.

How well does the software integrate with other payment, fulfillment or subscription management systems that a customer may have in place?

Crovitz: One of the capabilities that separates our platform from other e-commerce options is that it is targeted directly to publishers – and as a result, we’ve built it in a way that makes integration print subscriber databases and existing online accounts seamless and simple. Several of our beta test affiliates are offering bundled subscriptions to their print and online editions, offering a steep discount on Web access to their print subscribers. Others are offering print subscribers special features on the site, such as access to coupon pages and enhanced commenting privileges.

How do media companies need to start thinking differently about paid content?

Crovitz: First and foremost, publishers must stop thinking of paid content as an either-or proposition. Rather than choosing between completely free access and full pay walls, our technology enables publishers to convert their most engaged readers to paid online subscribers without bothering casual visitors. This hybrid approach is key to finding the optimal mix of traffic and subscription revenue online.

At the same time, hybrid models alone will not help publishers who cannot offer their readers something of value. As they look for ways to monetize their existing content, publishers need to examine their operations from the ground up and to better serve their readers online. 

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