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A renaissance of pricing model initiatives

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We appear to be in the thick of a renaissance of pricing model initiatives. The free online content versus the paywall debate continues, as ever, apace. But for some time now the pendulum has been swinging in the direction of some of sort of payment being asked of users who access more than a set amount of articles online. We may have now reached some sort of tipping point.

Quite a few publishers are experimenting, or will experiment as we move into spring, with multiple tiers of access. Google One Pass, which is right now limited to online newspaper and magazine, is gaining ground as a necessary counterbalance against Apple's controversial subscription service. And Politico Pro was also recently announced.

Further, Sharon Waxman reports in The Cut that Variety is stepping out from behind the paywall -- one that has been questionably effective -- next Tuesday to unveil a free breaking news blog. "The move to launch a blog, to be mainly written by the trade’s new film editor Josh Dickey with film reporters Justin Kroll and Jeff Sneider, suggests that the trade recognizes it needs to offer some free content to stay relevant," writes Waxman. Three months after their paywall was erected, Variety's traffic had fallen by more than 40%.

The Telegraph is also looking at a softer gate approach aimed at frequent consumers of their content. According to ABCe, Telegraph.co.uk had 31 million registered users in December. "While (Telegraph Media Group) insists that no final decision has been made, sources claim that executives believe the hybrid model is the best way to offset falling sales of the company's printed newspaper editions," reports the UK based Marketing Magazine. It all sounds positively FT-ish.

The Financial Times is, of course, the best-in-show. FT has 206,892 paying digital subscribers, up 71% year on year, according to a January blog post. But financial news is a little different from other types of content in that it is vital, thus paying for itself. Subscription-based Times Select -- which was heavy on Op Ed columnists -- infamously, did not get things right out of the gate, but will be giving it another honest try in the coming weeks with their "softer gate (modeled, incidentally, on the FT approach)." The Gray Lady's second iteration at a paid content model is rumored to be $20 for a digital bundle including app access and the Times online. The Times has built enough trust over its storied 160 year history to recover from Times Select.

Incidentally, The Atlantic's John Hendel, in writing about the Times' upcoming paywall, brings up the two year old Kachingle. Kachingle is all about voluntary micropayments. Kachingle, firmly in the anti-paywall camp, was particularly aggressive in their "Stop the Paywall" campaign and found themselves in a lawsuit -- recently settled -- against the New York Times.

Finally, while the present frenzy of experimentation is exciting, publishers should ask themselves some serious questions before establishing anything that carries even the faintest whiff of an out of whack print/online pricing plan. Newsday's epic paywall fail of 2010, which garnered only 35 customers in its first three months, should serve as the ultimate cautionary tale on how not to do a paywall.

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Anonymous on December 31, 1969
Wishing all paywals gone is a non-starter. It is also short-sighted. And the case of the Financial Times is as good a place as any to see why.What's the Financial Times' main tmcpeoition? The Wall Street Journal. Both are behind paywalls. Both address an affluent customer base that relies on the information in their day-to-day jobs. (Which means they can deduct subscriptions as business expenses.) Neither relies on eyeball traffic because as specialist publications they offer easily identifiable value and authority in their content. They're not just shoveling out Reuters' and AP reports with minimal reformatting.In other words, they earn their keep.And they earn their keep because the people who need the content understand that without the paywall fees the content would not be there at all: useful financial and business news doesn't just rain down from the heavens in preformatted AP feeds. A lot of it comes from expensive proprietary sources. It is also the kind of content that doesn't draw enough eyeballs to survive off banner ads.People *will* pay for content worth paying for.But they will *only* pay for worthwhile content; just putting up a paywall around content available elsewhere isn't going to achieve much as the Murdochs are discovering.Another paywall-site worth discussing that you never hear any talk about is ESPN's INSIDER. It's US$40 a year, not tax-deductible, been around for ages, and includes a subscription to ESPN's print mag (whether you want it or not) which launched *after* INSIDER had been around awhile. (Probably to level the playing Field with their magazine-based competitors.) Nobody is rallying the peasants to storm ESPN HQ over *their* paywall. Because ESPN customers understand that, like everything else in business and tech (c.f; DRM), paywalls are neither inherently good nor evil.Pretending otherwise is naive or disingenuous; they can *enable* products that could not exist without them (Library ebook lending without DRM? Really? Not on this planet. That's barely doable *with* DRM. Look at MacMillan's refusal to allow it.) The bulk of ESPN's business resides behind the paywalls of cable TV fees (and XBOX LIVE Gold); expecting them to offer-up the same content on the net for eyeball traffic only would be asking them to commit financial suicide. For them, paywalling a portion of their content (the part *not* available anywhere else) enables them to maintain and offer the rest openly relying solely on web-adds to pay the freight. Without INSIDER fees, there likely wouldn't a content-rich ESPN.COM.Other publications also follow this dual-tier paywall model; off the top of my head, I can name SCIENCE NEWS, THE ECONOMIST, SCIENTIFIC AMERICAN All come from the print world and offer up full online content free to print subscribers that is segregated from their free-to-all-comers website. It's a balancing act that works; you don't see much whining over *their* paywalls.We all like free stuff, but There Is No Such Thing As a Free Lunch; everything has a price. And sometimes the price of free is not having it at all. Paying customers understand this; they understand that direct payments are what enable that particular operation to exist at all. Paywalls serve a purpose when used properly. The Murdochs of the world may not understand the rules that define properly yet but the customers do. The borders of their paywalls need adjusting as they realize charging for everything that used to be free isn't going to get them anywhere. Eventually they'll sit down and figure out what their customers will be willing to directly pay for (in cold hard cash) and what is only worth indirect, eyeball-based payment. Their current policy is merely stupid, not evil.Give it time and they'll get it. Just don't expect them to give up on the paywall completely. Paywalls are here to stay. If anything, judging by the success of content sales in the Apple iPXXX ecosystem, paywalls are a growth business. And given that Apple disallows subscription, that growth is going to come at full list price.Now *that* is a development worth griping over.
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