A view from the paywall
On Thursday I took part in The Media Briefing’s debut event, Paywall Strategies 2011. The day was dedicated to exploring a variety of different approached to paid digital content and assessing the merits, weaknesses and underlying principles of each.
This wasn’t the first such event I’ve been to, and in fact I had heard several of the speakers address the topic before. But this is a fast-moving challenge, and I found that the publishing landscape – and, critically, publishers’ attitudes– had changed a lot since the last time I parachuted in.
Whereas even a year ago there was a definite whiff of denial in the air (who could forget Rupert Murdoch’s certainty that customers would “give you their credit card number, and that’s it”?), attitudes – to customers, the web, content and platforms – are changing.
Both speakers and audience – an assortment of publishers (national and international titles as well as B to B), product specialists, journalists and consultant-types – made no pretense that old business models still apply. Several speakers talked about embracing disruption – cue nods from the crowd – and when someone quoted Clay Shirky's thoughts on newspaper economics, there rippled through the phalanx of suits a murmur of familiarity. Folks, I am filled with hope at the things this industry is starting to do.
Looking beyond content
One the first speakers was Nick Thomas, an analyst at Forrester. I thought Thomas had some intelligent things to say. He advised people “look beyond the content” and think about the total product experience: that the product they make is just one component of a person’s broader digital experience. The news or information product publishers create must fit into, but not define, a user’s digital experience.
Thomas referred to “revisioning customers as engagers” and I think that’s a critical distinction to make. Whereas we used to subscribe to a publisher’s one-way stream of reportage, we now engage with an evolving ecosystem of information. Publishers are starting to do interesting, useful things with news and data – things people will pay for.
Re-architecting the old value systems
Another theme that resonated with me was around the values we assign things, like content, customers, brands and metrics. As business models change, so must the value systems that govern them. Thomas encouraged the audience to think of audiences, not content, as themonetisable asset. This makes sense: digital revenues won’t offset the impact of declining physical sales, but there could be – and very likely are – ways of making money off the audience your content attracts.
Mike Soutar of ShortList media (the free magazines ShortList and Stylist) has made this value shift, and he shared his freemium model success story.
We’re only seeing growth. There is only opportunity in this space.
ShortList Media gives its content away in free magazines, making money off a broad spread of advertisers. Sites for each magazine launched in September 2010 and are making some revenue, but by and large it is the print advertising that’s driving the business forward.
For Mary Beth Christie of the Financial Times, the value system is less changeable: quality attracts pay. Just as you pay for a pint of milk, so should you pay for opinion and information.
I hate the term paywall... you pay for content.
In the FT’s niche market, true. But it’s not just a case of desperate users with no choice in the matter. Christie spoke with justifiable pride of the way the FT has placed a great deal of value on the way content is delivered to customers. For her – and, arguably, for the FT’s many satisfied customers – the value is in the products and services around content. Alphaville is an example of this: a high-value, paid-for service built around content.
Alongside these success stories were a few tales of failure. Conor Dignam of Emap Inform had the classic example: he took a publication online and made it free,
... then our free sites got so good that people stopped paying for our content.
Different audiences have different needs; different types of content suggest different approaches.
Working in different ways
At the FT, Christie said, product development doesn’t just happen on the product development team. Journalists get involved, too. Collaboration between departments and skill sets has yielded some very successful products, many of which I imagine would never have emerged from a more siloed way of working.
Another process change Christie mentioned was to do with data and metrics. The FT’s journalists have access to the metrics around their content, which helps them understand their audience’s changing relationship with that content. When we’re no longer consuming but engaging with content – and through a variety of products and services – this change makes good sense.
Innovating the way forward
Product innovation was a huge theme, with the majority of speakers coming from the perspective that if you make the experience good enough, customers will pay for it. I don’t disagree. The right product at the right time, and on the right platform or device – for many people (myself included), that kind of convenience is worth paying for.
To engage paying customers, you’ve got to focus on radical product innovation.
Nick Thomas, above, offered the group a little mnemonic to innovate by, and while the idea of a mnemonic makes me giggle, I think the man is on the right track. It's all about products with sparc:
Social
Participative
Accessibe (across various devices)
Relevant
Connected (devices): TV, computer, laptop, phone
I would add to this the importance of making payment as easy as possible: keep the friction to a minimum.
Final comment
The Times went behind a paywall in July 2010. The News of the World followed in October 2010. Revenue and readership figures are still in freefall; to para-quote chair Steve Hewlett, we can see right into the void. But it maybe that’s spurring this change.
At a similar event just under a year ago, there was less talk of platforms and services, and a lot more “content is king” (I know, ugh). It was about total lockdown models, not a spectrum that included metered, freemium, time-limited, subscription and premium models. Another point of contrast was around the digital landscape: last year’s assumption of browser-led usage has been replaced by an awareness of rising mobile usage, connective TVs and second-screen experiences.
Granted, it’s a small sample and a skewed one at that (you’re not going to attend a conference like this one if you *don’t* think you need to change your business model), but my experience on Thursday tells me the publishing industry is not down for the count just yet. The last word goes to Ian Eckert from Abacus:
If Jobs and Schmidt say there’s money to be made out of content, so do we. The thing is, the way we collect that money will be different, also there will be a change in product.
These people know their industry needs to change. I think their willingness to make this happen is reassuring, maybe even inspiring.
Comments more than welcome on this one, especially if you disagree.
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