It’s Time to Establish Value, Not Paywalls
An April report from the World Economic Forum, “Understanding Value in Media,” states that the proportion of people saying they would be willing to pay for media in the future is on the rise. The WEF found that, for news, 53% of respondents said they would be willing to pay in the future, versus the 16% who pay today. Perhaps even more relevant for publishers, 35% of respondents agreed that they should be responsible for paying for – or funding access to – news.
This is highly encouraging for an industry that today finds itself in a full-blown crisis, hampered not only by the continued decline in traditional advertising revenues, but also by a series of blows caused by the COVID-19 coronavirus, including heavy staff layoffs. With many publishers having previously relaxed their paywalls for essential news stories, and others exploring ways to make up their revenue shortfall by implementing new subscription programs, a populace that is willing to pay for content – and indeed feels it’s their duty to do so – sounds like a much-needed boon.
Unfortunately, the report goes on to say:
“For unengaged consumers without active registrations for media services, there is limited revenue opportunity. This group is willing to pay only a fraction of the fees currently paid by subscribers.” Ouch!
So the WEF appears to be suggesting that occasional readers who are not already registered or engaged with a publication will be unwilling to pay the high prices charged for news subscriptions. In other words, just because new readers have come to your site to read your coronavirus content, it doesn’t mean that they’re going to stick around and subscribe as the paywalls get tightened once more.
This shouldn’t really come as much of a surprise, given the unique situation we find ourselves in with COVID-19. Just because publishers have seen traffic to their sites increasing (although Nieman Lab argues that this ‘bump’ has now diminished), it doesn’t mean that those visitors will translate into increased subscriptions, particularly if paywalls are the only approach they’re taking.
Instead, consider the following:
1. Everyone’s Counting Their Pennies
Perhaps the most fundamental issue with expecting people to pay for subscriptions right now is the fact that, after their health, the second biggest concern on everyone’s minds is their financial well-being. With unprecedented numbers out of work, and an end to the crisis not immediately in sight, everyone is looking for ways to save money and cut back, not to spend more.
Against that background, is it honestly realistic to expect audiences to be happy and eager to invest in “yet another subscription?” It’s much more likely that people will instead limit their expenses. They’ll still spend money on media, but they will be much smarter – and more particular – about what they buy.
2. Streaming Is King During Lockdown
Talking about ‘essentials,’ Disney Plus announced this month that it has already signed up more than 50 million subscribers, and it’s no surprise that streaming services like Disney and Netflix are doing very well during the times of social distancing and limited entertainment options. After all, they literally have a captive audience that is desperately seeking distraction – so if there’s one subscription users will go for, it’s entertainment.
Now remember 2019’s seminal Reuters Institute Digital News Report, which noted that publishers would increasingly need to compete for consumers’ dollars with music and film platforms. Disney is solidifying the value of its subscription service during the lockdown, and it’s getting new subscribers every day. The publishing industry, in contrast, is giving content away for free, and that’s a direction that’s hard to change.
3. Readers Are Used to Getting Content for Free
People with a profound understanding of the media, like Twitter’s co-founder Biz Stone, were calling for paywalls to be relaxed during the early days of the pandemic. And in the U.S. at least, some publications have indeed loosened – or removed altogether – their paywalls. This has led in part to increased website traffic and, yes, more reader engagement. But it is unrealistic to expect that those visitors will all remain once the paid options are reinstated. Instead, audiences have gotten a taste of being able to access the content they want, whenever they want it without being required to register or pay, and they’re more likely to resent the shift back to the paid model.
Visual Capitalist, in their excellent summary of how COVID-19 has impacted media consumption, paints a similar picture. In a nutshell, heavy percentages of users would rather not subscribe at all, and the overwhelming majority of those who do pick entertainment over news.
The simple fact is that, even after the coronavirus urgency abates, people are going to continue to need immediate access to quality content and information, and paywalls make that harder, not easier. Paywalls, after all, force readers into accepting a subscription model or they are not allowed to access any of the content they prefer. Paywalls are a missed chance to establish and nurture value because they fail to intensify a relationship with the user.
People expect to access the content they want, when they want it – something that relaxing paywalls has made possible for many readers. So we shouldn’t be making it harder for people to consume content, we should be making it easier. From our perspective, that means taking one – or several – of the following approaches:
- Ask for voluntary contributions. Loyal readers are exactly the target group that should continue to have access to great information and relevant news, even during these difficult times. But despite it being considered a publisher’s ‘duty’ to provide them information – without the necessity for a subscription – the media still needs to make a living as well! So give loyal readers the chance to contribute directly. It’s an opportunity for readers to thank or reward a publication, and to demonstrate their appreciation for the quality content it provides. At LaterPay, since the pandemic hit the US, we’ve seen a 400% increase in contributions to those partners who have integrated a call for support into their websites and other channels.
- Focus on user-centric paid content offerings. 53% of respondents to the WEF’s report may have expressed willingness to pay for news, but that didn’t mean they would all be willing to subscribe. Instead, publishers need to offer fast, seamless options at a lower price point, but aimed at what the reader actually wants. Someone who occasionally browses a site won’t subscribe, no matter what the publisher does, but they may be inclined to buy an individual article if it is an effortless process. More frequent users may be inclined to buy a day, a week, or a month of access if the content entices them.
- Consider the article of one. This is something I’ve talked about before, but we continue to see value – particularly now – in allowing people to read individual articles that interest them and allowing them to pay just for that article, instead of subscribing for a month. Let users buy just one video, one article, one ad-free podcast, one class/tutorial, or an hour of just reading about whatever is of interest to them, whether that's the coronavirus, politics, or Tiger King. Give them easy and reasonably priced access to small volumes of content that they actually want to consume. In this way, publishers inform their readers and also establish value, so even people who are currently cash-constrained can afford to consume this media.
The COVID-19 crisis is possibly publishing’s biggest chance to establish value by giving people paid access to the one unit that counts for them. Small increments that establish value and increase the propensity for them to become buying customers in the mid- and long-term. Otherwise, users may feel pressed into subscriptions, and once this crisis is over, the awakening for those who tried to force users into subscriptions will be a painful one. The winners will be those publishers who establish value by finding the right balance between giving people access to the highest quality content they can offer while monetizing it in a simple and user-centric way.
Related story: 10 Questions for Magazine Publishers in Survival Mode
Cosmin Ene is the founder and CEO of LaterPay, a payments and technology company with offices in the US and Germany. Under Cosmin’s leadership, LaterPay has become the monetization standard for local publishers in Germany with over 200 clients, and has expanded to the US market.