World Association of Newspapers and News Publishers


Paid content models and market perceptions

World News Publishing Focus

World News Publishing Focus
Your Guide to the Changing Media Landscape

Paid content models and market perceptions

“There is a big difference between what many think about paid content potential and reality,” said Waller, who helped launch paid content services at Axel Springer in Germany and is a consultant for Frenemies Consulting.

The reality, he says, is that there are already a number of success stories and many of those are using different paid content models.

In his research, Mr Waller says there are a number of pros for launching paid content services, including:

  • For some publishers, paid content news services will surpass digital advertising revenues in the near future.
  • Paid websites do not undermine app content pricing; in fact, they support it.
  • It allows price increase of print products of 5-9 percent and there is a market potential of 1-8 percent to convert unique visitors to your sites, and
  • It gives publishers a great opportunity to upsell many other products.

Of course there are cons, but mainly it is the paradigm shift in how publishers price, market, package and sell their products that looms large.

There are two types of customers in this realm: subscribers and pay-per-use customers. Mr Waller says newspapers publishers should know that if a user is not visiting their sites at least 20 times per month, they are likely not to subscribe to their content.

Here are today’s present models and success examples of each:

  • Free: Using the BILD newspaper from Axel Springer in Germany, he said this is a classic example of a national newspaper dominating a market, therefore the paper can afford to offer content for free because advertisers must follow the huge traffic to its content and products. “But this model is not sustainable, I think, if you are not dominating your market or are a regional publisher,” he says.
  • Metered: Of course The New York Times has set the standard for this model allowing subscribers to read a set number of articles once they subscribe before entering the “paywall.” Mr Waller says there is no arguing the fact that NYT has been quite successful so far gaining nearly 454,000 subscribers.
  • Freemium: “This is when you want your customer to come into the restaurant and smell the food and hope they want to try the exquisite dishes passing by them.” The Hamburger Abendblatt in Hamburg, Germany, Springer’s first regional title to test the waters, has outperformed its competitor, Morgenpost, by 88 percent since launching its subscription model.
  • Hard Paywall: The Times of London is the pacesetter here and while they have lost significant traffic to its site, it has converted 25 percent of its print subscribers to digital subscriptions and managed to double the pricing for its print editions. “It might be a bit ‘hard’, but it is succeeding so far.”

Overall, he says Axel Springer is indeed a good example of a premium paid model as it has acquired 190,000 customers in just two years. “This implies that by 2015 they will have 571,000 subscribers to their services. That’s huge and it will probably happen.”

Author

Dean Roper's picture

Dean Roper

Date

2012-04-17 12:22

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