Investments by media companies in the implementation of pay barriers and subscription models have increased significantly in recent years. For most publishers, however, this was unfortunately not a proactive decision, but a reaction to declining advertising revenues and subscriber numbers. Which trends are showing signs of success? And how soft must the wall be so as not to offend the user?
Before the content is delivered, you must login. It was that simple. However, this approach of a hard paywall is barely being followed anymore, for good reason. The reader simply goes elsewhere, and the hoped-for customer loyalty never happens. You must own a very strong corporate identity and media brand in order to enforce the hard paywall. And not everyone is the New York Times or the Wall Street Journal.
Which types of paywall have emerged?
In Germany, most publishers are trying to implement “soft” forms of the paywall. The most common model is Freemium, a mixture of free and premium content in which the premium contributions are only accessible after a subscription has been purchased.
Not quite as frequently, publishers are using the so-called “Metered Model”, which enables the reader to read a certain number of articles before the payment wall appears. How many articles that should be, and how transparently and timely a customer should be informed about the end of free access, is currently the subject of intensive research in many publishing companies.
Finally, there is a small group of media houses that have introduced a hard paywall and an even smaller group that relies on voluntary payment.
The business model is changing
The introduction of paid content has fundamentally changed the publisher’s business model and has an impact on all areas of the company. The willingness to plan and invest long-term and at the same time to refine one’s business model by trial and error requires leadership, a clear strategy and intensive communications between all departments. A careful analysis of one’s corporate identity and brand is also a key to successfully changing to a paid business model.
The portfolio changes
Our understanding of the user increases considerably with the introduction of a paywall. This knowledge is of great value for the publisher, who can use it specifically to broaden the product portfolio and target individual users with events, promotions or other titles in the company. Knowing your target group precisely and tailoring your product portfolio to the individual needs of your readers is the foundation for the enormous potential of a well-considered paywall strategy. The audience is getting smaller and your offerings must be even more targeted.
There is No Copy and Paste
What worked best for one particular target group, for one product, can fail terribly when trying to adopt it across the board. Even if certain paywall models begin to emerge as promising over the long term, a commitment to each individual audience and the continuous tuning of the business model will determine actual success or otherwise. The previously-mentioned New York Times still offers promotions with free content for ten weeks or so, to ensure that customer loyalty and brand identity are still in sync.
No copy and paste, but strategy, company-awareness and strengthening of your own brand. Then no one will be upset!
Knut Nicholas Krause M.Sc., CEO and founder of knk, has been active as an IT consultant for medium-sized companies since 1986. As the son of a director of the Frankfurter Allgemeine Zeitung, he founded knk in 1988 and specialized in the development of knkPublishing, the only Microsoft certified publishing software worldwide. He is a visionary who explores industry trends within the publishing industry and incorporates them into the development of knkPublishing.