Don't block people with a "wall"; entice premium users in.

It’s not a ‘paywall’ when it’s ‘freemium’

By Steve Outing

The word “paywall” as applied to news websites sucks. It’s a negative word. If a consumer hears that a favorite news site is putting up a “paywall,” the response is highly likely to be: avoid!

Some news-site user monetization systems truly are “paywalls.” I’m fine with saying that The Times‘ (the UK one) website has a paywall, since you can’t read anything on that site without first taking out a paid subscription — other than rare occasions when The Times drops its paywall, such as it did when the Queen’s Diamond Jubilee was taking place. (As a way for a news organization to get people to pay for reading content online, The Times’ approach is perhaps the dumbest one in existence. Latest reports put its digital subscriber base at 120,000; for a paper of its stature, I’d expect that figure to be much higher with a more-intelligent digital pay model.)


Don’t block people with a “wall”; entice premium users in.

The New York Times’ website, by contrast, does not have a “paywall” (if you ask me), though a large number of writers insist on calling the site’s payment model by that term.

It’s often said that NYTimes.com has a “porous paywall,” which is also “metered.” Translation: If you don’t want to pay for an online subscription (or a print subscription which includes full online access), you can visit the site and view up to 10 articles a month, after which you’ll have to buy a subscription for more. That’s the metered part. The porous part means that you can read more than 10 articles in a month if you click through to a NYTimes.com article from another source that’s providing a link to it — such as a search engine (including news search engines), a blog, or a social-media site like Twitter or Facebook. Those article reads don’t count toward your free monthly article allotment if you’re not a paying subscriber.

NYTimes.com is further porous to the at-least-somewhat technically inclined. It doesn’t take much sophistication on a web browser to defeat the 10-a-month limit. If told that you’ve reached your free limit, you can continue reading NYT articles online by: 1) lopping off the last part of the article URL, after and including the question mark, and refreshing the page; 2) clearing your NYTimes.com cookies from your browser and starting a new browser session; 3) copying the headline into a search engine to find the article, then clicking that link; 4) following NYTimes.com on Twitter and clicking through to articles from there; or 5) setting up multiple free accounts on separate devices (laptop, tablet, smartphone) so that you can read 10 articles a month on each.

Some media experts have suggested that NYTimes.com really is using a “donation model,” since it’s so easy to avoid paying and still read more than 10 of its articles a month. The logic goes: The people who are paying NYT’s “demanded” monthly fee actually are those who want to support Times journalism. It’s not that far removed from the NPR model of funding a serious journalism enterprise; public-radio supporters become “members,” and that’s essentially what NYTimes.com subscribers are. That approach by the New York Times (with upward of 400,000 paying digital subscribers) appears to be working much better than The Times’ (UK) “hard paywall” model.

Perhaps I’m just getting into a semantic argument, but I think that what NYTimes.com actually has established is a “freemium” content system. This is especially obvious on its mobile apps, but it’s also the case on the Times website.

  • NYTimes.com smartphone app: Without paying, you can read all the articles in the Top News section, every day; every other section on the app when tapped will prompt you for payment to read articles within. But reading NYT’s selection of top stories and nothing else on the app will keep you pretty well informed — for free. If that’s not enough, you pay to upgrade: Purchase a digital subscription. That’s the freemium model. The iPad app for NYTimes.com works the same way; the pricing is just different.
  • NYTimes.com website: I’d argue that the website likewise uses a freemium model. If you can live with reading only 10 free articles a month from the Times, then you’re at the free level. Pay for a subscription to see NYTimes.com’s full content and you’ve bought into its premium upgrade.

What I’d like to see NYTimes.com do is market the “premium” access to its news content as a “membership” offer

Actually, I think that publicly calling the NYTimes.com pay model “freemium” to an audience of news consumers is as foolish as calling it a “paywall.” Both are terms for media geeks.

What I’d like to see NYTimes.com do — and other news sites that in growing numbers are adopting a similar model for getting online users to pay to read news — is market the “premium” access to its news content as a “membership” offer. “Become a member and read everything that the New York Times has to offer on your computer or mobile device. Non-members can read up to 10 articles a month online or read ‘Top News’ articles daily on the Times’ mobile apps.”

Then, if we can scratch the word “paywall” out of the discussion and keep it out of any and all marketing communication, we can work on making the most out of digital “memberships.” The base membership can be what’s described above: simple full access to all news content. A higher-priced membership can be that plus other benefits: discounts to physical NYT-sponsored events; free participation in online events or webinars or Google Hangouts with newsmakers and Times journalists; complementary memberships in a NYTimes.com wine club; etc.

As more newspapers have copied the NYTimes.com payment model on their own websites, we’ve seen a wave of coverage about this sea change. And too often, the word “paywall” gets bandied about and published in news articles. That drives me nuts, because it’s not doing newspaper websites any good.

I’ve written before that for news websites and their supplementary mobile apps, a “membership model” is the best way to go. I’d add that a “freemium” approach is inherent in the membership model (or should be). I hope that the industry might take a look again at this model for getting online and mobile-device users to pay something, and thus get newspapers away from being so dependent on online advertising revenues.

The reality is this: NYTimes.com and any other news site that copies its user-payment model will have a large group of loyal free users (i.e., “non-members”) and a smaller group of paying users (“members”). We media geeks can look at this and understand that’s it’s an application of the “freemium” model. Consumers of news can recognize that their choice is to be a (paying) member or a non-member.

That sounds so much more amenable than “hitting the paywall.”

14 Responses to "It’s not a ‘paywall’ when it’s ‘freemium’"

  1. Ian
    Ian 2 years ago .Reply

    The Day (of New London, Conn.) has made the semantic leap you suggest. Click on the “join” button at the upper right hand corner of http://www.theday.com and you’ll be redirected to the “member services” section and offered the opportunity to “become a member of The Day.”

    In practice, The Day’s model is less porous than the Times’, and in truth, I’m not intimately familiar with the mechanics of it. I work for a competitor and don’t spend a lot of my time studying their system.

  2. Dave Newton
    Dave Newton 2 years ago .Reply

    Eminently sensible and well-thought-through. So fresh to hear; a guy who cuts through the Web-pundit conventional wisdom. Down with geek-think.

  3. David Justus
    David Justus 2 years ago .Reply

    Given the semantic focus of this article, it’s worth reconsidering use of the word freemium in this context. The freemium model was popularized by SaaS providers and the term, I think, is often incorrectly applied to content providers. Freemium success requires two conditions that are generally absent from content sites: value increases over time and users mix personal and business use. http://bit.ly/lKqlv6

  4. Pieter
    Pieter 2 years ago .Reply

    The problem with Freemium is that conversion rates remain very low (between 1% and 2.5%). There is a too large price gap between the free and subscription part.

    This should be filled up with pay per article,lunchpass etc possibilities preferrably with one click or even zero click payments (like pay as you go).

    What if payments could be as easy as shown here: http://bit.ly/IwKaqh (youtube link)?

  5. Albin
    Albin 2 years ago .Reply

    I’ve been surprised not to have hit NYT’s limit despite reading there often, true enough sometimes linked from aggregators. But I’ve also been using the “Do Not Track Plus” Firefox extension and the article makes me wonder if that might account for it, by blocking the cookie, or whatever.

  6. DPrizer
    DPrizer 2 years ago .Reply

    Call it a pay-”sieve.”

  7. Stephen
    Stephen 2 years ago .Reply

    Yeah yeah…whatever provides the Digital Utopians the cover they need to make their retreat. A lot of people talked smack about all paywalls and now are gettng reeeeeeally quiet about it and trying to change the topic. So call it whatever you want to make it emotionally bearable for you. Btw…do not fool yourself. The NYT paper individually now is covering its print losses with paywall money and growing revenues for the first time in years. And the last 3 quarters have shown rock solid 40k new subscribers per quarter with no loss of growth. The day will come when they do what the Times is doing and block spiders and crawlers. That porous part will go away. A 240 dollar year subscription will turn to 600 dollars in a few years. The NYT doesnt need your pageviews, but if your are feeling generous, stop by and look at a few pages to give them a hearty $0.00008. The rest of us will go onto Patch.com and free wire content…. That is until the AP tightens the screws too.

  8. Greg Golebiewski (@znakit)

    The term paywall is pejorative, of course, and it was coined by the opponents of paid content (or freetards, as someone called them). The NYT called its model a “metered subscription plan.”

    It is ironic that one of the sources that referred to digital subs as paywalls, was paidContent.org. They even commissioned a “survey” that was to show that readers hate to pay for news and that paywalls would never succeed (sic!)

  9. DPrizer
    DPrizer 2 years ago .Reply

    I was there in a number of meetings “debating” paid/free. And I have seen the concepts evolve from all or nothing to the “freemium” or “metered” model. Some, on both sides, became so deeply entrenched into defending all free or all paid as to obscure a new (at least for newspapers) distribution model altogether. Hence my prior attempt at humor by calling this a paid-”sieve.”

    Newspapers have been offering limited “free” exposure from the beginning. From town criers announcing the latest breaking events while hawking the product, to news stand gawkers trying to get a read on the latest above-the-fold story, to pass-along copies left in train stations, coffee houses, and offices. In the end, if we are going to wall-up our news sites, or if we are going to maintain fully free access, we need to willingly adjust our fiscal expectations, and resource allocations, and then determine whether or not this is sustainable.

    From where I stand, this is a new business altogether; “freemium” or “metered” is a new distribution model, and not a mere derivative of what was going on in the past. Defending all-paid or all-free are incremental arguments, in an environment that demands exponential change.

  10. Dave Newton
    Dave Newton 2 years ago .Reply

    What DPrizer said. Bravo. Or brava, as appropriate.

  11. Steve Outing
    Steve Outing 2 years ago .Reply

    Yeah, the “paywall argument” does seem a bit like American politics these days; the argument too often focuses on the extremes while a better answer is in between.

    It’s where on the continuum from Murdochian all-paid/nothing-free to all-free-news that is best for any one news enterprise that needs to be figured out. To take NYT as an example, again, I think the iPhone/iPad level is about right, with free access to Top News stories each day. That amounts to up to 10 stories per day, so it’s way more than NYTimes.com’s website limit of 10 free articles a month. With the mobile app, there’s incentive to subscribe if you want to read, say, NYT’s technology coverage or all of its op-ed columnists and not just the occasional content from those categories that appears in Top News.

    Personally, I think that metro newspapers that follow NYT and allow 10 articles a month on their sites are setting it too low. The reader who is not willing to pay but wants local news will simply move elsewhere, or be a less-informed community member.

    A model I’d like to see tried on newspaper websites is:
    1. What I described for NYT’s mobile app: set number of top stories free per day (don’t be too stingy!), so that a newspaper promotes a well-informed citizenry.
    2. In addition to subscription or membership offers to “get it all,” allow per-article payments and alternatives to cash to view an article outside Top News (take a marketing survey; view a video ad in an area of interest; etc. — i.e., rely on more than just online ads for revenue from non-payers).
    3. And finally, offer more than one “subscription” or “membership,” to give those willing to pay more to get more to pay for all-the-news and other benefits. Because digital news is ephemeral and thus seems to be more difficult to get people to pay for, offering tangible benefits alongside digital news may be an easier sale.

  12. [...] a paywall of some kind — or what digital-media veteran Steve Outing prefers to call a “freemium” model for news — be part of the solution? It could be for some, says Fox, but not for the vast majority of [...]

  13. [...] a paywall of some kind — or what digital-media veteran Steve Outing prefers to call a “freemium” model for news — be part of the solution? It could be for some, says Fox, but not for the vast majority of small [...]

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