All Posts Tagged With: "freemium"

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.”

If you’ve read my columns or blog lately, you’ll know that I’m not a fan of forcing web users to pay for news content. (See previous blog item posted earlier today.) I DO want people to pay news companies to support the important journalism that they do, but the dangers of cutting off a news entity’s non-niche content from all but the tiny minority who are willing to pay is a strategy certain to backfire because it will reduce news companies’ ability to grow online advertising revenues.

Alas, the CEOs of many of the large media companies are much smarter than me, and in their wisdom they are marching toward a future of paid news content on the web in order to save their old product, the printed newspaper or magazine. So far we have these announcements of putting mandatory price tags on news online:

• MediaNews Group and its 50+ newspapers will begin charging for their local news content.
• The owner of Philadelphia Newspapers (the Frees Press and the News), Brian Tierney, recently told Fox News that his website (Philly.com) probably will introduce a paywall by the end of the year.
• News Corp. chief Rupert Murdoch has expressed his desire to see newspapers around the world follow the example of his Wall Street Journal and charge for news online in a hybrid model. His Sunday Times in London is said to be pondering a web news paywall.
• Journalism Online founder Steven Brill is bragging that he got a non-skeptical reception at a recent meeting of newspaper company CEOs, that’s he’s got a couple of letters of intent to sign up for his upcoming paid-content solution for publishers, and more will be signing on very soon.

I also pick up a lot of rumors, and know of other major newspapers supposedly planning or building paid-news walls for their websites. So it sounds like a growing group of publishers are getting closer to the cliff.

If the new-journalism infrastructure had risen adequately to replace the level of watchdog and quality journalism of the newspaper industry, I wouldn’t care so much. But we’re not there yet, so I’d prefer that newspaper companies survive and figure out how to restaff their newsrooms with talented journalists.

What other options should these panicky publishers consider? Here are a few:

1. Keep news content online free, but establish voluntary newspaper membership programs offering real value. (I outlined this idea roughly in a recent Editor & Publisher Online column. The concept — which I do not claim to be original — generated a lot of positive response, and very little skepticism.) Paying members can even be granted access to truly special or premium content, while 99% of a news website content can be free to everyone. This strategy, executed well, is likely to generate more money that any of the paid-content schemes I’ve heard about.
2. Join one of the voluntary paid-content networks currently being introduced. I first wrote about Kachingle a few months ago, which sets up a monthly, automatic voluntary contribution for a web user, then allows the user to select the websites or blogs that should get his or her money in a “frictionless” way, apportioned automatically by the number of times a month the user visits the favorite sites. This brings web publishers, including news sites, an additional stream of revenue without having any negative impact on advertising revenue. Since then, several competitors to Kachingle have appeared:

• Contenture: Similar to Kachingle, with one difference being that Contenture promotes the idea of publishers offering Contenture network paying members access to special content that a publisher may choose to make unavailable to non-members. The company’s motto is “Building a Freemium Internet.”
• Inamoon: Another “global content pass” program than multiple publishers can join, and Inamoon members’ monthly payments are divvied up by the time they spend each month on participating sites. Concept is similar to Contenture’s.
• EmanciPay: This is an open-source project led by the brainiacs at the Berkman Center for Internet & Society at Harvard Law School, and has the intent of creating a system that makes it easy for online content users to decide how much to pay, rather than leave it under the control of the publisher in a mandatory paywall system. Though in the EmanciPay model, a publisher would be allowed to set certain limits, such as a minimum microtransaction cost or a minimum subscription fee that the user must pay at or above. This is quite different from Kachingle, where a website reader could choose to pay nothing and still access the site’s content.

If I’ve missed any other companies creating similar systems, please let me know.

With multiple players going after this “softer” way to get people to pay for web content, perhaps it will play out that a news website, say, would participate in several of the voluntary or freemium networks. Users visiting the site who were members of any of the networks and like the site enough to support it via the payment network would contribute money to the publisher. (Or perhaps one of the initiatives above will come to dominate.)

The point is, there are alternatives to joining the lemmings headed for the cliff who want to lock down their news content online. We’ll either see a lot of blood on the rocks, or the lemmings will come to their senses and start to take different paths.

(Addendum: In the interests of accuracy, and because a Twitter follower pointed out my lack of knowledge of actual lemming behavior — I must’ve fallen asleep during biology class during that lecture years ago — let me correct that last paragraph. Lemmings can swim and during mass migrations have been known to jump into the sea and then die from exhaustion. So strike that “blood on the rocks” metaphor. Jumping into the sea and then later dying from exhaustion is actually a better metaphor for the publisher behavior I’m trying to stop. Should a bunch of them take the leap into web news paywalls, their companies won’t die instantly, but will slowly decline and perhaps eventually expire. OK, now we have a more refined and apt metaphor. )