Publications Coaxing a Click

Austria has cautiously boarded the bandwagon of media charging for online content

After 10 free articles, The New York Times pulls the plug, but more content is only 99 cents away. Should we really hesitate? | Photo: nytimes.com

After reading a piece on nytimes.com, the site suggests related articles. You click. The screen turns dark and a bright pop-up window appears: “You’ve reached the limit of 10 free articles per month.” You could pay the 99 cents to get unlimited access for the first four weeks, but you hesitate…

When the internet became commonplace 20 years ago, the publishing industry reacted quickly, with derstandard.at going online in 1995, the first newspaper to do so in Austria. News became free for anyone with a dial-up connection.

Today, this free content is taken for granted. Traditionally advertising accounted for two thirds of a newspaper’s revenue, with only one third coming from single copy sales and subscriptions. With the advent of the internet, however, print ads have declined and digital advertising doesn’t make up for the revenue lost. Increasingly, newspapers are charging online users – and many more newspapers are considering the move.

In Austria, only Wirtschaftsblatt charges online users for selected content, while derstandard.at, kleinezeitung.at and krone.at – Austria’s most frequented newspaper websites – remain free.

Some dailies, like Kurier, have announced plans for a pay wall, but most media companies are still waiting. “I’m no expert on Austrian media,” said Bill Mitchell of Florida’s Poynter Institute and frequent lecturer at the FH Wien for Journalism, “but my outsider’s impression is that its leaders are quite cautious.”

 

After 10 free articles, The New York Times pulls the plug, but more content is only 99 cents away. Should we really hesitate? | Photo: nytimes.com

After 10 free articles, The New York Times pulls the plug, but more content is only 99 cents away. Should we really hesitate? | Photo: nytimes.com

It’s the internet, stupid

Globally, online publications are struggling. For Markus Rautzenberg, media philosopher from the Freie Universität Berlin, the problem stems from certain characteristics of the World Wide Web: “It’s the quantitative availability”, he said, “and the reproducibility without qualitative loss that make earning money with online content difficult.”

Gone are the days of Xerox and VHS; now we have endless, reproducible content. “If you want to avoid buying a newspaper, you have to steal it or make a photocopy of it – both require more effort than just buying it,” he said. It’s easier to read it online – for free. “All of this doesn’t make paid online content any more attractive,” Rautzenberg said.

 

Neighbourhood watch

Neighbouring countries are farther along: In June, German tabloid Bild introduced a pay wall. Over two years, publisher Axel Springer developed Bild Plus, a “freemium model” that charges only for exclusive content, like videos.

In 2011, more drastic steps were taken in Slovakia: The major publications erected a shared pay wall through the company Piano Media (see “Saving Central Europe’s Newspapers“, TVR Nov., 2012). Several Polish and Slovenian publications have also used Piano’s service. The Germans have not.

“Maybe our situation isn’t desperate enough yet,” said Markus Rautzenberg. But Slovakia, Slovenia and Poland are linguistically isolated; Austria has more competition in the German-
language market.

 

Creating new value

The success of hefty subscription rates for exclusive newsletters and the crowd-funding website kickstarter.com demonstrate that people are willing to spend money for relevant content and ideas they believe in.

According to Mitchell, pay walls make sense for websites with industry-specific and time-sensitive content, dealing with financial markets – like The Wall Street Journal – or sports. Going digital never meant a decrease in product demand, as Mitchell stated, “like journalism, pornography has been disrupted by the internet but still generates significant revenue.”

Mitchell sees a pattern to the success of paid content: “Interestingly, it’s often news sites at either end of the spectrum – quite small, local sites and big national or international sites like The New York Times – that do best with pay walls”, he remarked. According to Rautzenberg, The New York Times pay wall, erected two years ago, is a best-practice example. Despite recent numbers showing that growth has slowed, the Times company makes $150 million per year through digital subscriptions. As long as online content isn’t available somewhere else for free, a payment model can work.

News content alone will no longer cut it – according to Mitchell, publications need to provide a “service”. This means “special email alerts for subscribers” or “access to special events”. He cited the subscriber perks for The Boston Globe, thanks to which he recently attended a book discussion, organised by
the newspaper.

Rautzenberg agreed that a pay wall website needs to offer more than just information. He stressed the gatekeeper function of journalists in the internet age: to filter out the relevant news for an audience without the time or know-how to do so themselves. “The more people begin to acknowledge this quality and how important it is in this age of information and image overload, the more they will be willing to pay for it,” he continued. “But it is a slow process.”

 

Seduce the user

It seems strange, but a lesson might be learned from games like Farmville. These are free games and apps which require users to buy additional items for less than €1. Addicted users don’t hesitate to pay these small fees. “The sum of those small payments creates big revenue for the business”, Rautzenberg explained. This concept could be adopted by journalists “in a number of creative ways.”

First, though, you have to be immersed in the product. “I have to want it,” said Rautzenberg. “People need to be seduced, not parented. There is no other way – no matter how sincere the publication.”

Overall, the jury is still out, but for Mitchell, “the most successful models enable the publication to maximise their reach and revenue,” which implies permitting a certain amount of free content. Rautzenberg also believes that online publications should stress their exclusivity and pay special attention to their presentation, design and usability. Flexibility is key; websites need to be accessible from different devices.

“If I erect a pay wall, I need to tear down all other walls”, Rautzenberg said. “If you combine all of this with the traditional qualities of journalism – it can work.” ÷

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