Publishers are pouring their hopes into subscriptions and
memberships. That’s understandable. Consumers are exhibiting a (slowly) rising
propensity to pay for digital news, which analysts hope heralds a return to the
halcyon era in which subscription revenue was the basis of many newspaper and
magazine P&Ls. Digital subscriptions offer the additional benefit of
copious user data collection, which also buoys their advertising business as
well.
The New York Times’ 4.7 million-strong subscriber base has given many publishers hope that subscriptions can work. Although the Los Angeles Times’ recently-revealed figures make it apparent that access to a large enough audience isn’t enough on its own if the renewal rate isn’t high.
However, even the most diehard optimists and proponents of subscription revenue have to admit that subscriptions alone are not a universal panacea to the need for digital revenue. Only a relatively small proportion of people are willing to pay for online news and only likely to pay for a single news subscription As the latest Digital News Report states: “the question of whether people will ever pay for an online news subscription has evolved into a question about how many subscriptions people will pay for.” The report concludes that, at least for the time being, the answer appears to be “one.”
Worse still, the report finds that the proportion of people
willing to pay has not grown significantly in the past few years. This suggests
that there is effectively a hard cap on how many people will ever pay for
digital news. Those other consumers, effectively unwilling or unable to respond
to requests for donations or subscriptions, present a problem. So, as
cash-strapped publishers search for new sources of revenue, the question
arises: How do you monetize the un-monetizable?
Information exchange
Some publishers have attempted to redefine the value
exchange for the consumers that they don’t believe they can convert to paid
subscriptions. Instead, they ask them to provide raw information in exchange
for access. Some publishers in India, for instance, have asked users who arrive
on the page to complete an action in exchange for the content. Google’s Madhav
Chinnappa told me:
“[The idea] came actually from a group of students. They saw these moves to subscription and their concern in India was ‘what happens if all the good content goes behind a paywall, what happens from a democratic perspective.’ Yet they understand why publishers are doing that. So they said ‘is there a way to try and actually unlock content in a value transfer that isn’t around money?
“Their idea was creating a platform where publishers would allow access to their content for an action on the part of the user, something like labeling an image. I think someone described it as almost like a Mechanical Turk for access to content. I thought this was really clever because it they were coming at it from a point of making sure that there’s access to this information, but understand that it needs to be a value transfer.”
Other publishers worldwide offer access to content in return
for answering a survey or providing some personal information. The Financial
Times, for instance, has experimented with offering visitors the opportunity to
answer questions around brand awareness for access.
This approach has the benefit of allowing the FT to
extrapolate from that data its audience’s likelihood to buy from a brand, which
it can then use to bolster its advertising sales pitch. Four years ago (which
may as well be the Cretaceous period of digital publishing given how much has
changed since then), Google estimated that publishers employing a Google Consumer
Survey could earn $.05 every time a site visitor answers a survey question.
However, developments around GDPR and increased public
awareness of data privacy have re-established the value of the publisher when
it comes to user data. Thus, the potential value of those answers has
increased. As ever, the devil is in the details when it comes to schemes like
this. Really, the execution of an interruptive survey can make or break the
establishment of a value exchange in the mind of the audience.
One-offs
The focus on long-term subscriptions is, as discussed
earlier, a smart one on the part of publishers who command a serious share of
the market. However, smaller publishers face a choice between going incredibly
niche (effectively becoming the only game in town for a particular bit of
information) or finding other ways of generating direct consumer revenue.
The Guardian, with its exhortation at the end of articles for its readers to support the paper, has seen success with one-off donations. Of the one million people who chose to contribute, 600,000 were one-off donations.
It is notable, however, that even Wikipedia has had a hard
time convincing its audience to pony up and support the site through donations.
That is despite ranking in the top ten websites
by traffic and offering users a slew of ways to pay. This suggests
that a campaign that encourages one-off donations is a Sisyphean task, and one
that carries more inherent risk than a regular subscription.
Still, just as some publishers are attempting to redefine
the value exchange by offering access in exchange for information, other
organizations are attempting to make one-off payments more viable. Axate, for
instance, which allows users to pay funds into an online wallet that can then
be used to buy access to individual articles, is already being used by popular
sites including Popbitch.
Axate’s CEO Dominic Young said that the long-term value
exchange of hard paywalls doesn’t work for many consumers of digital news: “Our
observation about the market is… the consumer behavior is strongly driven by
habit. Media consumption generally exists in a kind of casual part of most
people’s [habits], in the same place as cups of coffee. In other words, people
casually but frequently buy, but very rarely make commitments. You don’t
subscribe to Starbucks.”
However, Axate joins a long line of those who have tried to make micropayments work for the media business. So, while there’s debate over the terminology of the one-off payment (with ‘tips’ and ‘donations’ both carrying a sort of semantic weight that puts some publishers off), the reality is that some consumers would welcome an easy way to have one-off access.
Off the wall
Beyond those quite reasonable attempts to change the value exchange, there are others worth noting. Traditionally, content consumers who opt not to pay directly have been monetized through advertising. However, despite improvements over the past few years, the ad ecosystem has been stacked against individual publishers.
It’s a situation that has been exacerbated by the rise of ad-blockers. In February of this year the Internet Advertising Bureau UK commissioned YouGov to conduct a survey on ad-blocking, and found that roughly 22.6% of adults in the UK choose to block ads, a figure that has remained steady for the previous three years. And in the US, nearly 26% of internet users (and climbing) block ads. Meanwhile, an Association of Online Publishers’ survey estimated that adblocking was costing UK publishers “more than £18.4m in 2018, up by more than a third from £13.7m in 2017”.
In this well-reasoned post from February 2018, Salon noted that “with the increasing popularity of ad-blocking technology, there is even more of a disintegration of this already-tenuous relationship; like most media sites, ad-blockers cut deeply into our revenue and create a more one-sided relationship between reader and publisher.”
Salon took an unusual step in an attempt to re-establish an equitable value exchange for audiences. They asked consumers to allow Salon to use their computing power while they were on the site to mine crypto currency. This made headlines at the time, with responses noting variously that it was a controversial yet brave attempt to find a new revenue stream. (Mind you, other less courteous sites had been doing exactly the same without informing their users.)
However, despite all the noise at the time, Salon has since moved to offering ad-free premium offerings. Its subscription offerings range from a year in duration to one-hour long.
Walled-in
Unfortunately, news subscriptions –
and the move to harder paywalls – do not serve the
vast majority of news publishers well. Their widespread adoption may well
encourage more people to pay for access to news content, but it will be the
largest publishers who benefit from that increased propensity in the short to
medium term.
For others, efforts to redefine the value exchange between content
creator and consumer – whether through information exchange,
in one-off payments, or anything else – are essential
in order to learn how to monetize seemingly un-monetizable audiences.
