Interesting article from the Guardian last week talking about the Irish News online pay wall and how they’ve set up a paywall last year with the choice of £5 for one week’s editions, £15 for a month’s and £150 for a year’s subscription but only managed to get “just 1,215 paid subscriptions: 525 weekly, 370 monthly and 320 yearly”. There’s been lot’s of jabber about how newspaper pay walls won’t work, even as recent as this morning I came across this tweet from Umair Haque:
“1. the marginal cost of a newspaper is zero. 2. there is perfect competition. conclusion? zero industry profit, paywalls or not.”
I’m sure I’ve written about the eventual doom in the newspaper industry as well but no one ever talks about how they could make it work and what would need to be done. Don’t get this twisted, I don’t think pay walls are a good idea, but I do think they could, repeat COULD, work if done right.
So here are my thoughts, I believe there are three principles to make payment for news content work:
1 – offer superb editorial/analysis/content that is unavailable elsewhere
2 – keep it cheap and painless to pay
3 – Consistency across competitors
First, pay walls work when you have superb analysis or original great content like the WSJ or the FT. Where people aren’t paying for the “news” they’re paying to read commentary and gain insights. It works for people like the economist and monocle for content creators with a large, affluent readership. If you don’t have content that is killer odds are you’ll put up a pay wall and users will go elsewhere.
The other element that could help a pay wall succeed is making it dirt easy to purchase. Think of iTunes, how easy is it to buy music on iTunes? How easy is it to do a purchase on Amazon. One click and you can purchase. For a pay wall to succeed you’ll need to make it super easy to for users to pay. Make it even a little complicated and the users are off. iTunes might be more expensive than some other 3rd party websites, but the fact that you can make the purchase easily means I save time from interactive with the complex shopping basket functionality that you see on other sites.
Lastly, if you don’t have specialist content you better make sure that your competitors are not close enough to you in terms of content and aren’t giving the content away for free. In the UK the BBC is likely to always give content away as long as that’s the case it will be difficult for anyone to really put up a viable pay wall. To really make it work you need consistent pricing policies but most people would call this collusion. So if you’re a news media company don’t bank on this third principle.
The Irish News really failed across the board, they didn’t provide great analysis and content that was original, they didn’t make it easy to subscribe and their price point was all over the place. So to make it succeed, focus on creating great content, providing analysis and features that people value and making it dead simple to purchase and don’t price it at a point where it becomes a competitive disadvantage and pay walls might, I repeat MIGHT, have a shot.
