All traditional publishers who got seduced into putting all their content for free online in the expectation of abundant advertising revenue, are now examining the options for charging for digital content in the way they used to charge for print. Much of the public debate recently has centred on national newspapers, with Murdoch the main paid-content evangelist, but to my mind they have the hardest task of all, as news is ubiquitous, and it’s very hard to defend the value of one newspaper’s take on a news story over a free source such as BBC or Google.
So what about the more specialist consumer or B2B publisher, who on the face of it has a clearly defined target audience and relatively unique content. How do they decide what should be free and what can be charged for, and how can they price and distribute the valuable stuff? This article aims to provide a road map to help more specialist publishers identify what has a value and price it appropriately, based on current examples of publishers who are already testing these ideas.
What content should be free?
It’s important not to devalue free content. It has an important part to play in helping a media brand build an audience through search, and demonstrate to its newcomers or less committed users what it can provide to its subscribers. Those publishers that implement a full paywall (such as Which?) are missing out on this sampling opportunity. Some digital businesses, such as Econsultancy, have built their reputation on their high quality free content, and use this as a means to sell premium subscriptions. Traditional B2B publishers such as Emap and RBI, are leaving news and forums content outside the paywall, while heavily promoting the premium research and lead generation content only available to purchase. The Spectator recently put its magazine articles behind a paywall, but left their blog and celebrated coffee-house forums free. Interestingly, their MD, Ben Greenish, says that traffic figures have declined only slightly since this move.
So publishers need to work out which of their content is actually marketing and can be left free for a purpose. The value of free content will only be realised, though, if there is a clear plan to promote and convert the casual reader into a subscriber or purchaser of more premium stuff. Trial periods are a good way for buyers to test out the value of paid content packages.
What content will people pay for and how much will they pay?
Most well-publicised surveys have focused on general news, so the best way to determine the value consumers place on more specialist interest content is to observe what other publishers are doing. I have considered consumer and business audiences separately.
Consumer publishers
The biggest shift for traditional print publishers is the unbundling of their content. They used to charge an “entrance fee” for an editorial package and then have the audience’s undivided attention. Consumers now seek a more pick and mix approach, and don’t necessarily want to pay a fixed sum for a fixed package. Although general news is considered to be free as of right, people will pay for convenience or immediacy – see the success of paid mobile apps for newspapers, with the Guardian selling 70k apps at £2.39. Readers can see the value of specialist product reviews when they have a large or risky purchase to make. They also value the links and searchability of online or mobile content. Here are the main charging options being tested by consumer publishers:
1. Single article / piece of content.
There’s much talk of micropayments around national press, but the values are likely to be in the order of a few pence. In more rarefied markets, single articles can command a higher price: New Scientist can charge £3 for an article in the US. Lonely Planet charges £1.50-£2.50 for chapter extracts from its travel books, but these can run to 20-30 pages! Thus the chances of charging more than a few pence for 500 words are slim. Recent surveys show that consumers place the highest value on columnists, which is fine if they are exclusive to one media owner, but not so good if they blog or tweet for free as well...
2. Single edition of magazine.
This is more popular as an iPhone app than as a digital edition. Athletics Weekly offers a 1-week sub to its magazine for £1.19, a slight discount on the print edition. The Spectator also offers a 1 week sub at 59p. Both of these allow access to past issues as well, but only for the duration of the sub. So a discount to the print edition is expected. Note how the basis is shifting from the weekly or monthly issue, to a time-based subscription with access to all past editions.
3. Product reviews.
Several publishers offer downloadable in-depth product reviews. Parkers charge £1.99 for a day pass to their archive of 20,000 car information packs, and £4.99 for a checklist on a specific model. YBW.com, owned by IPC, charge £6.95 for detailed yacht reviews. If you are contemplating a £10k+ purchase, then this feels good value.
4. Annual subscription / membership.
This is closest to the print model familiar to many publishers. The Spectator charges £67.50 for its digital edition only; less than print but more expensive than the iPhone version. Dive magazine charges c£20pa for its digital edition sub; again a discount on print. Walking World charge a £17pa membership for unlimited downloads of walks from their site. Subhub, a digital publishing platform, has seen its clients succeed with expert wine-tasting notes, or reviews of port facilities for yachties. Racing Post has developed a premium online subscription package and now has over 10,000 of its best customers paying. In line with the comments on free content above, 90% of their content is still outside the paywall promoting their services to their 750k visitors a month. Some newspapers – Times and Guardian - are creating a membership club with other benefits including events, offers and additional content priced at around £5 a month.
Business to business publishers
Many B2B publishers are being forced to take tough decisions over the content they produce and how much it is valued by their audience. The old model of a weekly magazine filled with news and gossip and a few surveys and opinion pieces just doesn’t stack up. See the recent closure of the print edition of MediaWeek. Content is more continuously produced and searched for when required. Most business people now are part of a community where news and gossip is passed around by email, LinkedIn or Twitter, so trade publishers’ news is no longer unique.
The real value in B2B is in creating lead generation or trend forecasting services, or providing business people with truly useful tools that they can integrate into their daily workflow. The gold standard here is a business like Emap’s WGSN, which predicts fashion trends for retail buyers, and commands £15k pa subs rates. Most B2B publishers are adopting hybrid models, where they offer some free content and then heavily promote their premium services. These are the current models being tested out:
1. Bundled online subscription with print.
The simple approach: reward your print subscribers with access to all your premium content. The Economist offers this, as does NMA published by Centaur. The recently announced package from Emap’s Construction News also follows this model. Where they vary is in the amount of content outside the subscriber walls.
2. All you can eat digital sub.
This is offered as an alternative by some print-based publishers such as the Economist – at £95, a discount to the £102 print sub. It’s also being tested by Paid Content who don’t have a print product. They are researching a £129-£249pa digital sub for archives and reports, with only this week’s news available for free. Mobile platforms make this charging basis a bit easier; Music Week has just launched an iPhone app offering 30 days’ access to current and past editions for £9.99, although some articles will be available free.
3. Free news and paid-for research/tools/directories.
This hybrid model is favoured by RBI and also Emap; allowing readers to pick and mix the content and services they feel most valuable. The free news keeps the traffic, allowing the premium products to be promoted. Incisive in the US charge for database-driven products, such as compilations of court verdicts.
4. Metered access.
This is the famous FT model, and since they say they now generate more revenue from readers than from advertisers, it seems to be working for them. The New York Times is also thought to be plumping for metered access. This lets readers view a number of articles for free, but once they exceed a fixed limit, they have to pay.
5. Free content and make money elsewhere.
This is the model favoured by Econsultancy, who keep most of their content free, and then charge for directory listings, or downloading reports, or attending training and events. As their profits have reportedly grown by 30% in the last year, this seems a successful strategy. Haymarket also take this approach, with their free Brand Republic site and relentless promotion of events. If your competitor has this strategy, then it will be hard to implement a total pay wall, as New Media Age, which competes with Econsultancy and Brand Republic, is finding in the digital marketing sector.
The road-map
So what does all this mean for the specialist publisher?
* Take a hard look at all your editorial content, and work out what draws in new readers, so should be available free. Also decide what is unique and has a true value to the hard core, so can be charged for. Then stop spending money on creating anything that falls outside these two categories.
* Gauge what your competitors are doing; if they can make money from free content and added value services, you will struggle to make a paid proposition work unless you have a distinct offering.
* Experiment with different platforms – I think the Spectator’s approach of putting their content online, in digital editions, on the iPhone, and on the Kindle, is quite a good one; they’re not risking too much on one platform, and will learn a lot about pricing across different devices.
* Work out how you can make money through events, specials, reports, and useful tools, as you will need this to replace lost advertising if traffic declines, and, initially, paid content prices are likely to be low.
* Evaluate the impact on ad revenue; whilst traffic may fall, will your subscribers form a more valuable group, so you can charge a premium ad rate? This has been the experience of the FT.
* If you are considering online subscriptions, make sure your web platform can deliver the model you want – and the next iteration.
And keep watching other publishers, to see what is working for them. I’d put my money on a hybrid approach, with some free content marketing your brand, some pick and mix options, a premium offer for the loyal core, and a wide range of profitable events and specials that you can market to your database. Good luck!
