Skip to content

Paywall strategies – redefining product value

June 1, 2011
Applied Bioinformatics brochure cover

Applied Bioinformatics - an easier challenge for a paywall strategist than an industry news service?

Paywall strategy is one of the buzz words of the modern media age: how can publishers and content owners get viewers to pay for information which the digital media experience almost defines as being free? And when they’re there, is there an opportunity for ancillary revenue?

Magazine publishers remember well the halcyon days of the “controlled circ” mag where an ABC audit was a guarantee of advertising revenue. Book publishers themselves fondly recall the ancillary revenue opportunity of books with paid advertising. Indeed, a conversation with many leading lights in today’s magazine still shows a stronger appetite for the audits than for paid subscription levels. Old habits die hard.

The conflict is this: paid subscription numbers versus ancillary revenue – it’s all revenue, how to ensure it? It applies as much to digital information services as it applies to e-books and news.

When it comes to news, however, Forrester Research has identified that of all digital information, news is viewed as the item most likely to be perceived as “free” – i.e. having limited or no pay value.

The implication here is that publishers must concentrate on differentiated value to ensure commercial potential. Products which used to rely on “the latest news and information” as a strapline are in a difficult position. Information – “content” – is king. But is it really? And if so, what content? Cue, once again, the brand.

Brand is a crucial driver of credibility – especially in the digital environment. Whether it is gain (and retain) paying subscribers, to attract advertisers as part of a mutualised model, or some kind of hybrid model of the two.

How is this so? In the past, advertising-based brands survived because of the convenience and logic of the magazine format: available from a newsagent near you. The magazine represents a cosy blend of information and advertising linked to the reader to substantiate their choice: whether meat trader or model train fanatic.

Similarly, subscription based models – for example newsletters – were convenient, value-rich and logical: an annual subscription delivering demonstrable value. The newsletter offered an instant understanding between information provider and recipient. The “news” part was always pretty duff but the content-rich industry analysis was high-value gold dust.

But digital products exist in a confused world. The greater brand is the internet itself, just as Amazon is the greater brand than the book publisher. The challenge, therefore, is in brand assertion against a larger brand built either on “free and encyclopaedic” (the web) or cheap with good service (Amazon).

So what is the brand and why is it relevant on the web? When people find you, why will they be convinced – especially when there’s no tangibility? Is it logical that a reader of a magazine will transfer to the web, or a paid-for app, or some other device?  The challenge for publishers is not to monetize existing products digitally but to understand the consumer experience – to rediscover and reconnect with their existing users.

So, what’s the human interest? What does the information do for the user so that the economic sacrifice made to receive it is far outweighed by the value offered in return?

Is a digital product really relevant to the owner of a corner shop? What use can a model aircraft maker make of a pile of WW2 ‘plane diagrams digitally stored in a paid-for online library? How can a classic motorcycle enthusiast really benefit from a ten year archive of the magazine when he or she has only ever owned the same old rusty Norton since 1975?

It may indeed be the case that products simply don’t transfer online as a digital solution, and nor does a collection of unsuitable “industry-related” products somehow become an online “solution”. This is not a failure of the product, it is a failure of the publisher to connect with the reader.

Today, we have moved on from a “one size fits all” solution to our needs and we are seeking the bespoke. How then can we attract people to an old brand based on a magazine, book or encyclopaedia? If your old print name isn’t relevant in the digital world, what name is? Why should readers believe you? In such an environment, reader interaction through strong brand credibility is therefore very important.

But what, in the end, is your brand – and why does it matter any more? That’s the challenge – and no-one is denying that it’s pretty huge..

6 Comments leave one →
  1. June 1, 2011 12:35 pm

    I suppose magazines and other information services were always bespoke within the restrictions of technology. Now we can do so much more tailoring…Brand and service provision to customers are the key and we shouldn’t underestimate the value of “trust” and existing offline “curation”. The customer is still king and they must have their content!

    • June 1, 2011 12:39 pm

      Absolutely – but it does mean that behavioural traits within publishing need to be overcome. We cannot do what we’ve always done – or we’ll always get what we’ve always got! We all become marketers – and not before time!

      • June 1, 2011 1:30 pm

        Agreed…the biggest “P” is Product and to get that right publishers need to focus more on the who and why. Interesting how the debate feels so similar to the late 1990’s…is it because CC is on the wane (although in certain areas it is holding up very well) and publishers have less time to migrate to online and to make it pay however they can?

      • June 1, 2011 1:59 pm

        Probably also because publishers have to keep generating money any which way – no one said it’s easy!

  2. Steve permalink
    June 6, 2011 5:56 pm

    Heady and insightful thinking in an environment where most publishers have hunkered down and are awaiting the resurrection of the “good ol’ days.” However, I’m not a disciple of the dogma that our brands are our long-term lifeline. The demographics our advertisers want to reach are changing at breakneck speed and those readers/consumers simply don’t buy the “it’s not your father’s Oldsmobile” bumper sticker we’ve taped over the online version of our newspapers and magazines. Publishing survival for those of us not on the national radar screen will require monetizing individual stories based on a marketplace of readers who determine the monetary value of those individual stories – aka, the consumer experience – and not gimmicky paywalls that rely on the continuing insanity of brand value to carry the day.

    • June 7, 2011 8:30 am

      Hi Steve

      What a great response to this post – and I love your point about the Oldsmobile; absolutely spot on! The point you make about determining the monetary value of the stories is a really interesting one and I suppose some of this is about (1) education on the one side and (b) chutzpah on the other: (1) moving the customer mindset away from the “Oldsmobile” packaging and (b) the publisher being brave enough to understand, promote and leverage a totally new way of thinking. The assessment and determination of that pricing model is the difficult thing but with that model comes a redefinition of the publisher’s brand – i.e. the emotional perception of what the publisher is and how the publisher relates to and delivers for the reader. I guess this is the point I was trying to make about brands – being brave, being credible and being interactive, while at the same time still delivering a “warmth” for the reader. The nugget in your comment is your point about “those of us not on the national radar screen” – what Robert Fripp called the “small, mobile and highly intelligent” or, in other words, the small mammals making a new dawn as the dinosaurs fail to cope. There’s less at stake for the small publisher and, boy, can they teach the big players alot.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: