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It's payback time -- or is it?


Paton at Eppy/ Google at Eppy/ Charging at Eppy/ Blueprint to Build at RJI / CONFERENCE

Wrapping up the Editor & PUblisher Interactive Marketing Conference in Las Vegas, DAY 2 - Thursday, June 17, 2010 / 10:45am - 11:45am


Session summary: Could 2011 be the year that consumers start paying for Web news and information? It's been a crucial question asked throughout this conference, and we'll close with a wrap-up of what we've learned about paid content, subscriber-only services, payment systems, and other metering programs. No one knows exactly what the future will bring, but our panel will offer practical advice on how to prepare your company for various pay models.

Summary notes by Bill Densmore of the Donald W. Reynolds Journalism Institute.

Moderator: Martha Stone, Director, Shaping the Future of the Newspaper Project WAN-IFRA


  • Paul Fichtenbaum, Managing Editor, SI.com
  • Eric Moore, SVP, Media and Entertainment, Razorfish
  • Ernest J. Schreiber, Editor, Content Development LancasterOnline.com

Martha Stone's quick wrapup on this panel

  • Have a value proposition
  • Leave traditional media baggage behind
  • Monetize the unique content
  • Move quickly
  • Use analytics to define what readers want and are willing to pay for
  • Create a permeable wall
  • Keep a simple interface with the paywall
  • Find that sweet spot, what we can charge for
  • Promotion is key

The new revenue mosaic -- 50 different models your publisher can engage in.

the paid vs free debate

Should free online content remain free -- two of the ten major international reports that have been done on this topic.

Nielsen report on free content. They asked a number of questions, an international questionnaire with thousands of participants.

Most people say it should remain free. When you ask the question in different ways you get slightly different answers:

If payment system is easy to use: Shaping the future of the newspaper:

This is from:

Nielsen: Charging Models: A Globa Perspective on Paying for Content Online," Feb. 2010

In North America people will say will they will stop the using the news site if they can find it for free.

The ITZ Belden study, also done in 2010 -- asked how much are people willing to pay:

Source: "Paid Access Models: Practices and Profiles," produced by ITBelden, a partnerhsip between Belden Interactive and ITZ Publishing, Jan. 2010, outgrowth of work done for API.

What would you do if local site began charging:

42% ssay they would stop visiting.

37% say they would read as much as they can for free

18% say it would denpend on the fee.

Starts with Paul Fichtenbaum, managing editor, Sports Illustrated

He asks for handraising and everyone says they have bought music, books and aps on their iPhone. "People are paying for content right now, but it depends on what that content is . . . as a publisher you need to focus on what it is you are going to give the user that they are going to pay for . . . the content has got to be unique."

Sports Illustrated is going to be on the iPad starting next week. He shows some mocked up pages.

He says he thinks of the iPad not as a great reading experience but as a terrific viewing experience. He thinks Sports Illustrated will do well on the iPad for that reason. He illustrates how they are going to prepare each article in both a horizontal and a vertical view. There will be a scrolling bar at the bottom of most pages to allow you to select where you want to go.

"You are going to get the magazine and a whole lot more," says Fichtenbaum. "We are really bullish on it." He said the Wired Magazine iPad application has already sold 125,000 downloads.

Last year, Sports Illustrated sold 20,000 dowloads for $60,000 last year. "It's OK, but it's not going to change our business model."

In 2010 they went to a freemium model. The initial app is free. They got 900,000 downloads of the SI swimsuit issue since we launched in the middle of February and 10% conversion rate at $1.99 -- or $180,000. And they also got an advertiser to fund the whole thing. "So we kind of won from several different angles."

Lesson learned: YOu need more than one revenue stream.

Erick Moore, SVP of the digital ad agency Razorfish

About Razorfish -- they are part of the Publicus group. The state of things: "The genie isn't going back into the bottle." Industry has relied on advertising and there has been a one-way relationship with content consumers "and that is changing daily."

The industry needs to change the way it does business and look for other ways to monetize content. Here are some of his suggestions:

Determine what your core value proposition is

  • Look at what's unique in yuour content.

Define a monetization strategy that builds off of it

  • Still bullish on advertising, but one monetization scheme will not work. One or multiple channels.

Not all pay walls were created equal

  • Determine the value of your content and figure where you stand between freemium on one end and pure premium on the other.

Act lik a digital native, not a print tourist

  • Look for those best-in-class examples. Learn from those companies that didn't come to this with a lot of baggage. Adopt those behaviors of the digital native. Example: Create a value exchange in the registration process. Reduce the friction to that point. Examples in Netflix: A relationship created with the user, very simple and consistent.

Be consistent

  • Consumers are frustrated by different experiences in different channels. Were a site is no longer a primary destination -- the idea of a destination is losing meaning -- being consistent across channels is being consistent as a brand.

Be nimble and break out of the container

  • Whatever content you create is at the core of your value proposition. If the idea of a destination is not meaningful or the primary interact with your content, the more structure around the content you produce will enable you to make that content more portable and distributable.
  • There are opportunities for partnerships. You supply content and a product company can put that together. How can you make your content nimble and structure so that it can be distributed and lead to partnerships?

Do it quickly

  • "I personally get very frustrated working with some of the clients and prospects in the industry . . . there is an amazing amount of organizational inertia. The best of plans never come to fruition . . . it's too late."

  • Taking on 20 or 50 ideas is not necessarily good. But choosing one or two and moving on them quickly and getting something into market that can be tested or analyzed is extremely important.

Ernest J. Schreiber, editor, content development, LancasterOnline.com

He explains why the got involved with Journalism Online.

  • They have an 80,000 circulation daily paper in mid-Pennsylvania. There has been a lot of talk about paywalls. Absolute Paywalls don't work. The Financial Times model -- a meetered approach -- has fascinated them.
  • They use Google Analytics to analyze what do their readers really go after. They get 47 million pageviews per year and 5.3 million uniques. After the two index pages, the next highest category of readership was the obituary page. Six pecent of their readership is the obituary page.
  • Half of their readership is out of market.
  • Looking at frequency of readers, 48,000 people are reading that obit page more than four times a week. Half of those readers out of market, but that still translates into 20,000 coming to that page four times a week and 30,000 coming at least twice a week. "This gives us a piece of unique content, 6% of our readership, if we play around with charging for that .... it's substantial enough to look at who is coming in and why they are coming it . . . and see if we can make a metered model that works."
  • When Stephen Brill, Gordon Crovitz and Leo Hindery said they were going to do Journalism Online, we contacted them. We've had a wonderful partnership. He describes background of Brill, Crovitz and Hindery.
  • "What we liked about them is they weren't talking about doing something in a year or two they are doing it now. They have a wonderful programmer named Ken Ficara, he is in touch with us almost every day."
  • He shows their obit page, with like P+ icons showing which obits they are going to charge for. People can look at seven obits per week for free.
  • When the click on the first obit, they get a message, "We are delighted to have you as a visitor to our site and hope you visit often. you may read seven obituary pages this month for free. As you use this site, we hope you will value this information enough to become a subscriber . . . . "
  • when they get to five free obits, they get another message, saying you have a couple more to go. Finally they get a final screen asking them to pay.
  • "We are starting off asking $1.99 a month, or $19.99 for the entire year," says Schreiber. They are presented with screens that gives options. One screen then can pretty much register. Then they ask for credit-card information and it's done.
  • "We are trying to have a fairly simple, easy to understand example of signing up to pay . . .the site is supposed to launch next month, but it was also supposed to launch in April and then June."

Why this will work

There really isn't an elsewhere, Schreiber says. Nobody else has the community aggregation that LancasterOnline has.


  • Q: How much do you hope to make?
  • A: "I'm hoping that we are going to see $150,000 the first year."
  • Q: Martha Stone asks: Is there a piss off factor? Is $150K worth that?
  • A: When the Financial Time was doing that they were doing the careful metrics research. They will be playing around with the price in the first month with the idea of keeping 80% of the readership.
  • Q: Stone: Asks Erick Moore what he thinks.
  • A: Moore: You can make the wall more permeable and less severe. You can offer value for people to do things. FT.COM stops you immediately at the wall now. When you register you get a number of articles for free, but that seems like an equitable exchange.
  • Q: Martha Stone asks Paul Fichtenbaum what he thinks.
  • A: Fichtenbaum: "The web audience is always pissed off . . . you just need to test and experiment.

Now Martha Stone asks questions that were submitted by the audience. She aks how do prevent a loss of influence for content that goes behind the paywall.

  • Fichtenbaum: Part of it is the promotion. Put it in a place where users will easily see it, and then will just feel, "I have to buy it . . . You have to hit one little button and then you're in it." The promotion is key. You need to make those possibilities right in front of the consumer. Some SI columnists get 5 million views a month.
  • Schreiber: He thinks its important that people coming to your website are able to access the content. Only when they are accessing it frequently, ask them to support the journalists who are producing it.
  • Moore: A lot has changed since Times Select. Organic search is now generic across all media organizations. All media companies have solid search-engine optimization (SEO) initiatives. If you employ something like First Click Free, you negate the issue of people not being able to get a "free sample." He thinks it was great that The Times tried something and did something.
  • Q: Audience member. As people get more sophisticated is the technology more able to keep up with people on a metered model, to avoid people who are inclined to game the system.
  • A: Moore: When you do anything like that you look at the potential for abuse, it's not a big concern now. If it were the primary reveue channel it would be different. There are ways of creating authenticated cookies, if you are talking about the meter, yes, there will be some level of abuse. You are still allowing traffic to come from search engines. You may choose not to meter that. It might not be that big a deal.
  • Q: Andrew Apsher (sp?) of Inform Technologies. How much is people's willingness to pay related to easy of payment, like Apple. How much of it has to do with ease of use in terms of pay vs. uniqueness and value of content.
  • A: "One of the reasons we went with JO is exactly that reason. They are recruiting member from across the country, so once you are signed up with one newspaper member, you are signed up with all of them."
  • MARTHA STONE COMMENT: Once you hit a snag you have pissed them off. The research over and over in different places supports that.