paywalls in germany 2015: another brick in the paywall?

ANOTHER BRICK IN THE PAYWALL?

Paid Content in Germany.

17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 2Times have changed...

...even The Times has changed...17.04.2015 3

NewspaperNewspaper and OnlineOnline ad revenuein Germany, in Bn EUR

17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 4

Source: Statista

Newspaper ads

Online ads

Paid content

17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 5??

Agenda

1. What are paywalls?

2. (How) Do they work?

3. How to implement a paywall


►

Three paywall types


Source: Own research

«Hard»Paywall Freemium Metered

PaywallUsually ~15 articles

by quality

by quantity

by time

Cannibalization – a reason for paywalls?


vs.

Digital news is a complementary product,not a copy!


Source: Vento (2012), Own research

Medium

Content

Delivery

e.g.:fast-paced, personalized, short, ...

e.g.:hyperlocal, opinions, blogs, ...

e.g.:videos, photo slideshows, games, ...

DIFFERENT

Pay-WallPay-Wall vs. Pay-Wil lPay-Wil l

►Clear value, flexible payment mode(l)s, fitting for content


Source: Leonhard (2012), Wagner (2012)

???

FlagshipMetered Paywall

TrashNothing to monetize

Content type vs. monetization strategy


Source: Piano Media, Leap Media Solutions, Media Manager‘s Club, Own research

NicheHard Paywall

CommodityAdvertising

TRAFFIC

LOYA

LTY

Agenda





►

Paywalls in GermanyStatus quo


Source: Statista, BDZV

2015 (total: 102)

2013 (total: 55)

Paywalls in GermanyPricing Pricing and MeteringMetering models are very similar


Source: BDZV, n-values in LTR order: 52, 51, 57, 33

<1€ 15 -25€<10€

Daily Pass Monthly Pass Monthly Pass+ePaper

15-20

Allowed Articlesper month

EffectsEffects of metered paywallsGeneral “wisdom”

traffic decline: 5 – 40%


Source: Statista, Piano Media

Readers hitting PW: 1.3 – 6.5%

Subscribers: 0.01 – 2.0%

??

TRAFFIC


?!?!

Agenda





►

3 phases of a paywall launch:Overview


Source: Vento (2012)

Pre-Pre-Launch Pre-Launch Post-Launch

LaunchIncrease # of readers Announce the launch externally Capture and retain customers

>3 months >3 weeks 3+ months

Action

Time


???

«Die Zeit»Status quo


Source: Statista (Reach and ad revenue: (weekly) newspapers; Users: news websites, aged 14+), IQM, AGOF

500,000

25,000

120 Mn

Newspaper reach per year

ePaper reach per quarter

PI per month

#2

#6

#2

900k€Totalad revenue per month

«Die Zeit»Possible effects


Source: Statista, IQM, Piano Media

7.35 Mn

5.65 Mn

1.84 – 4.78 Mn

95k – 478k

<15k – 147k

Total visitors à 4 visits à 4 PI

Unique users

Unique readers

Readers hitting paywall

Subscribers

25 - 65%

1.3 - 6.5%

0.01 – 2.0%

76.9%

Market potentialMarket potential

Target marketTarget market

«Die Zeit»Key outcomes

In the short run, <10k<10k subscriberssubscribers compensate lost ad revenue of ~500k visitors~500k visitors

Pricing Ad model vs. user structureCalculation: 500k * 4 visits * 4 PI = 8 Mn PI @ 20€ TKP = 160k€ = 16€ / subscriber

Example 1: «Süddeutsche»: 5.000 * 30 EUR = 150k EUR / month (potentially) Example 2: «BILDplus»: Subscribers per Unique User rate of ±1%


One more thing — alternatives?

Native advertisingSponsored content (e.g., WirtschaftsBlatt, Buzzfeed)

Learn from mobile gamesGamification, tailored concepts

Micro-payments at point of need


One-year effect of paywalls


Source: completely made up

Hard paywall

Metered

Freemium

VISITS

UN

IQU

E U

SERS

More research needed?


?!?!

Key take-aways


1. Know what and when to reveal

2. Communicate clear value

3. Know and hold your audience

4. Be creative!

THANK YOUFOR YOUR ATTENTION!

Do you have any questions?

Further reading

M. Olavarri (2013): «Das Paid-Content-Workbook»

M. Vento (2014): «Launching a Paywall»

P. Berger, D. Eng, D. LaFontaine, D.J. Siegel (2009): «The Free v. Paid Online Content Debate»

J. E. Cook, S. Z. Attari (2012): «Paying for What Was Free: Lessons from the NYT Paywall»


MORE FACTS AND FIGURES

If you didn’t have enough...

How U.S. daily newspapers decide to design and implement paywalls

Publishers consult each other, not audiences, before launching paywalls

Paywall-Meter ~10 articles

Daily newspapers infrequently conduct audience research prior to implementing paywalls.

Consulting with peers is far more common.

Paywalls exist on 70 percent of daily newspapers’ websites, up from 47 percent in 2012.

Metered paywalls are common; a near majority (49 percent) of those with meters allow six to 10 free views before charging.

The study reports on a survey of 416 daily newspaper publishers or their designees.


Source: Jenner/Thorson/Kim (2014)

World News

TV

Article clusters


Sources: Piano Media, Leap Media Solutions, Media Manager‘s Club, Own research

Business Culture Local

Travel Lifestyle Sports

TRAFFIC

LOYA

LTY

CommodityAdvertising

FlagshipMetered Paywall

TrashNothing to monetize

Niche content most suitable for hard paywall

Specialized contentFinance, lifestyle, health, cars, hobbies, ...

Specialized coverageBusiness data, charts, market analyses, ...

Unique contentLocal/hyperlocal news, sports, reviews, ...

Exclusive content from behind the scenesEditorial sources, chat online with journalists, ...


Sources: Piano Media, Leap Media Solutions, Media Manager‘s Club, Own research

NicheHard Paywall

TRAFFIC

LOYA

LTY

EffectsEffects of metered paywalls

General “wisdom”:5 - 40% decline of traffic


Source: Statista, Piano Media

100%

50 – 70%

25 – 65%

1.3 – 6.5%

0.01 – 2.0%

Total visitors

Unique visitors

Unique readers

Readers hitting paywall

Subscribers

3 phases of a paywall launch:Overview



Pre-Pre-Launch Pre-Launch Post-Launch

LaunchIncrease # of readers Announce the launch externally Capture and retain customers

>3 months >3 weeks 3+ months

Action

Time

3 phases of a paywall launch:Detailed


Source: Vento (2012), Own research

Pre-Pre-Launch Increase number of readers: Emotional campaign showing clear new value of website, get goodwill, strengthen ties to (potential) customers. E.g., 3x unique users as a goal.Website updated, content-rich and valuable for customers>3 months before announcment

Pre-Launch Announce the launch externally: Open communication (internal+external), customers’ capability to understand, emphasize added value, both emotional + rational.Informed, converted customers without negativity>3 weeks before launch

1

2

Launch

Post-Launch Capture and retain customers: Strengthen emotional bond and rational appeal, detailed offering with easy payment mode(l)s and clear calls-to-action.Clear perceived customer value, retained customer base3+ months from launch

3

Pre-Pre-Launch strategy



Pre-Pre-Launch Reach the new reader target:1.More online readersEnhance both advertising and subscription incomeThere are people who appreciate the content but not in the printed formNew customers – always part of the target

Retain customers:1.Hold on to online readers2.More combination ordersThe wall mainly affects current readersNot to have online orders at the expense of print ordersReached easily through owned channelsBad timing for a large campaignPrint orders as the most potential target

>3 months before announcment

Message strategy:1.Communicate effectively online newspaper value2.Emotional appealEducate the audience: there is improved, valuable content online – quality journalism – the reason to read onlineComplementary online benefits differentiate from the print: fast updates– what happens now, mobility, improved user experienceReader contributes to the value: personalizing the serviceSame reading experience, newspaper and quality but now it can be read multi-channelPower to the consumer: no guidance to a specific reading formatInteractivity: reader perspectives and participation in the news processPartner advantages attract readersEmotional appeal: hyped and notedReaders relate to celebrities telling about their relationship with the newspaperInforms why the newspaper is interesting

1

Offline MediaOwn print paper, Other print papers, Local radio, TV, Own events, Outdoor advertisements, Other owned print material

Online MediaOwn website, Facebook, Google AdWords, Websites of group, Banners on other websites, E-Mail, Twitter

New and current readers

Pre-Launch strategy



Pre-Launch Communicate improved online contentEducation: content is valuable enough to be paid for – the fee is not laid on the old site but the new quality journalism naturally is not freeMore visible if simultaneous site reforms

Service and interactivityService in the online newspaper usage The point of views of the readers, participation in the news process increases

EqualityFair to the customers: no free-riders consuming news online without charge

Easy low-cost optionEasier (than in print) to become a customer

System explanationFamiliarize readers with the paywall

Justify and informTrustworthy, open, and emotional communication: motives and dates the process proceeds

>3 weeks before launch2

Offline MediaOwn print paper, Own and other events, Classic PR

Online MediaOwn website, Facebook

Current readers

Post-Launch strategy



Post-Launch Strengthen emotional bondEmotional campaign still continuedGood and effective CRM

Rational appeal: package informationInformative appeal changed: detailed offering informationEasy payment mode(l)s

3+ months from launch3

Offline MediaOwn print paper, Other print papers, Local radio, TV, Own events, Outdoor advertisements, Other owned print material

Online MediaOwn website, Facebook, Google AdWords, Websites of group, Banners on other websites, E-Mail, Twitter

New and current readers