Interesting conversation with Alan Murray of the Wall Street Journal and Alan Rusbridger of the Guardian (UK paper) about whether to “pay wall” or not to “pay wall” on “On the Media” this weekend. Good follow up to our discussion on the NY Times’ pay wall plans last week. I think Murray gets it right. News and media companies need to understand that they can charge for content, but only content that they alone can deliver and that has unique appeal to their audience (for WSJ it’s business news, tools, insight). How can you better deliver unique information, service, or products to your key audiences and monetize them appropriately? Keep the conversation going in the comments section or on Twitter, #ThinkSuccess.
Newspapers are dying. At least that’s what everyone says. And there’s ample evidence to believe them – 12 daily metros gone, 8 more have dumped their print editions. Monday, the Wall Street Journal’s Russell Adams reported the NY Times, the world’s largest and most respected newspaper, plans to combat its significant financial losses withan online paid subscription model. This “Pay Wall” will charge heavy users (to be defined) $10-$20 per month depending on whether they access NYTimes content from the web only or also from a mobile device. The plan will make the Times money, a lot of it actually. But long term, this model will erode readership, limit growth, and squander a terrific opportunity for the Times to lead the next generation of news companies.
Traditional newspaper circulation is evaporating (according to its own data, the Times shed nearly 9% of its weekday readership last year). The revenue from paid subscriptions and print advertising is also drying up. Meanwhile a little over 30 million unique users visit NYTimes.com every month according to Comscore, Inc., making the Times the largest online newspaper in the world with online revenues accounting for $100 million a year (nearly 30% of total revenue). But online revenue isn’t growing fast enough to compensate for the lost traditional print money.
Assuming 10% of the 30 million monthly users (that’s 3 million for those of you doing the math in your heads) start paying $20 for a subscription, that represents (I’ll give you a second to calculate) $60 million per month in new revenue. That’s the kind of new revenue that makes top level executives giddy. But what happens if many “light users” migrate to other news organizations like CNN, NBC, or the Washington Post that equal the Times in quality and timeliness, at no charge? Same can be said for mobile users (I have both the CNN and NYTimes apps for iPad and the breaking news push notifications come literally at the same time. Plus CNN has more content and more video). Online readership won’t evaporate, but it won’t grow as quickly as it would in a free model either.
What if you could do both? Grow your overall audience AND better monetize the 10-15% of heavy users (your “Tribe,” as Seth Godin would say). What if you could do both PLUS grow interactions and feedback valuable to your advertisers while literally improving the quality of your organization’s news operation? You’d want that, right?
The Solution: (humble, I know)
Keep NYTimes.com free.
Focus on the great reporting you do. Be open with all of the “news of the day.” Have a clear business goal of increasing readership and monetizing that traffic with online advertising. This should continue to grow for the next 20-50 years (as older print generations die and younger online generations get introduced to the NYTimes – get ready for the day when newspapers are online only, it’s coming).
Charge $4.99/month for basic NYTimes iPad, Kindle, iPhone app
Push the main stories into the app, the way it’s designed now. There’s very limited advertising, and mobile device users are used to paying for content in low cost denominations like this (thank you iTunes).
Develop Premium Subscriptions
ESPN.com really does this well with their “Insider” subscription. Take a page from that book. Offer exclusive content like food guides, movie reviews, extra video, exclusive interviews, specific columnists, whatever you think is premium non-“news of the day” content. NYTimes.com has some great video blogs about travel. Those should be in the premium subscription – $10 to $20 per month.
Then go to the next level
Do more than just set aside some premium content. Make these subscribers part of your organization. Invite them to give their opinions and insight on your news coverage as an oversight board. Give them access to chats with editors, reporters, etc. This tribe is filled with news addicts. They’ll want the chance to talk with Thomas Friedman. When you have a big interview coming up, give them first shot at what questions to ask. Make them a part of the news room. Even ask them what stories they want covered. How cool would it be for the NYTimes tribe to have their own correspondent who they could decide where to send next. Maybe they want more in-depth reporting on the democratic revolution in Tunisia, send the correspondent with reports ONLY for subscribers.
Thinking about how to better empower, interact, and build a relationship with your biggest fans will open up all kinds of great opportunities. Let them lead you.
Offer discounts on the monthly subscription in exchange for subscribers answering marketing questions about themselves, about brands they like, about new product trials, etc. Offer advertisers the chance to float special offers to this group and get their feedback. Offer advertisers highly premium, low inventory ad units to subscribers (only 1 ad per page if that, don’t anger your tribe).
What could this mean for you?
How do you empower your best customers, clients, students, guests? How do you monetize them better while building a more meaningful relationship? Do you set up barriers between yourself and your tribe like a “Pay Wall”? Maybe you require your consumer to fill out an info form in exchange for a mailed packet, a webinar, etc. Maybe you require a customer’s email address to have access to specific information. How could you provide more value and interaction to your best customers in a way that deepens your relationship, grows your revenue, and teaches you more about how you should act as a company?
Seriously, I’m asking. Feel free to comment below, on Twitter (@Triad_Ideas or @RilesOnAir), or by email firstname.lastname@example.org. Interested to hear your take!