As the Times and Sunday Times announce healthy digital subscriber figures, Stephen George, business development director at Fonix, looks at the challenges of convincing consumers to access content behind a paywall
Last week the The Times and The Sunday Times announced they had surpassed 300,000 digital subscribers, showing the progress the publisher has made in attracting readers to its online proposition.
Total subscribers for the two titles print and digital products now stand at 539,000 and their websites boast 5m registered users. Digital-only subscriber numbers were up 19 per cent year-on-year, reaching 304,000 by the end of June – the most successful year since the paywall was introduced in 2010.
Paywalls are arguably the best thing to happen to the newspaper industry since its steady and significant decline in recent years. A combination of losing advertising revenue and a decrease in circulation, both due to, the behemoth that is, the internet.
Monetising content in the digital era
There are many different types of paywall model. One is the metered paywall: a pay-as-you-go system, up to the point where the consumer would be saving money if they paid for the full month. They then aren’t charged for any further visits to the website, making this the most cost-effective way for the customer to pay. This is typically employed by smaller publications such as The Scotsman, Scotland’s national newspaper.
Similar to this is the freemium or soft paywall model that offers free access to articles for a week or a month. The paywall appears when that time limit is reached, meaning the paywall only applies to the most engaged consumers, who are theoretically the most likely to pay for content. Some high profile publications will implement a form of free trial, such as the Financial Times, which offers one week’s access to its content.
Many paywalls exist to set up subscriptions because this is such a lucrative payment model. Not only does it have the initial income of the subscription fee plus the potential of a higher premium charged to advertisers based on the more accurate data gathered through subscriber profiling. There is also a longevity that accompanies this method as the average customer stays with a subscription for 19 months and 2 weeks, according to a study carried out by The Kite Factory.
The Guardian is unique in its donation payment model; either one-off or subscription based donations. Because its content is free, it offers a better user experience for those who pay the subscription. This method is similar to some newspapers who are trying to combat ad blockers by offering an ad-free service for those who pay a fee.
With all these benefits to the newspapers, there are few benefits to the customer, especially considering there is content freely available online – not behind a paywall. This is definitely an uphill battle for newspapers, with only 6 per cent of the UK population paying for their news content last year, and 69 per cent saying they were “very unlikely” to pay this year, according to a Reuters Institute report.
Conversely, savvy publications can make this very likely. The Atlantic, an American sports publication proved just that. With a focus on quality and high-profile writers from other established publications, it gathered a following committed enough that allowed it to offer a subscription-only model. The model has not only been established, but is thriving, with a plan of expanding globally that kickstarted in the UK in July 2017.
But even with a good payment model in place, whether it’s content subscriptions, a subscription to an app that provides a great user experience or gathering monthly donations; cart abandonment is still an issue.
Cart abandonment happens for a number of reasons. According to that Reuters Institute report, over 20 per cent of consumers are concerned about the payment process: 4 per cent of consumers said it was because making the payment will be too much hassle, 6 per cent were concerned it would be too difficult to cancel the payment and 11 per cent don’t like handing over their card details online.
So what are you going to do about it?
It’s not a case of building a paywall and the consumers will buy in, the reality is: build a paywall and convince consumers to climb over it.
We’ve seen that mobile carrier billing is widespread across music, gaming and digital subscriptions, with the likes of Spotify, Google and Microsoft integrating it as a core payment mechanic within their paywall – the payment is simply charged to the consumer’s mobile phone bill.
We know that mobile carrier billing has the capability to increase conversions in digital baskets by anything up to and over 30 per cent, so why not across news media too?
Carrier billing lends itself well to impulse, effortless micro-purchases. There’s no need to get a credit card out – perfect for a paywall halfway through an interesting article or getting access to the column that’s gone viral.
Newspapers have built the paywall, now they need to get readers over it.