With publishers desperate for income streams beyond the sub-par performing advertising model, the good old subscription model sticks its head back up. Nowadays subscriptions are part of a paywall solution and big news names like the New York Times use it in one form or another. The problem with paywalls is that you can access most of the content behind them by scavenging the web with Google, Bing or Yahoo!. You’ll find the same information, albeit scattered all over the place and perhaps not as easy to digest. When I asked Tinypass’s Account Executive Brian Carroll about his thoughts on this, he answered: “Big publishers are looking to diversify their revenue streams to include not just advertising or print subscription revenue, but also digital membership packages and premium subscription tiers. Large publishers with a blend of paid print subscribers and advertising revenue need to build seamless digital & print subscription packages, and do so in a way that preserves their online advertising revenue. So-called “Soft”, “freemium” or “metered” paywalls – paywalls that offer some number of free article views to new visitors and social referral traffic – help these publishers expose their content to new and casual visitors, but still monetise their more loyal or engaged audiences. That said, soft paywalls are less rigid and can often be circumvented by determined users, so publishers concerned with zero content leakage tend to prefer the “hard paywall” approach.”
So far only one serious European company is involved with paywall services: Piano Media. Both they and Tinypass sell the services needed to monetise your content, but each took a different approach when they first started out. Piano Media started top-down in its region of origin and is now exploring the worldwide market with success. Tinypass started out globally and is growing at a nice steady pace. Tinypass offered pay-per-post capabilities at first, while Piano Media started with an enterprise scale paywall solution that was based on the cooperation between newspaper publishers (aggregated content — subscribe once, access all).
Today, Tinypass offers about every type of content monetisation method you can imagine: hard paywall, sponsorship / Kickstarter-alike system, metered paywall, pay per video view/download in a partnership with Brightcove, pay for downloads (ePUBs, PDFs, etc.) with the company hosting your files for you, and more. Piano Media still offers the aggregated content paywall system but now also has regular paywall services as well as custom-created solutions. Where Piano Media and Tinypass meet each other is on the level of regular paywall solutions and probably pay-for-download systems as well.
Where they will remain different is in the philosophy behind the company. Piano Media first served the newspaper business more or less exclusively. Tinypass has been more accessible to small and individual publishers from day one. While Tinypass exploded its offering into many types of content monetisation, Piano Media has three “standard” solution types of which I bet even the Lite one will appeal only to the best managed one-man operations because it starts from a top-down managed enterprise view of tackling problems.
Plug-in or API
Having said that, Piano Media has clients in Western Europe and the United States, and is in talks with publishers in Asia and Latin America. In Germany, regional newspaper Die Neue Osnabrücker Zeitung is using the Piano Solo solution, which appeals to small publishers. In the US, Newsweek magazine is running the ‘entry-level’ Piano Lite solution. Piano Media’s David Brauchli, Business Development and Communications Specialist at Piano Media in Prague told me they just signed an agreement with a large regional UK publishing house and are implementing their solution with several Spanish and German newspaper groups.
Today, Piano’s system can be either metered, freemium or hard. A client may also use a combination on one site in a hybrid model. For example, if a newspaper wants to use a metered system but hard lock certain exclusive content, they can do so.
Where Piano Media differs the most from Tinypass is in its idea of what caters for the best solution. Whereas Tinypass is happy to provide easy to use and simple to implement (by yourself) plug-ins for WordPress, Joomla and Drupal, Piano has an authentication gateway that is installed in the publisher’s environment, requiring a competent IT team.
Piano is CMS agnostic. They do not touch the publisher’s content (but neither does Tinypass). On the contrary even. With a Piano system — if you want to allow editors to “override” the rules set in the system, for example to manage breaking news — you need to hook into an “exception API” used to allow the CMS to open content that is normally locked. With Tinypass’s WordPress plug-in, you can lock content based on tags. Creating a tag “news” and not adding it to the Tinypass paywall tag pool, solves the breaking news problem in a way that even I, a one-man show with no programming skill whatsoever, would understand.
On the other hand, Tinypass’s approach may become messy if you have a larger team of people who all have access to the CMS configuration. However, even with WordPress you can lock out specific “roles” from tampering with plugins and other settings.
Asked about Piano’s appeal to small publishers, Brauchli answered: “Our Piano Lite solution is designed to be implemented quickly and is reasonably priced. As long as the blogger has the IT knowledge to allow us to work with his caching environment, our system can be installed relatively easily.”
“A typical Lite project is up and running in six weeks due to the publisher having to determine the paid content strategy: meter rules, subscription packages and pricing, design and user communication, implementing API’s for authenticating paid apps, etc. The beauty of Lite is that the payment processing is outsourced to Piano and thus smaller publishers who don’t want to deal with e-commerce don’t have to.”
Piano Media is growing well, but it can’t be all attributed to its technology and business model, because so is Tinypass. Carroll explained: “2014 is like 1998 in some respects. Back then you had retailers trying to build their own e-commerce shopping carts in-house and spending lots of money on something outside their core business. Many publishers today are pursuing paid content business models and are discovering that building the requisite e-commerce software in-house is expensive and time consuming. Those publishers eventually become some of our best customers. And with more and more of the media market expanding beyond ad-revenue alone, we see the number of publishers interested in our software growing every day.”
Because of their bottom-up approach, Tinypass’s biggest competition is do-it-yourself. In-house IT teams often look at payment processors like Stripe and Braintree (on which Tinypass is built) and decide to start building directly on top of those. “Eventually these IT teams get into the complexities of user access management, business rules (like metering, promotions and trial periods), customer service (like confirmation emails and prorated refunds and tech support), and then data analytics and financial accounting, not to mention ongoing maintenance and upgrades. They soon find themselves having built a rudimentary version of the software we offer. We’d love to save them the headache,” Carroll said.
“A distant second in terms of competition are players like Press Plus, Cleeng, and Piano Media. We think our solution is easier, more complete, and more powerful, and our fast-growing roster of happy customers tends to agree,” he added.
Contrary to Piano Media, Tinypass does not necessarily develop a solution for you. The company delivers the API libraries as well as documentation and if you need help, you can get it — from many different sources. The knowledge level of the development team will determine how sophisticated and custom you want to get with it.
Content monetisation, the market and the income
There’s no uniformly applying rule to the income smaller publishers can hope to make from content monetisation. Tinypass says they’ve seen the whole range. “Some publishers have $800 downloadable research reports and have sold only two. Other publishers have $2 monthly subscriptions and make six figures a year,” said Carroll.
One factor that helps sell — or deter — potential buyers is the design of the pop-up or “curtain” size, position and design. Asked about how Tinypass defined the default settings for the curtain, Carroll answered: “We have a team of talented designers and programmers who’ve built hundreds, maybe thousands, of high-profile web sites over the last 15 years. After a lot of usability testing, we created a checkout experience designed to maximise conversions and cross-platform compatibility, but also maintain an elegant look and feel. Millions of people encounter our curtain a day, so it’s been field-tested.”
Even with all the hassle that additional technology implementations bring with them, both providers see the market definitely evolving further to paid models.
“An increasing number of newspapers, sites, magazines, B2B publications, multi-media sites are charging for content. We see publishers in the longer term focused on selling products as well as digital content. The paywall gives them access to user data that they previously didn’t have and it dramatically increases their understanding of their readers/users and their needs. Most likely some publishers will create membership clubs or loyalty programs to reward their most loyal, heavy readers who are purchasing their digital subscriptions,” said Brauchli.
“Major media has rediscovered the value of their brands as readers are increasingly confronted by a myriad of news sources, some of them designed simply to generate clicks and for advertising. Readers must be re-educated to trusting major media brands and must realise the costs to cover news comprehensively,” he added. Tinypass’s Carroll has a practical observation to add: the Tinypass team found pay-per-view in text-only formats to be somewhat less popular than subscription paywalls, probably because bundled subscription pricing can be simpler for consumers to understand.
Luckily for publishers, subscriptions have better value as well. But of all the above focuses entirely on the publisher and what he can get out of it. No paywall service provider can help to define what your audience really wants from you, and what they want to pay for. Perhaps the future of publishing is community investment, like what “De Correspondent”, the Dutch site that raised a couple of hundred thousand Euros via crowd funding. Their members are motivated by what these journalists promise to deliver and they have backed that idea by investing. However, even if this community model has proven to be highly successful, at some point in time even De Correspondent will need to implement a subscription model — no matter how deeply they are involved with what their members expect from them.