Pay For Play In The 21st CenturyDecember 10, 2012
By Alex Weaver, Account Director
As revenue from print advertising continues to decline, many publications (and the respective media companies behind them) are exploring pay walls as a way to increase revenue generated from online and digital content.
And it isn’t exclusive to longstanding print publications like the New York Times and Wall St. Journal. More and more websites are jumping on the bandwagon to monetize content and move away from a reliance on advertising and sponsored content.
While a pay wall can free media and publications from a reliance on ad spending and sponsored content, the marketplace is key. It seems like a pay-to-play/read/listen/watch model is most successful when the content is original and can’t be found on a thousand other websites. Current readers and potential subscribers will be more willing to open their wallets if they can’t find the offerings anywhere else. Otherwise they’ll take their eyeballs to another site, probably somewhere free.
Take The Daily Beast. Last week, a spokesman announced the company is considering charging for access to Daily Beast, described as “a smart, speedy take on the news from around the world, combined with the depth and investigative power of Newsweek Magazine.”
I would assume the site would operate under a metered pay model, probably 10 articles a month for free with any additional reads requiring a subscription.
But will people pay? Part of me doubts whether the content is enough to support a pay wall model. There’s serious potential for the switch to be the kiss of the death to the site, especially if the company’s financial sustainability relies on a pay wall and traditional web advertising. A pay wall may lead to lower traffic, decreased performance on ads and can create barriers for reaching new readers and subscribers because site exploration is limited.
Last November, the popular music blog Daytrotter switched to a subscription-based model and placed the site’s cache of recorded live music sessions behind a $2-per-month pay wall. The concern isn’t the cost – I’m sure most people can find $2 in their couch cushions or jacket pockets. The concern is the marketplace. Music websites and blogs exist in a crowded space. The latest tunes, downloads, exclusive videos and music news is widely available, for free, on more sites than I can count.
While Daytrotter offers downloadable music content to subscribers, it’s not the only music website offering downloads and live performances. Audiophiles and music lovers have many options when it comes to online music news, so much so that the audience gap between Daytrotter and top music sites Pitchfork and Stereogum is vast. Daytrotter was pulling approximately 15,000 unique monthly views before switching to a pay model and its numbers have been on a downward trend over the past 13 months. According to Compete, Pitchfork and Stereogum had nearly 250,000 combined unique monthly views in the past month. Daytrotter had slightly more than 7,000 unique monthly views.
A pay wall may offer some financial independence from digital advertising for The Daily Beast and other websites, but it’s interesting to note Daytrotter’s downward trend in readership. The online news marketplace is similar to the music marketplace Daytrotter navigates: crowded and rife with competition. It’s harder to get people to pay for online content because there’s typically always another option.
The Daily Beast decision-makers could take a lesson from Daytrotter. If they move forward with a pay wall, maintain readership and reward subscriber loyalty with original content. It could be offering an e-zine on a monthly basis with guest editors or an iPad app. Daily Beast editors could preview an upcoming novel with a free download for their subscribers before the book is released, include video interviews with musicians or politicians, and offer exclusive photo galleries. It’s an easy way to provide content subscribers find valuable and strengthen loyalty.
What about you? Would you pay to read The Daily Beast? What would convince (or has convinced) you to subscribe to a website with a pay wall?