You Can’t Subscribe to Everything

That the news industry is reeling is not a matter for debate. And if there is one data point that should focus the mind for its executives — and for anyone who cares about journalism — it probably is this: for most outlets, most readers arrive from other websites, search results or social media shares.

Let’s look at my hometown paper, the Philadelphia Inquirer. According to the web analysis service SimilarWeb, just under 41% of its page views come from users directly intending to visit the site — and 47% come from search. The picture is similar at the mighty New York Times: 36% direct, 38% from search, and another 22% from referrals from other sites. You’ll get similar numbers everywhere, with about 5% of readers arriving via social media links shared by friends.

Now think of what this means in an era where sites are putting up paywalls. Increasingly, people are innocently crashing upon pages containing content they want to consume but with only a small (if any) attachment to the site (since they did not actually start there). They want to see a single piece of content and are jarringly asked to subscribe. It’s safe to say most will not; the publisher sees no money, the user experience is harmed, and time is wasted. Google, Facebook and Twitter are not well served as well.

This used to never happen in the early days around the turn of the century when publishers were betting on advertising. Some actually thought the web would be no more than a marketing tool for print editions.

Around 15 years ago, as the unviability of print was coming into focus, sites began to try diversifying online revenues. Only a few succeeded — the truly distinctive, with prosperous and captive audiences. It was limited to truly top-tier sites like the Times, the Wall Street Journal, the Financial Times and the Economist. Part of the problem was the inconvenience of charging online: it was too clunky back then to justify the effort for a single piece of content.

By now other web properties have siphoned away most ad dollars; Facebook and Google make more in ad revenue that the top 10 media firms combined — and the pie has not grown by enough to make this anything other than catastrophic. Meanwhile, global newsrooms have cut all the fat they can; any more would risk a death spiral, with the product suffering to the point of collapse.

So paywalls are becoming ubiquitous. USA Today has one, increasingly many local sites have one, Nikkei in Japan to the UK’s The Telegraph and Haaretz in Israel have one. A recent study in seven key countries showed the average price of paywalled news comes to around $200 per year.

And the direction is crystal clear: soon most and perhaps even essentially all links will lead to dead ends. Most users trying to read one article will be asked to subscribe to publications they have no actual intention (except if presented with another link) of visiting again.

Call it the “share-fail” or the “link-fail.” It will account for the majority of our news experience, and no little of our social media experience.

Publishers who have been so hammered by the internet can be forgiven for a moment of triumphalist inflexibility: Let them all subscribe! But this cannot be a long-term solution for a future in which content online ceases to be free. Subscriptions cannot be the only door through the wall. We cannot subscribe to everything.

There will need to be an answer. The market will demand it. If none is provided, users will drift away and only a few content providers will survive.

One model of emerging solutions relates to services that offer many subscriptions in one bundle. NICKLPass (full disclosure: it is a client of the Thunder11 comms firm where I am a partner) offers a heavily discounted blend of subscriptions via participating employers. Another, Readly, also offers access to paywalled sites they have struck a deal with. A third, Blendle, offers per-article payments for content it has curated from many sources.

This model is similar to the solutions currently being envisioned to resolve the problem of streaming services; who can subscribe to all of them? Increasingly, platform providers associated with TV makers can be expected to provide access to Netflix, Disney, and the like, perhaps with cost being a function of how many services you have chosen. In this way they will enable Netflix and its cohort to extend their footprint with no marketing cost, but at reduced marginal revenue per user. It is, in a way, analogous to cable services that in the simpler era of two decades ago let you choose to “add” HBO or Showtime.

Some believe that as the impossibility of subscribing to everything sets in, and as competition grows, the idea of charging per item will also arise again.

Versions of it might allow you to buy a day pass — analogous to the act of buying a newspaper, back in the day. One can imagine paying for a slice of the pie — say, just the sports section or a month of one’s favorite columnist.

This idea, often referred to as “micropayments,” has been fiercely resisted by publishers who feared cannibalizing (or cutting into) their subscription revenue.

The reliance on subscriptions was enabled by a decline in user resistance to subscriptions, which resulted from the introduction of easy payments online. The ubiquity of paywalls may revive some of that resistance.

Look at it this way: the acceptance was never really for subscriptions but for payments. To maximize the revenue, publishers may need to be more clever about how they charge. And it may involve collaboration with social media.

The principle is the important thing: information does not, in fact, want to be free. Good content is scarce, and scarcity has value.

(This article appeared originally in Mediaite)

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Dan Perry

Dan Perry

Author, entrepreneur and technologist who led the Associated Press in the Middle East, Africa, Europe & Caribbean. Working on solutions to help media thrive.