By: Geeq on Aug 26, 2021
Three decades of the world wide web have not been enough for news publishers to figure out how to survive in the digital age. Maybe the problem was that catchy but ambiguous slogan, “Information wants to be free.” Maybe it was the expectation that the long established business models for print journalism would work just as well online. But it’s become clear that neither advertising nor subscription paywalls are delivering the revenues needed for a healthy industry.
The expectation of free content was set early on, but online advertising prices are extremely low and under constant downward pressure, with many internet users installing ad blockers (Hootsuite research puts the global proportion at around 42%) and big brands slashing their spending on digital ads. Meanwhile readers are hitting subscription fatigue. With monthly payments becoming common for everything from music to software, customers are overwhelmed and unable to commit to yet another subscription just because they have hit their limit of free articles. Sure, a handful of papers with global reach – such as the New York Times – are successfully shifting their earnings base from advertising to digital subscriber revenue. But their success often comes at the cost of local or regional papers, since customers are likely to cancel an older subscription in order to afford a new one.
Can articles be sold as singles?
The obvious solution would be to charge readers per article. But this idea raises equally obvious problems.
For starters, no customer will spend a minute or two entering their login and payment details just to satisfy a casual curiosity. For micropayments to work, they need to be frictionless; but a pooled solution such as Axate faces the great difficulty of getting many publishers to commit to one platform. How can users be empowered to access single-portion content quickly and easily without either publishers or readers being locked into a single ecosystem?
Fortunately, the advance of technology has a way of resolving problems on that level, and attempts are being made. A number of apps have popped up to offer readers access to a wide range of participating publications. Dutch startup Blendle, which sold individual articles with a satisfaction-guaranteed refund promise, was particularly hyped. Unfortunately, despite a promising start, the app failed to make money and Blendle ultimately pivoted to – what else – subscriptions for a daily selection of articles.
Journalists, though, have deeper concerns: chief among them the fact that – as baldly set out in the Columbia Journalism Review– “no organization… can produce only hits.” That is, readers may only want to pay for the “best” articles, but that is not how newspapers are made. Each issue comprises a wide range of subjects and different kinds of articles, from news and sport to opinion, features, reviews and more. Some of those are cheaper to produce than others. Some have more social media appeal. The actual value of any individual piece is not easy to determine, nor to convey, since they all depend to some extent on the context of the whole.
It’s also important to consider that from a publisher’s perspective, direct subscription revenue isn’t the whole story. The price of a publication’s advertising space depends on subscriber numbers (especially those who also receive the print issue). So when customers choose to buy a single article rather than subscribe, it can have unpredictable knock-on effects on ad revenue. Given these considerations, can pay-per-click really pay-off?
Psychology holds the key
The traditional subscription model has already failed. It is perhaps pointless to dwell on the drawbacks of micropayments in comparison when readers have long since moved on. Articles are already consumed individually, even by subscribers. Consumers have given up on subscribing to most of the publications they would like to read. It’s time to rethink the lessons learned.
Blendle may have struggled to make pay-per-click work, but it did prove two crucial points. First, it attracted new, younger readers (who do not typically buy subscriptions), rather than cannibalizing existing subscribers. And second, it showed the market what kind of content was considered worth paying for. Refunds were commonly requested on clickbait articles, where the headline wasn’t backed up with substance. Users, it turns out, are happy to pay for quality journalism.
This lesson is further demonstrated by The Guardian’s groundbreaking model. It eschewed a paywall, and enlisted reader support to turn around a 20-year loss-making streak. The ongoing appeal to readers has two distinct strengths, both of which contain relevant lessons. First, readers are free to choose how they contribute (annually, monthly or just once), as well as how much. (Like many charity websites, the contribution page offers various suggested amounts as well as the editable option “other”.) Second, it relies on a psychological, not economic argument.
The choice of which newspaper to subscribe to isn’t just a rational one; it is layered with highly emotional questions of identity. A customer may see themselves as a Guardian person – not just a Guardian reader – and feel a personal stake in that paper’s survival. This emotional motivation can also be seen in the rise of platforms like Patreon, which invite users to contribute a small monthly fee to support their favourite writers, artists, musicians and so on. As with Guardian membership, these commitments are driven by loyalty, identity and perhaps a little altruism – not pure utility. Crucially, the platform also makes it easy to pay small amounts, which lowers the mental barrier as well as making it more affordable. Any pay-per-click model for journalism must exploit these factors to work with, not against, consumer psychology.
The only question is how
It’s clear that journalism as an industry needs subscribers. Pay-per-click can’t be designed as a replacement for that – the price would be too high to be acceptable to readers, and no doubt certain kinds of content would become unviable. But surely there is a way for individual article sales to support subscription revenue, rather than undermine it.
Perhaps it’s time to rethink free-to-view article quotas? Most sites allow visitors three or four articles each month before the paywall comes down. Writing in Forbes, crypto commentator Alastair Johnson argues that these publications are leaving money on the table by not monetizing their occasional visitors. In other words: use seamless micropayment technology to pay for every view – and he proposes a price cap, beyond which readers would enjoy an automatic subscription upgrade. That does leave all the benefit on the side of the reader, though, and none for the publisher. An alternative might be to invite the reader to subscribe, once they have hit that level. That would foreground the value they are already getting from the publication (so many articles read this month!) and encourage them to support it in future, but it leaves the choice open. Maybe they’ll read less next month, after all. The reader is still in control, but the newspaper has opened the door to a stronger relationship.
Reviewing all the evidence, it’s possible to glean a few rules of engagement for pay-per-click publishing.
- Execution is critical. Publications must be free to implement their payment layer independently, and collecting payment must be smooth, fast and commitment-free. A cryptocurrency solution such as Geeq bearer tokens lends itself particularly well to this problem, since the tiny transaction cost makes super-low prices viable, and the payment layer can be applied to any interested publication without the need to collaborate with rivals. Since customers are equally free to spend their tokens anywhere (including on other digital goods, such as videos or music), to send them to other wallet bearers or exchange them for fiat currency, there is no commitment.
- Paid content must be worth paying for. It is likely that some kinds of article, such as straight news, should remain free; it will always be easy to find out what has happened without paying. Intelligent analysis, however, will be valued.
- Subscribers may be best recruited once they have been convinced of the quality on offer, by offering options. That could mean a price is suggested, but they can change it, as is familiar from digital content platforms such as Bandcamp. A subscription could be proposed once they view a certain number of articles, but not forced. There could even be a refund for disappointing content, as Blendle implemented (with perhaps a monthly cap on the number of refunds allowed).
- Remember the role of loyalty. Publications that are well differentiated, with a high level of reader identification, will be best placed to convert casual readers into subscribers.
The only sure thing at this point is that publishing is in dire need of a new model. Emerging micropayment technology has the potential to finally enable pay-per-click readership, offering an alternative to the diminishing returns of traditional subscription and advertising models. But publishers will need bold, creative thinking to leverage that tech for a viable business model. Let’s see who is up for the challenge.