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Paid content: What to consider before you charge

While dozens if not hundreds of newspaper publishers around the world began charging for their digital content in the past year, thousands more are in the process of deciding if they should charge, and if so, how to go about it. Should you charge? If so, should you charge for all content or only some content? How should billing be done? When asking such questions, there are four major areas that should be considered before a publisher makes a decision: Audience, Content, Platform, Paid-for models and systems and Payment type.

Audience

We should start by answering the question: What is the quality of our website audience? While we might sometimes try to impress our advertisers with the number of unique visitors we have coming to our site each month, the UV number is not a good gauge for deciding whether to charge for digital content because often the majority of these visitors are fleeting and they come to our site only a few times per month. When you talk about monetising, then these “occasional” (2-3 visits a month) and “fly-by” visitors (once a month) are not relevant. Instead, we need to focus on our “regulars” (one to two visits per week) and “fans” (more than two visits a week). Traffic-wise, the minority of visitors really provide the most traffic to most websites, and this is something we must take into account in trying to determine how many potential customers we are likely to have.

Picture 1: Components of a paid content concept

Content

In order to charge for content, publishers must also have a steady and substantial supply of content that is not freely and easily available elsewhere. People simply will not pay for something they can get free by making a couple of clicks with their mouse. For example, people are more willing to pay for niche content, databases and archives than they are for articles about current affairs or features. Likewise, people will pay for something that perceive to have added value. For example, if we look at Slide 2 below, we see consumers find added value through better quality (additional scope, more tailored, greater depth, quantity), or if paying for something makes it more convenient (easier to access, for example).

Platform

In the recent past, publishers mainly considered only their websites when they considered charging for digital content. However, in the past year, we have seen huge growth in both the numbers of people buying tablets and mobile smartphones in many parts of the world, and each of these platforms are expected to see strong growth levels continue for the foreseeable future. A good paid-for digital content strategy needs to also address delivery and pricing to these platforms.

Paid-for models and systems

Two basic paid-for models are currently in use at various publishing houses. The first is the subscription model, which is the most popular and can be broken down into four types: Site subscription (where a user must pay to access the website at all); Metered access (where a limited amount of material is free, after which point a subscriber must pay); Premium Access (separate content bundles) and Apps download (these also involve separate content bundles). The second is pay-per-use or pay-per-article. Related to this is the consideration of which forms of payment to use. Invoice? Credit/Debit card? PayPal? Clickandbuy? Ultimately, the form of payment needs to be a solution that is flexible (so the customer has a choice), where data is secure and private. Furthermore, the transaction should take place quickly so the user has instant, or nearly instant access to the content he or she is paying for, and there must also be some form of customer service in case of difficulties.

Picture 2: Value adding elements

Picture 2: Value adding elements

Pricing

Lastly, the issue of pricing needs to be carefully decided, and studies have been done on this topic. For example, Boston Consulting Group interviewed more than 5000 people in nine markets (including the US, UK, Australia, Germany, France, Spain and Italy) found that while people say they are willing to pay for news online, most of them are not willing to pay very much for it (around US$ 5 per month).

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