Why Time Inc.’s paywall strategy works, and why other publishers should pay attention

July 8th, 2010 by Chris Hogg Leave a reply »

In the media landscape today, many online publishers are toying with the idea of paywalls whereby they ask readers to pay to consume content, or they give them a few pages free before asking readers to fork over cash to continue reading.

The problem is consumers have become accustomed to getting content online for free. The biggest challenge for paywalls has always been: Why would a consumer pay to read content on one website if it’s free elsewhere?

So if you’re a publisher who suddenly implements a paywall, you’re almost definitely going to see a drop in readership. Furthermore, I believe there’s a long-term hit to your online brand. That is, of course, if you follow traditional paywall-building tactics. Time Inc.’s strategy, I think, is much smarter.

First, let me say Time‘s paywall strategy is not new. For those of you who are not familiar with the announcement, MediaPost describes it:

“The full versions of print content are available only to print subscribers or people who purchase the $4.99 iPad edition of the magazine; other online visitors see an abridged or abbreviated version of the print content, with a note explaining the subscription requirement.”

Sounds like a typical paywall, right? It is, except there is another element to it. As All Things D reports, Time has a two-pronged approach when it comes to its content. As Time Inc. spokeswoman Dawn Bridges told All Things D:

“We’ve said for awhile that increasingly we’ll move content from the print (and now iPad) versions of our titles off of the web. With People, we haven’t had hardly any content from the magazine on the web for a long time. Our strategy is to use the web for breaking news and ‘commodity’ type of news; (news events of any type, stock prices, sports scores) and keep (most of) the features and longer analysis for the print publication and iPad versions.”

Time‘s strategy is not the typical paywall where content is put behind bars. It’s a strategy that offers something to everyone, and it’s clearly defined. The strategy, combined with clear communication about what’s being offered, is more likely to be understood and accepted by consumers.

Time is making an important distinction about what to expect in print and what to expect online. Having breaking news, or commodity information online allows Time to address the needs of online consumers looking for free information. It also gives the company the opportunity to up-sell readers to the printed or iPad edition.

This up-sell (read: Freemium) model is not new, but Time‘s spokesperson has done a good job of very clearly defining the company’s goals. In the world of paywalls, where consumers are left confused about what’s free and what’s not, clear communication should translate into actual sales.

From both a sales and brand-reputation standpoint, Time‘s paywall strategy is far more effective than other paywall experiments because it doesn’t leave the consumer frustrated or disappointed. In many other paywall experiments, the reader visits the site and can consume a few pages per day before they’re hit with a big fat stop sign telling them they need to pay to continue browsing. That strategy won’t work unless the publisher has a very strong brand, or highly specialized or niche content. Readers who are slapped in the face with a stop sign will likely go elsewhere and not return to the publication if they learn they can’t view any content. It’s a lost opportunity for the publisher.

In Time‘s case, however, there is content that comes without a paywall, and it’s more than just a few pages. Time will provide the daily digestible news on its website for all readers while at the same time offer more for those who care to purchase it. This small difference has a tremendous impact in how the reader interacts with the brand; instead of being told to pay to keep consuming, Time directs people to content they can consume freely while at the same time offering additional info for those who want to fill up their news plate.

Assuming Time provides enough free content, its website traffic shouldn’t drop off a cliff and it gains more opportunity to convert website visitors into paid subscribers. If it places the right buttons in the right places and clearly communicates its offerings to consumers, it should be able to convert unpaid visitors into paid iPad or print subscribers.

This is the new world of freemium paywalls, and it’s incredibly simple. It’s what online publishing should have been 10 years ago as publishers struggled to figure out how to bring their brands online. The Internet is different than print (or iPad/eBook consuming), and thus needs to be treated differently from a business perspective.

Time‘s strategy, coupled with clear communication about what it offers should translate into higher conversion rates than existing paywall experiments where the reader is told to pay up or get out.

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