Two recent events in the media world lend validity to the argument that online content isn't yearning to be free—at least not all of it.
First, The New York Times finally implemented its pay wall last week. Second, Journalism Online, a company dedicated to helping publishers get paid for their online content, was acquired in March by printing giant R.R. Donnelley & Sons Co. (Financial terms of the deal were not disclosed.)
”I think the religious debate over the pay issue is now over,” said L. Gordon Crovitz, one of the co-founders, along with Steven Brill and Leo Hindery, of Journalism Online. “The data are now in, and the data say publishers can have a paid model and keep all of their online advertising revenue—and keep all of their readers month to month, and over time convert 5% to 10% of online visitors to pay for full access.”
At the center of Donnelley's acquisition is Press+, Journalism Online's technology that enables publishers to integrate a paid-content engine that offers audiences a mix of free and subscription-based content with their websites.
“For Donnelley, with its 60,000 customers stretched from healthcare to financial services to real estate to telecom, the Press+ digital pay system adds another buckle to its value chain,” wrote Ken Doctor, an analyst for Outsell Inc.
With its new pay wall, The New York Times is making its second attempt at charging for content online after abandoning the Times Select approach, which placed some content behind a pay wall, four years ago. The Times' new digital subscription plan is similar to what Journalism Online has championed: a metered model that allows users free access up to a point.
After viewing 20 online editorial items within a four-week period, users will be asked to pay $15 to $25 per four-week period to access more stories, videos and slide shows. The price depends on the number of devices on which the user wants to access the Times.
The Financial Times pioneered the metered model in 2007 when it started charging heavy users of online content. An FT spokesperson said, “Last year, we experienced record growth in online subscribers, double-digital growth in online advertising, and overall digital revenues grew by 47%.”
The metered model's attractiveness is that it doesn't cut into online traffic, allowing media brands to generate advertising revenue. At the same time, it also provides subscription revenue and the opportunity for higher CPM advertising aimed at highly engaged—that is, paid—users.
The question remains how much relevance this has for b-to-b media companies, which have traditionally relied on the controlled-circulation model, a euphemism for free content.
Reed Business Information's Variety is a rare paid b-to-b magazine that also places its website behind a pay wall, which it set up in 2009. “Traffic is really not our primary concern, but, yes, the number of paid users is up,” a Variety spokesperson said.
“We originally said if we had no new subscribers through our pay wall we would still consider it a success, as it's about providing the people that already pay the access they need and content they want. However, we have seen over 2,000 new subscriptions come through the pay wall alone, which has been an added bonus and very telling.”
Variety.com employs its own version of the metered model. Users can view three pages a month before they're asked to register and another two pages before they're asked to subscribe.
Ed Fitzelle, managing director of Whitestone Communications, said brands like Variety are unusual in business media. “Unless there is real scarcity—you are the one and only, unique source of the information you publish—then paid circulation in b-to-b is a red herring,” he said.
“Who cares if you get a million unique visitors to come to a publication if only 5,000 of them, worldwide, would ever even consider buying the products that are advertised in it? So I don't think the paid model has a future in b-to-b the way it always has and probably always will in the b-to-c world.”