I tweeted a link to this article about paywalls yesterday, but it’s significant enough to link to again. Although it’s about newspapers, there are major implications for magazines’ print and online product, and for how publishers generate revenue from each.
In the piece Clay Shirky argues that newspapers have always appealed to a broad audience ranging from individuals who are passionate about the paper (even about the paper as an institution) to those who picked it up for smaller aspects of the ‘bundle’ of information it included – they liked the horoscopes, for example, or the cartoons.
The web rips this bundle up. The people who like the horoscopes just read the horoscopes and ignore the rest of the content. If a chart is plotted by individuals’ article views a month, the distribution is hugely weighted towards those who read just one or two pieces. These people are not interested in the rest of what is on offer; they’ve been brought to the site by a link or through search, the piece has been read, the reader moves on. At the other end of the chart you have the passionate enthusiasts for the publication who read dozens of articles throughout the site each month.
Print publications have always relied on a mass/mass revenue model – a mass audience pays for the whole bundle (regardless of what is read), big advertisers pay to reach this mass audience. The challenge in the transition to digital was (and remains) how to make money – the mass audience that the mass advertisers want won’t pay for the whole bundle any more (look at the drop in traffic when paywalls have been introduced on newspapers); the readers who are prepared to pay to leap over the paywall aren’t in sufficient numbers to attract advertisers. As Shirky says, “The easy part of treating digital news as a product is getting money from 2% of your audience. The hard part is losing 98% of your advertising base.”
The ‘metered access’ paywalls, where a visitor gets to read a certain number of articles a month before having to pay, are the latest attempt to address this. Advertisers get volume from those who dip into the site for one or two pieces, the publisher gets revenue from the committed who pay for full access. But “a single fee-paying user will generate hundreds of times the revenue of the median, ad-viewing reader. This subjects the logic of the print bundle — a bit of everything for everybody, slathered with ads — to two new questions: What do our most committed users want? And what will turn our most frequent readers into committed users?”.
As I see it, the challenge is even greater than this and applies as much to magazines as to newspapers, and affects print sales as well as digital revenues. The two questions above beg a prior question: how does anyone becomes a “frequent reader” in the first place?
All print publications have, to some extent, been the ’bundle’ of information Shirky mentions, with different aspects of a title appealing to different people. It’s easy to see this in something as broad as a newspaper, but think about magazines, even specialist titles, and the model also applies. Publishers know that certain parts of their titles appeal to different readership demographics; some will pick up the magazine for the news, some for reviews of the latest kit, some for ’how-to’ guides, for interviews, because they really like particular columnists etc etc.
In the past someone might buy a magazine to read, say, reviews of a camera they were thinking of getting, but the chances are that they would also read much of the rest of the contents. You’d paid for what you wanted – the reviews – the rest of the content was therefore a bonus. If enough of that content was compelling enough, then there was a reasonable chance that you would buy another issue; this time not for the reviews, but because of other aspects of the bundle.
That’s how magazines built frequent readers/buyers and it’s why money was spent on content, on cover design, on promotions on the newsstand; hook the browser and reel in the reader. What’s important here is that publications didn’t just give readers what they knew they wanted, they were also giving them things that they hadn’t realised that they wanted.
This is where the digital availability of content has disrupted the model. Readers can now find the things they know they want for free – if I want a camera review then five minutes on Google will give me multiple sources that cost nothing – but readers only look for things they already know they want. No one looks for the stuff they didn’t know they wanted, or the things that are difficult, but good for you.
Magazines are suffering a squeeze offline just as great as that for newspapers; specialist print product is in danger of being priced out of the reach of the casual buyer (why spend five quid to read one magazine’s reviews, or over three quid for a couple of favourite columnists) and more general print product is increasingly irrelevant in a permanently connected world.
The really big danger is that we are approaching (for some, we have passed) the tipping point: there aren’t sufficient readers who know the breadth of a title’s content to be prepared to pay for access to it all (and by ’access’ I include paying for the print product). Yes, we might have increased page views by some huge amount, but these are casual, one-off visitors and chasing them is a treadmill that gets faster each day; we have more people who ’touch’ our product, but ever fewer that ’engage’ with it.
If we can deepen a reader’s engagement with the range of our content, to get them to read the stuff that is chargeable for – analysis, thought, exclusivity: things that aren’t freely available elsewhere – we have more chance of getting them to contribute towards the cost of producing that content. As Shirky says, “This is new territory for [publishers], who have always had head count rather than engagement as their principal business metric.”
Therein lies the challenge: how do we get people to want the things that they didn’t know they wanted?
I hope to return to this in the next few weeks.