Slovakia and Slovenia are both trying something interesting – nationwide paywalls covering all the major publications in each country.
The prices are modest – 3 or 5 euros a month – and while the paywall spokesman in the article talks the usual guff about re-educating consumers so they expect to pay for content (like they’re puppies needing to be house-trained or something), it raises an interesting question – Could NZ’s news sites band together and hoist up their own paywall?
Like Slovakia and Slovenia, NZ is a country set apart from its neighbours, with local news from only a handful of major media outlets. They all have small populations too (Slovenia has 2 million people, Slovakia 5.4 million, and NZ 4 million).
If all NZ major news sites banded together, would people pay $10 a month to read their content?
That’s not the right question, of course. The question is, would enough people pay to offset the lost ad revenue from the people that won’t? The answer to that depends on the publisher and content, but as other paywall experiments have shown, if you only keep some content locked up (or locked up after a certain number of visits) your ad revenues don’t have to be hit much at all.
There’s probably about 1 million people in NZ looking at online news every day (that’s a rough estimate based on the numbers I’ve seen lately). If 5% pay $10 each month, that’s $6m a year in revenue, shared between all the publishers. Not huge numbers, but nothing to sneeze at. Though I should point out that the Slovak paywall only brought in 40,000 euros in its first month (that’s only about NZ$1m annually) – so my estimates may be a bit high.
By major news sites, I mean Fairfax (owner of Stuff.co.nz and smaller sites), APN (owner of NZHerald and smaller sites), TVNZ, and maybe TV3 and RadioNZ. (the usual disclaimer applies – I work for Fairfax)
And if a lot of the more generic popular content – eg Justin Bieber stories, world news, car crashes – is left outside the paywall, ad revenue won’t get hit much at all. All the paywall revenue would be additive.
Of course, Slovakia and Slovenia have one major advantage that NZ lacks – No one outside those countries is producing much content in Slovakian or Slovenian.
In NZ, where everyone speaks something like standard, it’s much easier to get content from overseas to entertain, educate and inform you.
Paywalls also face the HuffPo problem – a quick summary of an article is good enough for many people, which cuts substantially into the proportion of your readership that would pay.
But a key feature of the Slovak and Slovene paywalls is publishers get to choose what stays inside and what is freely available. That means content like breaking news, and commodity content like overseas news, can still be given freely. So can social shares, as the New York Times did with its paywall.
I expect that in NZ “news” as such – that is, the happenings on the day – would large stay outside the paywall, especially national news. Insight, analysis, blogs, local news, and features – the kind of content that’s hard to summarize anyway – gets locked inside. Publishers would summarize their own premium content, using short blurbs and news stories to link to paywalled content that offered more.
There are risks of course. Paywalls encourage cheaters, especially if they’re hard paywalls (meaning no free visits or content). It’s easy to pull a HuffPo and start summarising the competition. But by using metered paywalls or selective paywalls, this risk can be minimised. Also, NZ simply is too small and too varied for an aggregator to thrive.
But the content they’d choose to summarise is exactly the kind of mass-interest content that would likely be kept free anyway. They’d have to summarise the other kind of content, which is much more difficult, because it’s a long tail problem – lots of articles published each day with only a few thousand readers each. That takes a lot of staff, which costs more money for a much smaller increase in page views, which is why summarisers won’t do it.
For opinion/analysis pieces, summarising these is possible but it’s also a marketing tool for bringing readers to the competition – since the original site would have all the aggregators’ other stories for free anyway. We’re not talking HuffPo vs NYT. It’d be more like HuffPo UK vs Daily Mail.
So a metered or selective nationwide paywall for major NZ news sites seems completely doable to me. What’s your take?
Here’s an early Christmas presents for my fellow analytics nerds.
In my last post I talked about how the goal of online media during a big story is to draw in lots of new readers, then convert as many as possible into regular readers.
By hacking around with the year’s data, we can get a rough idea of this in New Zealand. I’ll just warn before we go on, this is completely unscientific, and while it can give you a sense of what’s going on, it’s not the kind of data you can draw strong conclusions off. That’ especially true for the small sites, where traffic can swing quite a lot from small events. Correlation does not equal causation.
With that warning out of the way, here’s Average Daily Unique Browers, NZ only, which gives us a good estimate of how many people are checking a site each day. All data publicly available from Nielsen-NetRatings Market Intelligence, and the usual caveat – I work for Fairfax Media, which owns Stuff.co.nz.
First, here’s the traffic before, during and after the Feb quake (week starting Feb 21). Watch in particular the % change after and % change during.
2011 is drawing to a close and boy howdy, what a smacking year for New Zealand’s online media.
First off, there was the Christchurch earthquake. Then there were tsunamis, more earthquakes, crazy weather, Rugby World Cup, and, of course, the tragic, tragic tale of Kim Kardashian’s marriage breaking up.
Commercially, this kind of “big news” matters less in the short-term for online media than for print newspapers. That’s because when people buy more newspapers, it’s a direct boost to the bottom line. But getting a flood of visitors to a website isn’t nearly as valuable, because you’re usually serving up cheap, low quality ad impressions on page views above what you’ve forecast (because you can’t sell inventory to advertisers ahead of time that you don’t know you’ll have).
But long term, these events are actually more important for online media. Because the barrier to switching your news source is so low (no subscription to cancel, and rival sites are just a click away), a news website that has strong coverage during a major event stands a good chance of winning new regular readers, and winning regular readers off its rivals. In the end, it’s these regular readers that matter.
So that’s the goal of any news site during a major news events – get lots of new readers, and convert them into coming back.
With that in mind, let’s take a look at how NZ’s news websites did during 2011. To recap, here are the weeks of major news events.
|Week starting||Major event|
|Feb 21||Christchurch earthquake|
|March 7||Japan tsunami|
|May 2||Osama bin Laden killed, Auckland tornado|
|June 13||Big Chch aftershock|
|Aug 15||Crazy weather|
|Sept 12||Rugby World Cup, ScarJo nude pics|
|Oct 31||Kim Kardashian files for divorce|
|Nov 21||Auckland chopper crash, election|
And here’s the traffic of the major news websites, starting from after the Christmas break last year. This is domestic average daily UBs (ADUBs), as always from Nielsen-NetRatings Market Intelligence, with the usual disclaimer that I work for Fairfax Media, the owner of Stuff.co.nz.
ADUBs are a good measure of how many regular readers a site has.
People who read business news tend to have more money and want to do things with that money, compared to people who tend to be more interested in this or this or this. For this reason, business is one of the most sought after audiences for advertisers. So let’s have a look at how NZ’s business news sites are doing.
One of the only online paywalls in New Zealand is in the business niche, at the National Business Review (NBR). Though a lot of content – 80% – sits outside the paywall. It charges about $180 a year for “premium” online content, with a half-price subscription if you stump up $475 a year for a print subscription too.
Running since mid-2009, it’s a solid freemium model, offering a large chunk of its page views outside the paywall so it can keep earning good ad revenue, while still trying to develop an online subscription base to offset any declines in its print business. The paid content is occasionally promoted on the homepage but more commonly I see it in the Paid section.
Any treatment of online business traffic has to take the NBR’s paywall into account, because a page view just isn’t worth as much to the NBR as it is to a free news site like the NZHerald.co.nz or Stuff.co.nz (full disclosure – I work for Fairfax, owner of Stuff.co.nz). A page view is much more a conversion game to the NBR than it is for Stuff. The NBR’s goal is much more to get you to subscribe, rather than simply see more page views. Plus it doesn’t need as many page views if it’s monetising them more effectively.
Alright then, how is the NBR doing since it put up its rather porous payfence? Not as stink as you might think. Hit me with some sweet sweet numbers.
The short answer is “not as well as you’d think”. While the sites’ sport sections did quite well, sites overall didn’t really budge much from normal.
You can see that in these category report numbers showing average daily UBs (all metrics from Nielsen NetRatings, NZ traffic only – and the usual disclaimer, I work for Fairfax NZ, publisher of the Stuff.co.nz website).
|Newspapers & Magazines||Publisher Home Pages||Sport|
|Average RWC week traffic||545,942||1,053,571||353,585|
|Change from previous average||24,654||7,989||106,403|
|% change from previous average||4.7%||0.8%||43.0%|
Wow. The Sport category went bloomers, nearly doubling in traffic. But homepage traffic? About the same as before (Stuff and NZHerald tended to perform the best here, recording low but significant percent increases). And traffic to news sites overall only budged a bit.
So it looks like news sites as a whole didn’t actually win many more regular readers as a result of the RWC, unlike in other major news events. But their regular readers were reading a ton more sport stories.
Average Daily UBs have their sins, like any metric. But in general they’re a good indicator of regular audience. And if you run the same numbers looking instead at UBs, PIs, Sessions, UB Freq and Average Session Duration, you see exactly the same trend – negligible change on the category as a whole, but a big lift for Sport.
Let’s look at the major media sites now, still average daily UBs.
Let’s get existential for a moment.
I read a blog post by Rob O’Regan this week talking about the need for different revenue streams to feed publishers online. Stacking up millions of generic page views isn’t the way for most publishers to survive online. The advertising rates just can’t support quality content, especially in a small country like New Zealand.
Now, how does a publisher monetise its readers? Readers can pay by:
* Actually paying money
* Signing up for a free subscription and handing over some of their data, all the better to target ads to them
* Coming back to visit often, and seeing lots of pages when they do. This again means publishers can better target ads through cookie tracking.
* Seeing generic untargeted (and low yield) ads.
Which brings us to the existential question at the heart of it all – why do you produce the content you produce? I’m talking here about the business reason for doing it – the journalistic reasons, while they may be laudable, don’t pay the bills.
It’s a question most traditional publishers, and many digital publishers, still don’t have a good answer to. The ones that do are the ones that will succeed in digital publishing. For companies like the Financial Times or New Zealand’s NBR, the answer is actually clear. For general news publishers with free websites, like Stuff.co.nz or NZHerald.co.nz, it’s a bit more murky.
But the answer’s actually the same whether it’s the Financial Times, Stuff.co.nz or a local blogger: to convert readers up the pyramid from once-in-a-while visitors to fans. Fans are the visitors who consume more pages (anecdotally, usually more than 50% of page views on a news site come from fans , which usually make up about 5-10% of site visitors). So even if you don’t target ads to their cookies, you still make way more ad revenue off addicts than people who pop-in from Facebook or Google to see a story, then pop off again.
Your fans are also the readers who will give you their money or their data or pay for a print subscription, which is the goal of publications like the FT and NBR.
So then what should be the purpose of free content? It’s simple: Marketing. The topic, quality, promotion and production cost of the content should be geared toward convincing readers to make the next step in that conversion process. Content that “doesn’t perform” in the conversion game should be axed. Just like (gasp!) advertising.
Again, that applies to free news sites with no intention of charging or asking for reader data. The goal is still conversion. Just instead of convincing people to pay or give you their personal details, you’re trying to convince occasional readers to become fans, and fans to share and read even more. That’s the goal of your content, and it needs to be honed and tailored to that goal. To aim for otherwise is to struggle in the digital world.
There are nuances to this of course. You may tailor content to attract audiences that are more likely to convert, or higher value as regular visitors. Or you may convert people from being once-in-a-while readers to being regular free readers, to signing up for a free subsciption, to buying an iPad subscription, to getting a print subscription (like the FT does).
But the goal is always conversion. The free content is designed to lead you into paying, and the paid content is designed to lead you into paying more.
The publishers that do this successfully survive in the digital world. The ones that don’t – well, unless they have the scale of the HuffPo, it’s going to be tough.
So why do you publish the content you publish? Are you just attracting low-value page views from across the internet? Or are you actually growing a valuable audience of fans that can sustain a digital publishing business?