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A paywall for all of NZ?

January 14, 2012

Slovakia and Slovenia are both trying something interesting – nationwide paywalls covering all the major publications in each country.Australian money in wallet

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.

A bigger risk is from sites that don’t rely on content to draw their audiences – like MSN and Yahoo. These sites are already summarisers, except where they license content from APN or Fairfax.

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?

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4 Comments leave one →
  1. January 14, 2012 7:22 pm

    Right to the extent that taking a less one size fits all approach to monetising content should/can be revenue accretive. Better question is whether collusion is necessary to achieve revenue diversification?

    If the content’s really unique, or at least is provided in a format or on a basis that creates perceived value – it doesn’t require an agreement among competitors to make some money out of it.

  2. January 16, 2012 5:42 pm

    Slovakians speak slovak, Slovenians speak Slovene and perhaps a smattering of Hungarian. None of these are major languages.

    Admittedly some or many people in both countries speak English, but the big picture is there’s something of a language firewall around these countries which changes the whole national pay wall dynamic in ways English-speaking New Zealand can not.

    If we really wanted to help our on-line industry and media players, we’d quickly move to making Maori our official language. There would be other benefits, like reduced dependence on overseas content piped through one (or may be two) submarine cables.

  3. February 6, 2012 12:12 pm

    Slovaks and Slovene are close enough to other Slavic languages in Europe to have a considerable level of mutual intelligibility. Those two populations alone account for some eight million people, and adding it up, it’s probably around fifty million people, maybe more, who can communicate with each other reasonably easily.

    Many people in those areas also speak German, Italian and of course English, so I don’t think a language firewall exists. I speak Swedish and Danish, and read news from both countries, plus Norway and Germany without too much effort.

    Korea is more isolated in that sense, ditto Finland.

    The Maori idea is interesting but would it really make sense to isolate yourself from the world by adapting a language only comparatively few people can understand?

    I’d imagine the only reason Slovakia and Slovenia’s paywalls would work is good local reporting, by locals. If that’s not there, well… they’ll just read the news in Czech or Croatian. Or German.

    • February 6, 2012 4:02 pm

      I’m not arguing for a move to Maori, merely that it would make life easier for local on-line publishers.

      As for the language firewall… there are other aspects.

      It’s unlikely sweat shops in India are busily rewriting Slovenian stories – at least not at the rate they are rewriting NZ stories.

      It would be interesting to read how Welsh fares on-line. Does the net help or hinder the renaissance?

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