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Measurement is Key for Paywall Success

From following the paywall hashtag on Twitter over the last 18 months, there has been a steady increase in the debate about paywalls, both pro and con, but mostly without any data or revenue models.  Our previous research (http://research.scoutanalytics.com/advertising/the-digital-drop-off/) showed that the move from print to digital significantly reduces the revenue capacity of a publisher.  The reality is this: Without a fundamental change in digital ad units and their revenue production, publishers have no choice but to pursue alternate revenue streams.  So where do publishers go when advertising revenue becomes unsustainable? Higher-margin marketing services and subscription revenues are quickly becoming the answer, also known as a metered paywall. Not all publishers will be able to implement a full subscription model. [...]

The Metered Model and the New York Times

Posted by: Matt Shanahan The New York Times reported their second-quarter results on July 22nd.  One topic of conversation on the analyst call was the metered model under development.  Another topic was Internet revenues — specifically advertising.  It sparked a question for me, about what the conference call might sound like in July 2011 with a metered model in place.  How would the ad and subscription revenue compare? I decided to do some of my own analysis.  The goal here is not to replace Alexia at J.P. Morgan, rather to examine the impact of a combined subscription and ad revenue model.  To model the New York Times metering, I needed to develop some assumptions: number of readers, revenue per reader, and subscription revenue per reader.  With [...]

Gross Revenue of 149k FT Subscribers = 30M HuffPo Readers

Posted by: Matt Shanahan I did a little math last night to look at the gross revenue efficiency of an FT subscriber vs. a HuffPo reader.  Currently, the FT has 149,000 individual subscribers.  Using the US price of $4.25/week (lower rate than the UK rate), the 149k subscribers generate $32,929,000 per year (the actual number is likely higher).  HuffPo is generating about 30M per year with an average of revenue of $1/reader/year. Now which model is more efficienct? The FT’s digital operations is on pace to generate about $200M in 2010.  This comes from the 149k subscribers, 2.5M registered users, and 1,000 corporate subscriptions – a base of somewhere between 2.7 and 2.8M readers.  In the HuffPo model, they need [...]

The Metered Model: Part 1

Posted by: Matt Shanahan One of the hot topics with our customers right now is the metered model.  The metered model blends advertising and subscription revenue by recognizing some visitors have higher or unique demand for the content and are willing to pay for the right to consume it. The metered model assumes an audience can be segmented according the the value they derive from the publisher’s content.  In the metered model, the publisher utilizes different pay points to package the content in the right monetization model for the right audience member.  These pay points can be the following: High Demand: Visitors can view a certain amount of content within a particular time period. Premium Content: Some content is free, [...]
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