Analysis of the German newspaper market and their implementation of paywalls. Mechanics and effects of paywalls. A business case for German newspaper «Die Zeit».

1. ANOTHER BRICK IN THE
PAYWALL?
Paid Content in Germany.

2. 17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 2Times have changed...

3. ...even The Times has changed...17.04.2015 3

4. NewspaperNewspaper and OnlineOnline ad revenue
in Germany, in Bn EUR
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 4
Source: Statista
Newspaper ads
Online ads
Paid content

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??

6. Agenda
1. What are paywalls?
2. (How) Do they work?
3. How to implement a paywall
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 6
►

7. Three paywall types
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Source: Own research
«Hard»
Paywall
Freemium
Metered
Paywall
Usually ~15 articles
by quality
by quantity
by time

8. Cannibalization – a reason for paywalls?
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 8
vs.

9. Digital news is a complementary product,
not a copy!
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Source: Vento (2012), Own research
Medium
Content
Delivery
e.g.:
fast-paced, personalized, short, ...
e.g.:
hyperlocal, opinions, blogs, ...
e.g.:
videos, photo slideshows, games, ...
DIFFERENT

10. Pay-WallPay-Wall vs. Pay-WillPay-Will
►Clear value, flexible payment mode(l)s, fitting for content
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Source: Leonhard (2012), Wagner (2012)
???

11. Flagship
Metered Paywall
Trash
Nothing to monetize
Content type vs. monetization strategy
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Source: Piano Media, Leap Media Solutions, Media Manager‘s Club, Own research
Niche
Hard Paywall
Commodity
Advertising
TRAFFIC
LOYALTY

12. Agenda
1. What are paywalls?
2. (How) Do they work?
3. How to implement a paywall
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►

13. Paywalls in Germany
Status quo
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Source: Statista, BDZV
2015 (total: 102)
2013 (total: 55)

14. Paywalls in Germany
PricingPricing and MeteringMetering models are very similar
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Source: BDZV, n-values in LTR order: 52, 51, 57, 33
<1€
15 -
25€
<10€
Daily Pass Monthly Pass Monthly Pass
+ePaper
15-20
Allowed Articles
per month

15. EffectsEffects of metered paywalls
General “wisdom”
traffic decline: 5 – 40%
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Source: Statista, Piano Media
Readers hitting PW: 1.3 – 6.5%
Subscribers: 0.01 – 2.0%
??
TRAFFIC

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?!?!

17. Agenda
1. What are paywalls?
2. (How) Do they work?
3. How to implement a paywall
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 17
►

18. 3 phases of a paywall launch:
Overview
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Source: Vento (2012)
Pre-Pre-
Launch
Pre-Launch Post-Launch
LaunchIncrease # of readers Announce the launch externally Capture and retain customers
>3 months >3 weeks 3+ months
Action
Time

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???

20. «Die Zeit»
Status quo
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Source: Statista (Reach and ad revenue: (weekly) newspapers; Users: news websites, aged 14+), IQM, AGOF
500,000
25,000
120 Mn
Newspaper reach per year
ePaper reach per quarter
PI per month
#2
#6
#2
900k€
Total
ad revenue
per month

21. «Die Zeit»
Possible effects
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Source: Statista, IQM, Piano Media
7.35 Mn
5.65 Mn
1.84 – 4.78 Mn
95k – 478k
<15k – 147k
Total visitors à 4 visits à 4 PI
Unique users
Unique readers
Readers hitting paywall
Subscribers
25 - 65%
1.3 - 6.5%
0.01 – 2.0%
76.9%
 Market potentialMarket potential
 Target marketTarget market

22. «Die Zeit»
Key outcomes
 In the short run, <10k<10k subscriberssubscribers compensate
lost ad revenue of ~500k visitors~500k visitors
 Pricing  Ad model vs. user structure
Calculation: 500k * 4 visits * 4 PI = 8 Mn PI @ 20€ TKP = 160k€ = 16€ / subscriber
Example 1: «Süddeutsche»: 5.000 * 30 EUR = 150k EUR / month (potentially)
Example 2: «BILDplus»: Subscribers per Unique User rate of ±1%
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 22

23. One more thing — alternatives?
Native advertising
Sponsored content (e.g., WirtschaftsBlatt, Buzzfeed)
Learn from mobile games
Gamification, tailored concepts
Micro-payments at point of need
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24. One-year effect of paywalls
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Source: completely made up
Hard paywall
Metered
Freemium
VISITS
UNIQUEUSERS
More
research
needed?

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?!?!

26. Key take-aways
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1. Know what and when to reveal
2. Communicate clear value
3. Know and hold your audience
4. Be creative!

27. THANK YOU
FOR YOUR ATTENTION!
Do you have any questions?

28. Further reading
 M. Olavarri (2013): «Das Paid-Content-Workbook»
 M. Vento (2014): «Launching a Paywall»
 P. Berger, D. Eng, D. LaFontaine, D.J. Siegel (2009): «The Free v. Paid Online Content Debate»
 J. E. Cook, S. Z. Attari (2012): «Paying for What Was Free: Lessons from the NYT Paywall»
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29. MORE FACTS AND
FIGURES
If you didn’t have enough...

30. How U.S. daily newspapers decide to
design and implement paywalls
 Publishers consult each other, not audiences, before launching paywalls
 Paywall-Meter ~10 articles
 Daily newspapers infrequently conduct audience research prior to implementing paywalls.
 Consulting with peers is far more common.
 Paywalls exist on 70 percent of daily newspapers’ websites, up from 47 percent in 2012.
 Metered paywalls are common; a near majority (49 percent) of those with meters allow six to 10 free
views before charging.
 The study reports on a survey of 416 daily newspaper publishers or their designees.
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Source: Jenner/Thorson/Kim (2014)

31. World News
TV
Article clusters
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Sources: Piano Media, Leap Media Solutions, Media Manager‘s Club, Own research
Business
Culture
Local
Travel
Lifestyle
Sports
TRAFFIC
LOYALTY

32. Commodity
Advertising
Flagship
Metered Paywall
Trash
Nothing to monetize
Niche content most suitable for hard paywall
Specialized content
Finance, lifestyle, health, cars, hobbies, ...
Specialized coverage
Business data, charts, market analyses, ...
Unique content
Local/hyperlocal news, sports, reviews, ...
Exclusive content from behind the scenes
Editorial sources, chat online with journalists, ...
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 32
Sources: Piano Media, Leap Media Solutions, Media Manager‘s Club, Own research
Niche
Hard Paywall
TRAFFIC
LOYALTY

33. EffectsEffects of metered paywalls
General “wisdom”:
5 - 40% decline of traffic
27.03.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 33
Source: Statista, Piano Media
100%
50 – 70%
25 – 65%
1.3 – 6.5%
0.01 – 2.0%
Total visitors
Unique visitors
Unique readers
Readers hitting paywall
Subscribers

34. 3 phases of a paywall launch:
Overview
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 34
Source: Vento (2012)
Pre-Pre-
Launch
Pre-Launch Post-Launch
LaunchIncrease # of readers Announce the launch externally Capture and retain customers
>3 months >3 weeks 3+ months
Action
Time

35. 3 phases of a paywall launch:
Detailed
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 35
Source: Vento (2012), Own research
Pre-Pre-Launch Increase number of readers: Emotional campaign showing clear new value of website, get
goodwill, strengthen ties to (potential) customers. E.g., 3x unique users as a goal.
Website updated, content-rich and valuable for customers>3 months before announcment
Pre-Launch Announce the launch externally: Open communication (internal+external), customers’
capability to understand, emphasize added value, both emotional + rational.
Informed, converted customers without negativity>3 weeks before launch
1
2
Launch
Post-Launch Capture and retain customers: Strengthen emotional bond and rational appeal, detailed
offering with easy payment mode(l)s and clear calls-to-action.
Clear perceived customer value, retained customer base3+ months from launch
3

36. Pre-Pre-Launch strategy
17.04.2015 ROMAN ABASHIN. ANOTHER BRICK IN THE PAYWALL? E-MARKETING. WU WIEN 2015. 36
Source: Vento (2012)
Pre-Pre-Launch Reach the new reader target:
1.More online readers
Enhance both advertising and
subscription income
There are people who appreciate the
content but not in the printed form
New customers – always part of the
target
Retain customers:
1.Hold on to online readers
2.More combination orders
The wall mainly affects current readers
Not to have online orders at the expense
of print orders
Reached easily through owned channels
Bad timing for a large campaign
Print orders as the most potential target
>3 months before announcment
Message strategy:
1.Communicate effectively online newspaper value
2.Emotional appeal
Educate the audience: there is improved, valuable content online –
quality journalism – the reason to read online
Complementary online benefits differentiate from the print: fast
updates– what happens now, mobility, improved user experience
Reader contributes to the value: personalizing the service
Same reading experience, newspaper and quality but now it can
be read multi-channel
Power to the consumer: no guidance to a specific reading format
Interactivity: reader perspectives and participation in the news
process
Partner advantages attract readers
Emotional appeal: hyped and noted
Readers relate to celebrities telling about their relationship with the
newspaper
Informs why the newspaper is interesting
1
Offline Media
Own print paper, Other print papers, Local
radio, TV, Own events, Outdoor
advertisements, Other owned print material
Online Media
Own website, Facebook, Google
AdWords, Websites of group, Banners on
other websites, E-Mail, Twitter
New and current readers

37. Pre-Launch strategy
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Source: Vento (2012)
Pre-Launch Communicate improved online content
Education: content is valuable enough to be paid for – the fee is not laid on the old site but the new quality
journalism naturally is not free
More visible if simultaneous site reforms
Service and interactivity
Service in the online newspaper usage
The point of views of the readers, participation in the news process increases
Equality
Fair to the customers: no free-riders consuming news online without charge
Easy low-cost option
Easier (than in print) to become a customer
System explanation
Familiarize readers with the paywall
Justify and inform
Trustworthy, open, and emotional communication: motives and dates the process proceeds
>3 weeks before launch
2
Offline Media
Own print paper, Own and other events,
Classic PR
Online Media
Own website, Facebook
Current readers

38. Post-Launch strategy
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Source: Vento (2012)
Post-Launch Strengthen emotional bond
Emotional campaign still continued
Good and effective CRM
Rational appeal: package information
Informative appeal changed: detailed offering information
Easy payment mode(l)s
3+ months from launch
3
Offline Media
Own print paper, Other print papers, Local
radio, TV, Own events, Outdoor
advertisements, Other owned print material
Online Media
Own website, Facebook, Google
AdWords, Websites of group, Banners on
other websites, E-Mail, Twitter
New and current readers

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