Publishers and retailers are exploring new ways to package and price digital book content, and we can learn quite a bit about this by looking to other content industries. We’re talking more frequently about bundling and subscriptions, but there’s a little less chatter about paywalls and I think that’s because the jury is still out on whether it works for our counter parts in newspapers and magazines. But it’s worth examining now to stay on top and ahead of things.
I attended paidContent Live and although it wasn’t a book publishing conference, many of the discussions happening there were relevant to our industry, including those about paywalls. One of the most interesting sessions at paidContent Live was “How to Monetize Digital Content: Advertising or Paywall?” The panelists, from The Atlantic, News Corp, ProPublica and Major League Baseball, brought varied perspectives and opinions which made for a very insightful discussion on monetizing content sites and whether or not paywalls are the answer. Here are the key takeaways:
1. While paywalls are taking off, they’re not guaranteed to work for everyone.
Lots of content companies are jumping on the paywall bandwagon but it’s too soon to say that paywalls are the best way to go for everyone. So far it has a mixed record. At this point, it’s the strongest of brands and B2B that have had the biggest success with paywalls. The New York Times, for example, is an outlier because its brand is so well recognized and trusted.
2. Sometimes, ad-supported sites do really well, too.
CPMs are generally going down in value, so sites can’t charge as much as they once did. This is why many media companies are struggling with digital ad revenue as print circulation drops off. But not all CPM ads are going down in value. Niche markets are not experiencing the same dip and this makes it more feasible to forgo paywalls without going broke.
3. Paywalls set a high bar for content quality.
Customers have higher expectations of content behind a paywall, so you need to have a lot of faith in your product and your brand. You cannot afford to skimp on editing and proofreading when your content is behind a paywall—in fact, you may need to invest more to make sure you’re meeting expectations. You may also have to work harder to bring people to your site and to get them to re-subscribe when you have a paywall than when you’re relying on banner ads.
But paywalls don’t just raise expectations for editorial quality. UX is equally important. Companies will need to move beyond PDFs and clumsy sites and create content that’s a pleasure to read, use and interact with.
Lots to think about when it comes to paywalls and digital content, and this can definitely apply to publishers and online retailers. We are seeing book content sold and used in many different ways and innovation in this area will only increase. Paywalls won’t be ideal for every publisher and we’re not sure if all ebook retailers will go this route, but paywalls (whether they use flat or metered rates) will offer publishers more options to monetize their content. They won’t be restricted to just book-length EPUB files; they can create hubs to encourage repeat visits, nurture long-term relationships and offer an alternative to Amazon prime so that they’re not only relying on one-off transactions for revenue.