Why Newspapers Should Never Do a Metered Paywall

I really dislike metered paywalls.  The first thing that publishers want to talk about when they call me is where they should set their meter.  I tell them to set it aside so we can figure out something that works better.

The philosopher George Santayana’s quote “those who cannot remember the past, are condemned to repeat it” needs to be posted on the wall of every newspaper in America.  It was only 16 years ago when the newspaper world watched The New York Times launch a free, ad supported website and said “yeah, that’s the model, if they’re doing it it must work.”  We all know how that turned out.

Virtually every letter to readers justifying a paywall and industry quote from publishers talk about The New York Times metered model.  When you have 33 million unique monthly visitors and high value content that model almost works.  The Times has been very vocal about saying that it is a holistic digital strategy that focuses on all their digital platforms.  Even at 390,000 digital subscribers they understand that they have a way to go to close the revenue gap and create a sustainable business model.  I’ve been in meetings where NYT executives caution that what works for The Times rarely works anywhere else.  Actually when I was their Internet strategist for advertising I used those words to caution other newspapers on their expectations for getting Internet IPO advertising.

Let’s think about the origin of the metered model.  The most recent and most known model was The Financial Times, and that meter was set at 3 stories and it required you to register so they knew it was you looking at those 3 stories no matter what device or browser you used.  The Times’s meter is set at 20 because that is the number that presumably exposes all their ad inventory.

I have yet to see any meter model “work” or rather make a difference.  I will always recommend against a meter for the following reasons:

1) It’s not restrictive enough – If you set a meter at say 20 and your main internal selling point is that only a small percentage of readers will ever hit that number.  What have you really accomplished?  If you figure that only a small percentage of those people are willing to pay, you’re not going to keep the lights on with the incremental revenue it generates.

2) It creates unwanted behavior – Let’s say that a reader does hit that wall.  There are two things that they’ll likely do and neither is reach for their credit card.  The first thing is try to figure out how to game the system.  The second and possibly most dangerous behavior is it makes them seek out next best free alternative or what I call the “osmosis of free”.  When The New York Times put the wall up my 16 year-old son came to me and said he tried CNN and other alternatives but nothing else compared and that I should get him a digital subscription.  If you’re in an extremely competitive space you’re going to drive your core users away.  How many paywalls of any kind do you see in the extremely competitive world of sports news?  Staying with that sports example, Wally Pipp, the baseball player whose day off cleared the way for Lou Gehrig to begin his 2,130 consecutive game streak, showed you never want to give anyone a reason to see how good your backup is.

3) It’s the easiest system to game – The original FT model worked because you had to register.  Fearful of requiring registration and losing readers, newspapers have never forced the issue.  To implement metering most systems rely on javascript code on pages, browser cookies, in some cases persistent cookies buried deep on users’ computers in multiple spots.  Some of these border on malware and sometimes are recognized that way by virus protection programs.  Gaming the system includes clearing your browser cache, switching browsers or simply using multiple computers.  I routinely work off of 4 computers and 2 ipads.  I’m an extreme case but users working off of multiple computers are becoming the norm thanks to cloud-based applications and programs like Dropbox.  When I look at some metrics of publishers who have implemented the metered model and hear that their uniques visitors have not changed I immediately ask if those are fewer people coming from more computers.  No one has ever been able to answer that for me.

4) It’s the most difficult to implement well – As I mentioned earlier the only way to truly make a meter work is to force registration.  Not many have.  When I worked in the ebook/emagazine space we always worried about digital rights management (DRM).  We’d always joke about “military grade” protection or “pain-in-the-butt” DRM.  In most cases you settled on PITB DRM.  You want the user to say, it’s easier to give you $9/month than jump through  these hoops.  Of course there will always be a small percentage of people who will try to game the system for philosophical reasons.  Find them and make them part of your “security” panel.

5) It’s the most difficult for users to understand – Most users will never hit the wall.  The ones who do wonder what counted as an article view and what didn’t.  20?  20 what?  Why am I getting this message?  No publisher wants to post a giant sign on their home page that says “come enjoy your 20 free stories a month”.  I like easy to understand hard walls were you know what’s free and what’s not.  No secrets or surprises.

Let’s face it the only reason you want a paywall or website restriction is to create the sense of scarcity and create greater perceived value for your digital subscription package.  We have a metered wall in Memphis set at 10.  It wasn’t my recommendation and when asked I didn’t have a better suggestion, but that was a year ago.  The mobile web has a hard lock on it with password required to view.  My recommendation is always to have a great product suite in your digital subscription package.  The better the products the tighter the restrictions you can put on access. Nothing good ever comes of a bad suite of free mobile apps, replica edition iPad apps and a meter set at 20.

 

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