In defense of metered content

by Jason Preston on December 15, 2008

Ever since I posted about the Financial Times’ system of metered content, I’ve met with a lot of resistance from people who don’t think the idea has any chance of success.

“Metered content” is the term I use to describe a system where the user-cost of viewing news on your site is based on how much they use it. For example, the Financial Times allows up to 30 articles per month for free, then people must pay for more access.

“The biggest mistake for a newspaper,” they tell me, “is to try to charge readers money. They’ll get pissed off and leave.”

With all due respect, I disagree completely.

Understanding the curve

Most online activity can be charted with a power curve. You might be familiar with it’s other name: the long tail.

You want to chart user participation in Wikipedia? Power curve.

You want to chart how often Amazon sells each item in it’s inventory? Power curve.

You want to chart reader engagement on your newspaper web site? Power curve.

The power curve looks like this, with each individual user along the X axis, and their Time One Site (TOS) on the Y axis.

There is a group of people at the top of this curve who we can safely call your loyal fans. They might be your 1,000 true fans.

That is your paying market. The rest of your audience will pay you with their eyeballs and nothing else. But the people at the top of the power curve clearly identify with your brand. They are an engaged audience, and they are valuable to you.

Faith in your audience

As a newspaper—in fact, as any widely consumed product—you have an established following. There are people who subscribe to your print edition, and there are people that care about your work, and are willing to support your business.

The idea of “free products online” is so prevalent that it’s hard to believe people will pull our their wallets. You can find studies that will tell you what ridiculously high percentage of your online readership would be unwilling to pay for your product.

But here’s the catch: that astronomical number is not 100%.

In other words, there is a statistically significant portion of your online audience that would be willing to support your product – the way to capture the fish but not the dolphins, if you’ll excuse the metaphor, is to meter your content.

Have faith; your fans will support you.

Offer carrots not sticks

“But Jason,” I can hear you saying, “if I take away features that are already available to all my readers, they will rebel!”

I’d be an idiot not to recognize that people often get riled up when they feel as though something is being taken away from them, even if they didn’t use it before. It’s just human psychology.

I can offer two points of advice on this: First, try to offer additional features instead of hiding existing ones behind a pay wall (that means get inventive!), and second, remember that your “metered content” pay wall should only affect the normal browsing behaviors of maybe 10% of your audience.

The vast majority of your audience will continue to use your site as they always have.

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{ 5 comments }

1 Peter 12.16.08 at 1:30 am

What you’re describing does exist in one form. ESPN does this with their ESPN Insider product. They used to have 100% free news on the ESPN website. Then in 1999, they launched ESPN Insider. It is providing their loyal sports fans the inside scoop, stuff behind the scenes. Then back in 2002 ESPN started to give away ESPN Insider for free to all the people that subscribed to ESPN the Magazine. While I am a pretty avid sports fan and have been playing fantasy sports for the last 14 years, I’m not willing to pay for that kind of information. I have been finding my inside sports news on other websites. Even with ESPN Insider’s new pricing model, which provides steep discounts with a 2 year subscription at only $2.50/mo (regular price is $6.95/mo) is not enough to get me to want to pay for that information.

News appears to be a commodity. The big providers of news like CNN and BBC have giant advertising deals which allows them to provide the articles on their website for free. So someone is paying for news, it’s just not the readers.

The Internet breaks the distribution model, it’s basically free minus the cost of bandwidth to your house or office. I guess if people really felt they had compelling content then they would start charging for it and hope they can build a tribe of people that want to pay for it.

2 Jason Preston 12.16.08 at 10:16 am

It’s true that throughout history advertisers have borne the brunt of the cost of providing news. That’s not likely to change.

What you’re talking about with ESPN sounds really smart to me. There are a lot of people who would be willing to pay for certain kind of stats manipulation – say, people who play in a fantasy basketball league for money.

I think they’ve found a tribe, as you put it.

Sooner or later newspapers are going to follow the leaders and start charging for certain access and features, and I think they’ll discover a public that is not as unwilling to pay as they expect.

3 Peter 12.16.08 at 8:18 pm

I think this model for ESPN does at least try to monetize special news information a little bit. I certainly do not think the revenue is significant for ESPN but I guess it’s better to capture a little bit rather than none at all.

The model still seems to heavily favor content for free and get as many eyeballs on the website as possible. Companies still are paying for ads on popular websites and I think that revenue is more than what could be generated by charging each reader $6.95 per month.

4 Tim Burden 12.18.08 at 10:29 am

Here’s an (I think) obvious set of criteria to determine what could reasonably be kept behind a pay wall. First, the content doesn’t help with Google visibility. E.g. video, audio, Flash etc. Content that can’t be spidered, in other words. Second, the content was expensive – rather, more expensive – to produce than the regular fare. For most papers, video probably goes in that category.

And here’s an easy way to see who your ‘engaged readers’ are. They’re the ones who have signed up for your forums or to comment on stories and do it often. When they are signed in, should you advertise differently to them than you do to those who are ‘just eyeballs’ visiting from a Google search? Of course you should.

5 Emily Sussman 01.15.09 at 11:01 pm

Amen.

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