Last week, the New Yorker ran a feature with quite a prophetic title – TheFinancial Times and the Future of Journalism. The article focused on the paper’s switch from a metered paywall to free trial subscriptions. Why is this so important? To understand the real significance of this move, we need to go back a few years.
Remember when people thought it was crazy for newspapers to charge for online content? In 2001, the Financial Times decided to break with conventional wisdom, and was one of the first newspapers to charge for access to online content. By 2012 their digital subscribers surpassed their print circulation, and the FT was earning almost half of its revenue from subscriptions, rather than advertising.
John Ridding, the CEO of Financial Times told the The New Yorker – “I believed in some major challenges to the business model that supported journalism…Remember, when we did start charging online, we were regarded as sort of freakish, particularly in the U.S., particularly on the West Coast of the U.S. But we fundamentally believed that if it’s quality journalism, people will pay for it. That’s been vindicated.”
The FT made a big bet on paid content, and they won. But, their recent shift in strategy shows they aren’t resting on their laurels and presuming the loyalty of their readers. Consumers have changed dramatically since the first paywalls went up. In fact, the new winners of the newspaper industry have not only launched paywalls but have moved on to implement “Paywall 2.0” strategies.
If Paywall 1.0 was simply about monetizing content, Paywall 2.0 is about recognizing your readers as your subscribers. It underlines the shift from an advertiser-centric to a subscriber-centric business model. It’s understanding that it was never about the paywall in the first place. It was always about the customer.
Today’s newspapers need to acquire a holistic understanding of their customers and the ability to manage those relationships from not just an editorial and technological perspective but also a commerce, billing and finance point of view. They need to use data and insights to give readers what they want (the right editorial mix), where they want (on any device), at the price they want it (flexible subscription options). They must start off on a good note by making it easy to subscribe and pay for their service (local currency and popular payment options). And then go on to build a sense of community with their readers who are increasingly spread across the world.
Leading global media organizations are using creative ways to connect and build these relationships. News UK sends out personalized ‘meet the editor’ invitations and chocolates (!) around Christmas and Easter, and wraps in free Spotify memberships. The Guardian is investing in a massive new events space in London and various pop-ups around the world — their membership beta project has already signed up tens of thousands of members. The Economist’s popular new Espresso app is extending its editorial reach to thousands of new casual readers. The Sydney Morning Herald gives its subscribers special offers from partners such as video-on-demand service Stan and access to exclusive editorial events. Closer home, The New York Times which says it has more subscribers than ever before in its 164-year history is offering subscribers access to journalists with new podcasts and live events.
The FT’s new trial subscriptions are following suit. They are building meaningful, long-term relationships between paper and reader rather than just a monetary transaction. Ridding explains the inherent contradiction in the metered paywall – “By definition, if you have a metered model, which limits people to eight articles a month—or ten, or three—your model is actually getting in the way of habit. People aren’t going to form a habit if you are rationing what they read.”
Their new business model also plays well with analytics. The paper can now track readers and gain insight into what they care about. “Engaging with readers is now a mantra at the FT” he says. With this fundamental shift, the FT has joined Paywall 2.0.
Every form of media has seen this change – music, movies, books, television, games, etc. This shift in consumption patterns is of course much broader. Today, almost anything can be had via a subscription – cars, flights, groceries, health services, you-name-it and it’s available as a subscription service. Today we’re all living in the Subscription Economy.