Monetising digital content without alienating readers continues to be an issue for the publishing industry. Piano Media offers publishers a "cable TV-style" national paywall. The firm has signed up 20 major publishers in Slovakia and Slovenia, charging readers a single subscription to access content from participating publications. Whether the scheme will hold water in bigger markets remains to be seen. Here, CEO Thomas Bella talks to StrategyEye regarding expansion and how the firm works out what consumers will pay to read.
¤ How does Piano Media's paywall work?
It's like a cable TV model for online content. Several newspapers join Piano's payment system and put some of their content behind a single national paywall. Once you pay on any of the sites that are part of the system, you can visit other newspapers without having to pay or log in again. You are automatically a paying customer. We do analysis for publishers to find out what content they should charge for, to see what works for them, to lower the risk of running a paywall. We have 11 publishers in Slovakia and nine in Slovenia.
¤ How do you pay the publishers?
The revenues are split three ways. The first 40% goes to the publisher where the users actually made the payment. Another 30% is allocated based on where this particular user is spending his time. The remaining 30% goes to Piano for the first year, after which the figure goes down.
¤ Do you release revenue figures?
We released the results for the first month after we launched in both countries: EUR40,000 (USD49,000) in Slovakia and EUR26,000 (USD32,000) in Slovenia. At the moment the revenue per 100,000 unique users on a given website is between EUR1,000 (USD1,240) and EUR4,000 (USD4,992).
¤ How much do subscriptions cost?
You can buy weekly, monthly or a yearly subscription. It is roughly EUR4 (USD4.99) OR EUR5 (USD6.24) per month and for this flat fee you get access to all the content that we have.
¤ What challenges does Piano face?
We obviously have to prove that this will work in bigger markets. The market we're launching in next will already be much bigger than the first two. And then we have to prove it in Western Europe, in more developed markets. At the moment it's more like we have two pilot countries and now we are getting serious.
There are a lot of payment systems, but that's not a problem. The technology behind the payment itself is not the challenge. The problem is knowing what people will pay for and what they will not pay for, because if you don't do it right then you risk losing traffic. We can take any publisher and tell them which content should be paid and what sections should be free. We don't see anyone else with this data, except for big publishers like the New York Times, which are typically not sharing it with competition.
¤ How much content do publishers put behind paywalls?
Most of the media publishers that we have are newspapers who use a combined model of advertising and paid. They particularly put opinion pieces and exclusive interviews behind paywalls. Some of them charge for the ability to comment on articles. Our publishers put between 2% and 10% of their content behind the paywall.
¤ How easy is it to get rival publishers behind the same paywall?
In Slovakia it took us about a year, in Slovenia about half a year. It's not easy.
¤ Which publications have the most successful paywalls?
The New York Times, the Wall Street Journal and the Financial Times are successful. We see ourselves as solving the problem of 99% of publishers, who are not the New York Times, who don't have a worldwide brand and thousands of journalists and cannot afford to put tens of millions dollars into developing their own paywall system. If you have this kind of money and this kind of brand then you can probably do it, but most of the publishers don't.
¤ How important is Apple's Newsstand for publishers?
It's hard to underestimate what Apple did for publishers, but I hear more and more often that this love affair of publishers with apps is going to end. Newsstand showed publishers that if you do everything right then people are willing to buy it, but it doesn't solve the bigger problem of people still consuming news for free outside the apps. This has to be solved if the publishers are to survive.
¤ Are consumers more willing to pay for content on mobile than the web?
They are willing to pay more on the iPad, because the user experience is so much better. The real question is if we can make the user experience almost so convenient and so great on the other platforms. If we can, then they will pay there as well.