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'The Information' makes a case for smaller publishers adopting a paywall.
This is just a brief companion to an article I wrote yesterday entitled do publishers' paywalls kill sociability?, in which I asked a few questions around the subject of online publications asking readers to pay for content which they have traditionally enjoyed for free.
As this focussed mainly on larger newspapers, at the end of the post I suggested that I would follow up the article with a focus on smaller, start-up publishers and whether a paywall might be suitable for them or not.
This recent example was brought to my attention and I feel it makes for an interesting case-study.
Jessica Lessin, a former reporter and editor of the venerable, and paywalled, Wall Street Journal has just launched her own technology news site called The Information.
This start-up publisher, that’s barely two weeks old, is charging readers $399 a year, or $39 a month to read its content.
What's your first reaction to this? A vaguely sarcastic "good luck"? A dismissive shrug of the shoulders? Or an indignant yell of “who the hell does she think she is, making us pay for content on the web!"?
Perhaps we shouldn’t snark too soon.
The Information has five full-time members of staff and two contractors, and Business Insider suggests that if each employee costs around $100,000 (I’ll remain professionally aloof about writing that figure), The Information only needs to find 1,800 annual subscribers to break even.
If The Information finds 5,000 subscribers, the company will have a profit of $1m. 10,000 and the company will be in the black. Then Lessin can either reinvest in the company, offer her staff a payrise, or do it all over again with another venture.
Will it succeed?
The Information targets a niche audience, with niche evergreen content. Evergreen content is typically of a higher 'value' than the churning out of daily news stories, as the content is more considered, insight-led and useful.
We’ve set the bar high. To succeed, we need to write articles that deliver value worth paying for. That’s why we’re a subscription publication.
Although it may not have a recognised brand name or a long history of building consumer trust, the fact that the staff jumped ship from WSJ will carry a considerable amount of weight, and all this publicity won’t do any harm either.
Jessica Lessin and her colleagues have also theoretically built up a huge network of potential readers to target through their years at the Wall Street Journal together.
Another key factor in the potential success of Lessin's venture, and also for smaller publications who wish to adopt a paywall, is the deep understanding of who the exact target market for a publication is.
They’re professionals inside and outside of tech, an audience that pays for information that’s going to make them smarter and give them an edge and to be ahead of the curve, and many of them already expense information like that. And we knew that we wanted that kind of audience from the get-go.
So readers who have access to the company credit card then.
The subscription model offered by The Information may seem like common sense approach, a monthly rate that acts as a ‘trial-period’ to potential consumers, but initially this wasn’t always the case as some start-ups struggled to get off the ground when offering a ‘hard paywall’ of an annual subscription with little in the way of ‘tasters’ right off the bat.
The Information doesn't offer samples, but at least the monthly subscription rate isn't financially crippling.
Will it succeed for every publisher?
Paywalls make it difficult to reach new readers as articles tend to be difficult, or even impossible, to share. A slower publishing schedule could affect your SEO.
Other websites are much less likely to link to your content if it’s not easily accessible. Also you’ll have to keep the quality of your content up to the very highest standard in order to justify the subscription price.
All of these are difficult challenges to overcome, but perhaps if you have the right backing, experience and are appealing to a professional demographic that will happily part with a businesses' cash, then perhaps a paywall may work for your start-up.