Paywalls Continue to Produce Benefits
A major publisher learns that engagement and growth can come with paywalls
Now that subscription paywalls have regained validity as approaches to running quality publications, evidence of their positive effects is also emerging. My own experience has been that paywalls make things better for everyone involved, for a variety of reasons.
Others are also seeing the benefits of paywalls in the digital space. Take, for instance, Condé Nast, which publishes such magazines as the New Yorker, Wired, and Vanity Fair. The success Condé Nast has had with these titles’ paywalls has made them decide to put all their 19 properties — which include titles like GQ, Bon Appetit, Architectural Digest, and Pitchfork — behind paywalls in the near future. These currently have more than 150 million consumers.
Condé Nast’s Chief Revenue Officer (CRO), Pamela Drucker Mann, was recently interviewed on the “Digiday” podcast, and spoke about how Condé Nast is moving everything to subscription:
. . . we want to focus on the fact that all of our brands should be good enough for a consumer to want to raise their hand and pay for it. It’s kind of ironic, because everyone is like, “Oh my god, you’re going to ask all of these people to potentially pay for your brand.” Well, what do think we’ve been doing in the magazine business all this time? You never had a problem with that. . . . So, to me, [the subscription approach] isn’t new.
When asked why it has taken so long for subscriptions to become more mainstream, Drucker Mann reflected on the early days of the digital economy:
When websites first went up, everything was free. So there was a fear that if you charged people they wouldn’t pay for it. Consumers have totally shifted. They are willing to pay for what they like.
Yet, each brand has unique aspects and value profiles, which makes it so that how each paywall is deployed — a lesson for those who might like to think that a paywall is one thing and not contextual and customized — can be varied, and can lead to unexpected success:
The lessons we’ve learned [from the paywalls on New Yorker, Wired, and Vanity Fair] are that it’s not one size fits all. What makes the New Yorker successful behind the paywall is not what makes Wired successful. The price points are fluid. But when we put Wired behind a paywall, for example, it improved consumer engagement. We didn’t expect it at all.
Well, that last statement may not be entirely true. Wired’s editor, Nick Thompson, anticipated increased engagement from a paywall in an interview for the “Recode” podcast in February:
When you create a subscription business model, your incentives change significantly. You’re trying to build a really deep relationship with your reader. No one is going to subscribe if they think that what you’re doing is not unique. . . . You do want as many readers as possible. You do want people to come frequently. But what you really want them to do is love your stories.
In the letter introducing the subscription paywall to Wired readers, Thompson wrote this:
Even as information has become cheap or free to distribute, we believe that quality information — built on great reporting, vivid writing, and illuminating insight — remains valuable.
Finding increased engagement after instituting a paywall is something Drucker Mann reflects on later in the podcast interview:
Maybe it’s possible that when you put a paywall up, maybe it actually drives audience. Maybe saying, “This is worth paying for!” actually makes consumers believe they want it more, and it attracts more people.
These are particularly interesting points in light of the recent reporting from Bloomberg News about YouTube executives who ignored warnings from employees and allowed toxic, hate-filled videos to run rampant in order to increase traffic. Their business model — which is nearly all ad-based — incentivizes making the audience appear as large as possible.
We’ve seen again and again the pernicious effects the advertising business model has on content decisions, effects that the subscription model flicks away without a second thought. Business models are governance, and quality is a hallmark of subscription businesses, because they are focused on a smaller audience that has power in the relationship.
Wired uses a metered paywall — similar to what Science has again instituted after initial resistance caused them to retreat — and Drucker Mann notes that this allows readers to engage with the content, while providing the publisher with insights into what the audience might find most interesting, informing editorial calendars down the road:
The metered approach gives you an idea of what your consumer’s interests are and the products that will drive sign-ups versus what will not. We haven’t had any audience declines across any of our brands [that are behind the paywall.] The metered approach allows you to adjust based on any dips or declines. All three brands have had audience growth during this process. The idea that it’s going to fatigue is not necessarily the case. What will happen is that some brands will do better than others. Not all brands are worth paying for. It will change how we evaluate successful brands versus not successful brands.
We continue to see the subscription model flourish — in Silicon Valley and tech businesses generally; in content businesses (news, opinion, fashion, tech, and more); and in service businesses.
To incentivize the creation of quality information, you need a model that’s immunized to a high degree against untoward influences and which serves a devoted audience that can punish the publisher with losses if the audience feels lets down.
These basic lessons are becoming clearer with each passing day.
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- Will Platform Regulations Affect Publishers?
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- A Look at Library Subscription Costs
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