How much is paid access to content?

Almost every newspaper, magazine or website thinks about how to organize paid access to its content, and closely follows what others are doing in this area. And almost everywhere, managers look sullenly at projections of advertising revenue, finding discouraging figures in them. Those who are already published in the figure also cannot escape from the disappointing forecasts for the coming year: the poor economic situation only exacerbates the pressure on the price of advertising in the already growing host of websites and mobile pages. At best, volumes and prices will remain the same. With regard to sales of printed copies, Western newspapers are likely to witness the continuing erosion of the readership, which will be reduced by another few percent.

But there are interesting moments. The strongest players do not just bow down to the inevitable, they accelerate their transition to numbers. This week I discovered that the two leaders took the same step. The New York Times and the Financial Times have announced a serious increase in prices for their retail sales of newspapers (25% and 13.6%, respectively).

• The New York Times raised prices from $ 2.00 (€ 1.57) to $ 2.50 (€ 1.96) for issues Monday-Saturday, Sunday left at the previous price of $ 5 (€ 3.92) in New York and $ 6 (€ 4.72) beyond.
• The Financial Times raised prices from £ 2.20 ($ 3.39 or € 2.66) to £ 2.50 ($ 3.85 or € 3.03) for weekly issues, while weekend issues rose from £ 2.80 ($ 4.32 or € 3.39) to £ 3 ($ 4.62 or € 3.63).

These numbers make sense. A ten percent increase in prices each year may be justified by adjusting inflation, although a very greedy adjustment, since inflation in these countries ranges from 2.5% -3.5%. Therefore, an increase in the price of 25% is a strategic decision aimed at accelerating the transition to the figure. (The paper version of the Financial Times now costs 25% more than last October).
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It is quite interesting to note for readers of the New York Times that reading a newspaper on the network at the minimum subscription ($ 15 per month) is now 40% -50% cheaper than writing home for it, and 70% cheaper than buying it every day. stall.

Both editions do their best to transfer readers to a paid digital model. The Financial Times is aiming to figure at full steam, far and wide, studying its four million base of subscribers to turn them into a paying audience (according to the most recent estimates, there are 250,000 of them). The tactics of the newspaper is simple. Readers are constantly pushed for paid access by reducing the amount of free materials. In 2007, the user was given free of charge 30 articles per month, now - 8. Another important step was mandatory registration, even if the user wants to read just one article.

The New York Times last year showed a less clear strategy — regulated paid access. And it looks like it worked. The newspaper managed to collect 324,000 paid subscribers for 9 months. Given that she has four times fewer non-paying registered users than the Financial Times (and therefore less potential for conversion), this is not bad.

The Times builds its paid strategy on three key factors:

1. The uniqueness of the content. Let's just say: with regard to the brilliant journalistic work, the New York Times has no equal in the whole world. This content allowed to collect 34 million unique visitors in the domestic market and another 47 million worldwide. No other newspaper in the world has such a loyal audience. If the New York Times manages to convert at least 5% of its global audience (say, 2.4 million readers) and achieve $ 150 in annual ARPU (including both subscription and advertising), it will bring her 360 million euros, which will certainly cover the costs of the content is known to be the most expensive edition in the world ($ 200 million per year).
2. Adjustable porosity. One of the key factors in building a paid access system was to preserve as many readers as possible. There are two reasons for this. A large audience size is critical for advertising to be sold. In addition, you need to glow at every corner, this ensures the brand is known. Thus, a system appeared, aimed primarily at the most "voracious" users. But even they could easily deceive the system. Without making much effort using several browsers and devices, I never once came across an offer to pay. Similarly, pricing was arranged. Prices for the same content ranged from $ 15 to $ 35. This approach is typical when working with an audience that is able to pay in different limits. It has long been known that rich people tend to buy the most expensive package possible, regardless of its real value.
3. Flirting with Apple. From the earliest days of the iPad, the New York Times has worked closely with Apple on applications, subscriptions, and Newsstand. I repeat: thanks to its brand and earned trust, the newspaper has no problems with collecting user data that other applications are not available by default. The Times received its bonuses from Apple's huge advertising budgets. The Apple ecosystem is highly efficient in terms of building an audience. But it makes paying for it the most important - relations with the audience, plus a huge fee of 30%, which should be no more than 10%. That's why the Financial Times decided to break this collar . Last week, she went even further. She bought Assanka , a developer company that gained fame through its web application that provided Apple with newspaper independence. In itself, this acquisition demonstrates the commitment of the Financial Times to mobile products - HTML5 development remains very complex, and the newspaper considered it crucial to integrate the development tools of Assanka.

Of these three factors, content is the most important. The inflation generated by the aggregators, and the habits of social reading, the natural reproduction of information acquired the character of a flood. In such conditions, the production of special content and its protection become the key condition of value. As for pricing, there is no magic formula. Usually, the simpler the better. (This was demonstrated to us by Apple.) Especially for a business starting from scratch. But when there are already different segments of the audience, for example, corporate and private subscribers, the pricing of products becomes difficult. It must be borne in mind that diversified prices can prevent cannibalization. Regarding the choice between Apple and independent distribution, I personally think that contacting Apple is beneficial only in the short term, this is an easier strategy. But in the long run (there is a question of faith in Apple itself), self-distribution will bring better results.