Since I’m lightly employed these days, I enjoy keeping up with the news. In recent weeks, I’ve been blocked by the paywalls of the Wall Street Journal, Globe & Mail (closest thing Canada has to a national newspaper), the Times/Sunday Times (of London), the Telegraph (also UK), Business Insider, and Bloomberg. Recently I got a bit of inside info on how these publications think about the economics, and I’m here to explain why they’re wrong.

Background · As a family we already subscribe to the NY Times, the Washington Post, the Guardian, the Vancouver Sun, the Economist, Talking Points Memo, Heated, and The Tyee.

Here’s a table of a few publications and their subscription prices, normalized to US$/year, sorted in order of ascending cost:

Business Insider$99.00
Washington Post$100.00
Wall Street Journal$119.88
New York Times$221.00
Guardian$240.00
Globe & Mail$272.61
Telegraph$399.36
Bloomberg$419.88
Times of London$665.60

Discovering these prices was nontrivial; many are hidden behind an “intro rate”. Also, they’re quoted per week, per month, per quarter, per four weeks (really?!), and per year. Where multiple rates are quoted, I took the yearly one.

Looking at this, I think I see an immature market; which is to say, the mapping between price and value is not orderly.

How they think about it · Earlier this year, I had a lot of chances to talk to journalists. More than once, this happened. Journo: “I’ll send you a link when this publishes.” Tim: “Yeah, but I won’t read it, you’re paywalled.” On these occasions, if the journalist seemed capable of hearing, I gave them a lecture about how, since I wasn’t going to subscribe, there should be a way for me to pay a bit and read their piece. One of them, I forget who (sorry), explained How Management Sees It.

First of all, they’ve got a figure in their mind of how much they’re going to make if they can get me to click on that “Subscribe” button. They’ll have a model where a certain number will unsubscribe during the initial-rate period, a few will drop off later in the first year, and some will become long-term subscribers. This journo suggested that the figure in management’s mind looks something like half a year’s subscription. Which, looking at the table above, is a figure in the rough range of $50 to $300. Part of the calculation includes the fact that most of us are lazy and administratively incompetent and just won’t get around to unsubscribing, even if we want to.

The next step in their thinking involves an estimate of how much they could get for an individual article view. It’s hard to imagine anyone being willing to pay more than a buck. Minimum price… Who knows? Our current bank infrastructure isn’t good at micropayments, which makes it harder. Of course, you could imagine some sort of intermediary service which pools per-article payments to many publications and could probably do micropayments, but nobody’s gotten traction with one of those yet. Furthermore, this intermediary starts to smell like Doordash, a service that controls access to your clients and charges you an onerous revenue slice. Every restaurant hates them.

Thus we get to The Ratio. Let’s be generous and assume you could get a buck for access to your article. Then ask yourself, “How many of those to I have to sell to make as much money as I would with a subscription?” Dividing that dollar into the that half-a-year-of-subscription number, the subscription is going to be worth somewhere between 50 and 300 times more valuable than the article.

So, says Mr Manager, “Why on earth would I invest in selling individual articles when a click on the “Subscribe” button gets me a hundred times the revenue?”

Why they’re wrong · Their arithmetic didn’t consider their chance of getting me to click on “Subscribe.” In my particular case, that chance is almost exactly Zero. I subscribe to enough things and I am acutely reluctant to give anyone else the ability to make regular withdrawals from my bank account. I don’t think I’m unusual. People may not be financially sophisticated, but they’re smart enough to see through the “initial-price” flim-flam and a lot of us are highly conscious of our own administrative futility and the fact that we might just not get around to unsubscribing. I’ve seen this called “Subscription fatigue” and I think that’s a decent label.

“But wait,” says Mr Manager, “you already subscribe to five publications, so you’ve proved you have a propensity to subscribe! You’re exactly my target market!” Wrong. It’s exactly because I’ve done some subscribing that I’m just not gonna do any more.

“Hold on,” he says, “I’ve got an excellent publication, full of great journalism and delicious writing. I should be able to compete with those other things and maybe displace them!” He’s got a point, and it’s not fair, but he’s still wrong. Maybe it’s just that those other guys got there first. Maybe it’s just my administrative inadequacy. Maybe you’re just not quite as valuable as those others just yet. But de facto, your chances of replacing any of them are pretty damn small.

The way forward · Note that this section will, like the rest of the piece, completely ignore advertising. The life has been entirely sucked out of advertising-based publishing by the Facebook/Google duopoly, and absent vigorous antitrust energy from various governments, it ain’t coming back. Actually, I think there’s hope. But hope isn’t a business strategy.

So I think the only way forward is to figure out how to sell articles. It’s not gonna be easy, and if I were the publications I’d also really not want the equivalent of a Doordash getting in the way.

It dawns at me that if I were still at AWS, I might propose offering Digital Content Volume Sales as a Service. “Simple Article Sales Service”, SASS. Maybe I should write a PR/FAQ.



Contributions

Comment feed for ongoing:Comments feed

From: Andrew Ducker (Sep 27 2020, at 14:12)

My favourite approach to this is the one from https://scroll.com/ - where I pay them a monthly subscription and they split it between the sites I read, based on page views.

They aren't charging nearly enough at the moment, but for the vast majority of sites, where I only want to read one article every few months, I can't think of a better approach. I can see it maybe working in tandem with subscriptions, where if you read more than X articles on a given site you have to subscribe to see more.

I'm not willing to pay a dollar per article (I read hundreds of articles per month, just widely spread), but I am prepared to pay for access.

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From: Mukund Mohan (Sep 27 2020, at 15:46)

The worst part is to CANCEL WSJ you have to call them except if you are from California, and you can cancel online. Cancelling is a pain for all of them.

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From: wuxiekeji (Sep 27 2020, at 16:06)

Cancelling should be relatively easy if you can just use a temporary credit card number. When you want to cancel, simply revoke the credit card number. Also send them an e-mail saying you'd like to discontinue the subscription and will be no longer paying.

If they didn't read the e-mail, it's their fault. End of story.

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From: Nick Schonning (Sep 27 2020, at 16:32)

The word "seemed" is duplicated in "seemed seemed capable"

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From: Paul McIntyre Royston (Sep 27 2020, at 16:32)

There’s already something built very well for this, your public library. They maintain access to PressReader to virtually every newspaper in the world and they pay for the privilege. You use your library card online to access them. I do it all the time, there’s no paywalls, and I can get access to whatever I want to. All through a small amount of tax dollars that goes to my public library

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From: Matt Taylor (Sep 27 2020, at 16:50)

From working in media, another problem with micropayments is deciding on that dollar cost.

Without coming up with some administration of value to each article (which I'm not saying isn't worthwhile, it's just not something that's typically done) -- and perhaps even then -- it's very challenging to come up with a value that readers might understand.

If everything is $1, but long investigations or in-depth reporting costs more than that, how do you stop losing potential subscribers (who would contribute more ARR) to these payments. And equally on the (admittedly large) percentage of stories that might not have such value, how do you price them?

This is why subscriptions tend to work. Slowly you can weed out material that isn't working for either acquisition or retention. But you are always going to have articles that are good retainers but poor acquirers. To a micropayment reader the value of that article is low, but to subscriptions it may be higher. You might never do that article if you marked everything by its CAC value, but if you didn't you may lose $5000 ARR.

How on earth do you price it fairly?

It's complicated.

I'd be in more favour of more expensive 24hr passes that show the value of the subscription to regular readers. Say $3 for 24hrs, and $30 for a month. I think in terms of small payments that's as close are you're going to get.

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From: Andrew (Sep 27 2020, at 19:24)

The global-subscription, shared revenue model is what Apple is trying to do with News, isn't it? Yes, the papers that join up are going to have to get used to their audience being owned by Apple, and the concomitant 30% fee. No, I don't do Apple services, so I don't know if that is a real thing.

I subscribe to a couple of independent news publishers, but agree that there are a lot that aren't ever going to get my money.

I suspect that the world of "news" is going to be reshaped quite radically in most of the world, as the old business models break down. I have no idea what they'll be replaced with. There will be a lot of free sources, funded by the publishers who want their story out: PR houses and press releases, statutory bodies, amateur punditry. There will be some that costs money, paid for by people that can estimate its value: the business newswires, for example. There will be large and increasingly obvious holes that open up around kinds of writing that used to be assumed to have value but turn out not to have.

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From: Michael (Sep 27 2020, at 21:23)

I personally have a few subscriptions, use the VPL digital library and as a fallback use archive.is from archive.org to see if someone has archived the article.

The VPL digital library is excellent and you can access many resources from outside the library as long as you have your membership details to hand. In particular press reader via the VPL is really useful https://www.vpl.ca/digital-library/pressreader

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From: Robert Cottrell (Sep 27 2020, at 23:51)

The single-article sales model is an unbundling model. Publishers are right to resist it, since their existence is predicated on bundling. What writers and readers need is a Medium that works — where the writer sets the price of a piece and receives the payment directly; as opposed to the current Medium model of a site-wide paywall.

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From: Dave Pawson (Sep 28 2020, at 00:18)

I pay for the Guardian (I like the 'free' with a nag, it hooked me). I keep getting links to NYT, but I can only read a few a month, so rarely use it. Newspapers still working out an online model and I agree a subscription isn't the way forward for many. Your table of rates shows how variable it is.

Thanks for the larger print Tim. Appreciated.

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From: Gavin B (Sep 28 2020, at 00:51)

Of course the Guardian is free to access whether you subscribe or not.

So you might safely share deep links into its archive without much fear of breakage - as Alan Rusbridger explained in his book Breaking News in 2018.

Thanks for subscribing BTW.

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From: Johan Stuyts (Sep 28 2020, at 01:08)

I think one of the biggest obstacles for micropayments is a lack of an open, standardized system. Each publisher and each reader should be able to choose their preferred provider. This way there will be actual competition, and better solutions for both will be developed.

Currently, as a publisher you have to bet big on 1 of the platforms. Do you choose Scroll (as mentioned in one of the earlier comments) or Brave Browser or ...? After choosing you will have to invest to integrate them into your website. If it turns out they are crappy, start charging too much, fail, etc. you will have lost that investment.

And as a consumer you have to get an account at the provider chosen by the publisher. I can imagine this can result in dozens of accounts, all of which (regularly) need some money deposited on them.

Without standard ways to indicate that you have to pay for an article and to actually pay for it, I think there is very little chance of micropayments becoming viable in the near future.

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From: Robert Cottrell (Sep 28 2020, at 01:38)

The single-article sales model is an unbundling model. Publishers are right to resist it, since their existence is predicated on bundling. What writers and readers need is a Medium that works — where the writer sets the price of a piece and receives the payment directly; as opposed to the current Medium model of a site-wide paywall.

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From: Frank (Sep 28 2020, at 01:44)

I feel like you're missing a final conclusion here: could offering a second option as a substitute for subscription not in fact reduce the conversion rate for subscriptions? You say no, from your personal perspective, but I suspect yes.

Say the conversion rate from pageview to that 100 bucks is 1%, so the expected value of a pageview is 1 dollar. If you add a single-purchase option, say you get a conversion rate of 10% on this option. If you only had that option, your expected value per pageview is 10 cents.

Now, if as you say, the second option can be introduced without affecting the first, i.e. 11 % convert, 10% to pay-per-article, 1% to subscription, the expected value is additive as you suggest: $1.10. But if there's at least one person out of ten subscription buyers (one in a thousand pageviews) who instead chose to buy a single article, your subscription conversion rate falls to 0.9 %; the expected value per pageview thus drops to 1 dollar.

If the pay-per-article option dissuades one potential subscription buyer out of ten, the investment doesn't generate any additional revenue. If that dissuasion is larger, the investment has a negative pay-off.

I don't know what the actual figures are - I leave the remaining math as an exercise to the reader - but I suspect this dynamic effect is a concern in newspaper offices as well.

Came here from HN btw.

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From: Jeremiah Lee (Sep 28 2020, at 02:18)

I think the Web Monetization API currently incubating as a proposed W3C standard would provide the experience you are desiring.

Consumers establish a wallet provider and install a browser extension (for now, until the standard is formally adopted). When a Web Monetization HTML tag is encountered, the browser starts streaming micropayments every second while you are engaging with the content.

Content creators can then do things like grant access/remove the paywall, not load/remove ads, or offer bonus features.

Today, GQ, Wired, and ~1,000 other sites are experimenting with the Web Monetization API. The only wallet provider right now is Coil, but the protocol is well defined and ready for other players.

References:

- https://webmonetization.org/

- https://coil.com/

- https://mobile.twitter.com/WebMotized

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From: Ruby Noble (Sep 28 2020, at 02:43)

We are working on this at satotious.com. Satotious is a unique twist on a paywall: free access with ads or with micropayments.

We use the Bitcoin Lightning Network to do micropayments. The publishers and users can transact directly without middlemen(not even us), so there's no cut.

We still have the ad option to onboard new users.

Finally we have a browser extension and app to get around "decision fatigue". Making constant purchasing decisions is a major drawback to micropayments.

Feedback appreciated!

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From: Maese Gasofa (Sep 28 2020, at 02:47)

As someone has already said, this is unbundling their business. And one you unbundle youself, someone else (probably Google or Apple) will re-bundle it with things that are out of your business line (what about an Apple Music subscription with your fries?)

One thing you are not mentioning is the cost of these subscriptions. While I could see me paying 0.99$ for an article of my interest, I am extremely reluctant to pay say 10 bucks for a monthly subscription. But 4.99$ could do the trick, may be.

But this takes us to the other side of journalism, it's the articles that not many people care about what make for good journalism!

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From: Bojan (Sep 28 2020, at 04:28)

"Telegraph $399.36"

Not sure where this price comes from - I'm paying £12/month for digital edition of everything they offer, which comes to about $180/year. (And that includes UK tax of 20%, not sure if 'worldwide' price would be any different?)

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From: Paul McCarthy-Brain (Sep 28 2020, at 05:43)

We started our company looking at micro-payments and developed the tech. The problem wasn't the digital wallet it was an identity management issue, no one is going to fill in forms to get access to a newspaper when they are going to spend 20c so you need auto-enrollment on supporting publications and a means to co-exist with existing subscription models. You will never convince the news industry to sacrifice an existing source of revenue so the system needs to compliment subscription systems. If anyone is interested we have a full system working at scale as SAAS and happy to get involved in the conversation as I've done a lot of thinking and discussions with major publications on this. - excuse typos.

Paul

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From: Patrick Altman (Sep 28 2020, at 06:42)

An easy way to make the article purchases a non-micropayment is the ability to purchase X articles at a time. Say, $20, gets me 20 articles. Maybe $20/month gives me 25 articles that add to my balance.

Audible functions like this. $20+/month adds a new Audible credit to my account that even after I cancel my subscription I can still use (I think).

I find it far easier to pay subscriptions for applications than I do for content for some reason. Content I tend to want to buy piecemeal than subscribe to the firehose.

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From: Chris Nicola (Sep 28 2020, at 08:00)

Completely agree with this. The future of publishing (for better or worse) is micro-transactions. Sufficiently friction-less payments around $1 or more.

However a lot of platforms have already tried and failed at this, which I believe largely down to the stickiness of the existing revenue model. Publishers and even authors are reluctant to just walk away from that.

I can speak from experience about just how hard it is to disrupt a pre-existing revenue model of significance even if it is also slowly dying.

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From: Jimme (Sep 28 2020, at 08:10)

Jamatto has been enabling publishers to offer pay-as-you-go to their readers.

Rather than subscribing monthly, our newspaper clients also offer a day-pass, priced very reasonably at 20c-70c for the day (or even simply to read ad-free for the day).

It's a very effective alternative to those consumers wanting to contribute but who have reached subscription fatigue.

Get your newspapers to give us a call :)

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From: Reg Whitton (Sep 28 2020, at 08:12)

I'm wary of subscribing to services that require committing lump payments before I'm sure of the value it will bring. Free trials sort of make sense, but if I have to cancel before charges start being levelled, then the fear that I will forget stops me.

My proposal to the newspaper industry would be to note that: no one pays for old news. Why put all that old content behind the paywall when it could be showcasing what you do. Your subscribers could be linking to the good stuff that us cheap skates have to wait to read.

Traditionally in the UK, unsold papers returned to the distributer would be given away to be used as wrapping for Fish & Chips. Who knows how many customers liked what they read enough to start paying for the paper.

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From: Mark S (Sep 28 2020, at 10:13)

As someone above said, why not just use the library or archive.is or archive.org to read articles that you want to read?

The US is using the Guardian to justify jailing Assange for life

https://www.jonathan-cook.net/blog/2020-09-22/guardian-silent-assange-trial/

It would be hard to justify spending all that money on the publications you subscribe to, rather than giving that money to GiveWell or other effective altruism orgs, or just flushing that money down the toilet.

Isn't news orgs a net negative to society?

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From: Andrew Wooldridge (Sep 28 2020, at 20:02)

Have you heard of the javascript spec called webmonetization? https://webmonetization.org/ It does exactly what you were referring to. You set aside some small amount of money each month, and based on the amount of time you spend on a web monetized article a trickle of that money goes to that author directly. I've used it for many articles and game and things and it seems to work as expected. There's a browser plugin "Coil" that hooks into the spec and manages the transactions. Thought you might find it interesting.

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From: Dominic Young (Sep 29 2020, at 06:19)

We have to accept that single articles have become the entry point to publishers' products. The internet has made it that way. But the product overall is where value lies and the relationship builds, especially for lower value products like local news and tabloids. In a newspaper, after all, 100% of the content changes every day but the product overall remains the same.

To have a sustainable, scalable, business model publishers need to form habit-based relationships with their readers. For a very small proportion of them, this might be deep enough to become a commitment - subscription. For the rest, subscription is too big a barrier.

Having wrestled with these issues for a long time within a publisher, I built a company to address and solve the perverse and unaligned incentives which twist the current market out of shape for everyone - publishers and consumers alike. It starts with payment for a single article, but then rewards deeper engagement and loyalty. Give it a try, it's called Axate. www.axate.com

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From: Dan Farrow (Sep 30 2020, at 08:30)

@Paul McIntyre Royston thanks for the PressReader tip. I've just check & my local library (Hackney, London, UK) gives me access

@Dominic Young - hi Dom, fancy bumping into you here :D

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From: Chris Jones (Oct 07 2020, at 00:54)

I'm a bit surprised that publisher-owned entities (e.g. a publisher co-op) haven't emerged as the means to do micropayments: that neatly sidesteps concerns about a gatekeeper with its own interests.

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From: Barclay (Oct 09 2020, at 09:59)

why do they feel it must be either/or? yes, we're all strapped for coder time but i bet this would pay for itself in lost subscriptions.

to arrive at a price, use your valuation metric. let's say The Guardian decides an article is 1/120 as valuable as a subscription: then charge $2 per article; if it's a short piece, halve that, if it's a longie, double it. a heuristic to assign price is a cakewalk.

for me, somewhere around a dollar per article would be low enough for me not even to give it a second thought. can we not use Paypal?

re this from Andrew Ducker:

> I'm not willing to pay a dollar per

> article (I read hundreds of articles

> per month, just widely spread), but

> I am prepared to pay for access.

this person is probably a good candidate for a subscription.

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author · Dad · software · colophon · rights
picture of the day
September 25, 2020
· Business (121 fragments)
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