This post was originally published on AIIM's Expert Blogs by Serge Huber, CTO at Jahia Solutions
These days, paywalls are appearing here and there, and are the latest experiment in ways to build revenue streams for content providers such as newspapers and magazines. The offerings may vary, often providing a limited amount of free views per month and then asking you to subscribe to get more. For publishers, the challenge when setting up paywalls is to make sure they’ll help build a long lasting relationship with customers instead of trying to make a quick buck and loose the customer’s trust.
Paywalls are viewed by some as a necessary evil, making it possible to still make some content available for free, in order to evaluate the service, but using limitations that entice users to pay to access more content, usually using a subscription option. One of the most talked about paywalls, since it struggled for a long time with different models until it settled on the existing one is the New York Times paywall.
The New York Times is, arguably, a very good content producer, and producing good content has its costs. It is only normal that a content company wants to make money doing what they do best, building revenue directly from the content they produce. Sometimes producers lose track of this and try to build revenue through other models, and this is when it starts to get problematic.
Let’s look at subscriptions in the real brick and mortar world. Does anybody immediately subscribe to a newspaper without knowing it ? Of course not. What you need as a customer before you subscribe is to learn about the content, experience it for a while and start building a trust relationship with the content provider. So you could start by borrowing a friend’s copy, or read it somewhere where it is available for browsing (such as in a doctor’s office waiting room). Some providers offer you a free month evaluation period, where you will get the actual product at no cost for a limited time. This is where things start to go wrong.
If a company starts getting too greedy too early, this will completely destroy any trust relationship that was previously established. Again, if after an initial free period the subscription automatically goes into effect without any effort from the customer this might be great for the content provider but it might not bode that well with the customer, who may or may not have wished this.
Also, a lot of subscription services make you go jump through hoops or even make you pay for early contract termination, which is another reason for customers’ reluctance at using subscriptions. This is a real shame since subscriptions should be a great way to cement an growing trust relationship, and in these examples exactly the opposite happens.
The same is exactly true in the digital world, except that here technology makes it even easier for providers to abuse the trust and get customers into subscriptions they may have never even asked for in the first place. Of course companies will protect themselves by putting legalese into the contractual terms, but who really reads them nowadays, especially when they are very long and hard to understand ? Again, putting small clauses in a legal contract that most people do not read is another sure way for the customer to feel cheated and distrust a corporation.
So what is the solution ? I’m not by any means saying that there is a single one or that it is a silver bullet, but I believe that a good compromise is to also offer a pay-per-use payment solution. In the real world, you usually have the possibility to purchase a magazine or newspaper issue, and this is usually what you do for a while before even considering a subscription. If you like the content produced by a content provider, and that you buy it on a regular basis, then a subscription will make all the more sense to you since it will not only be more practical, it is also usually cheaper than buying every issue. So in effect the trust relationship was established to a point where it became natural to go to the next step.
You might be wondering why free trial periods are problematic ? Since the customer can experience content for free for a while, why would this not help build a trusting relationship ? Well the first part of answer might surprise you, and this is mostly irrational: most people associate something free with something of little value (see Predictably Irrational, a great book on the subject, that actually illustrates this behavior). So in effect providing the content for free might have the exact opposite effect that you were expecting. Even if this seems far-fetched, there is another problem with trials : the trial period itself. Sometimes it is far too short for a proper evaluation of the content, since the customer may or may not have had the time to devote to evaluating the content.
When a customer is discovering new content, he is usually doing so on his own time, at home, while commuting, or other places. Of course there is some content that is work related and in this case things are quite different, evaluation is part of the day job and can be done seriously, in which case trial periods are usually fine. But has it ever happened to you that you have registered for a trial period and then never had the time to even evaluate the content during that time frame ? It has happened to me far too many times and I believe I’m probably not the only one in this case. Now suddenly the period has expired and the content provider is asking for my money. I guess you get the problem here :)
One solution that is gaining a lot of traction is to get people to evaluate the content and track how often they come back to it before offering them a subscription or another payment solution. I believe this makes more sense, provided it is again not setup to be too greedy.
So if you are in the business of selling content to consumers, I believe you really should be careful as to always remember that a satisfied customer, even if it took some time to acquire him, is immensely more valuable than a customer that felt cheated. It might seem obvious stated that way, but in effect some companies are still introducing paywalls that are too greedy. Sometimes in the process of settings things up it is easy to lose track of the initial objectives.