Answering The 7 Paywall Questions That Worry CTOs 1 Introduction On Paywalls The 2021 expectation for paywall ROI is high, especially for those considering it for the first time. News organisations are counting on paid content for an additional, reliable source of recurring revenue and higher audience engagement among subscribers. This comes at a turning point for the media industry as a whole, amongst a mass migration of readers from physical to digital sources. 2 Introduction There are significant challenges that every newsroom faces For those already earning through online revenue streams, when they launch paid content. Marcela Kunova, Editor of the recent outlawing of third-party cookies, expected the British Journalism website Journalism.co.uk said that, to come into effect next year, has created an impetus “Many newsrooms still struggle with the concept of paid- to move away from reliance on advertising as soon as for digital content. Poor knowledge of their audience [is an possible. The industry as a whole has begun seeing paid issue], having no idea whether their readers will actually subscriptions as not just a lifeline, but a catalyst that has 76% pay for online content.” Further, there are exhaustive, the potential to define publishing for the next decade. of publishers have a paywall but only micro-decisions that must be taken every step of the way that can complicate the decision making and slow down But as alluring as these rewards are, it’s worth noting implementation, go-live and ultimately, ROI. from the get-go that a paywall isn’t just a software buy into the tech stack, it’s a fundamental organisational shift. With that in mind, we interviewed some Digital Officers The C-suite, editorial, commercial and tech – ergo the and media purveyors to help identify the pain points entire organisation – must buy into the concept of paid encountered along the way to successful paywall content and successfully pivot their thinking to support 10% implementation – so you can avoid them. the strategy and implementation that is needed to achieve have a thriving digital success. The misconception that you can just ‘buy and revenue model. Read on for answers to the ‘what?’ ‘why?’ and ‘how?’ forget’ partly explains why, according to recent research, questions that surround the set-up and implementation 76% of publishers have a paywall but only 10% have a of paywalls. thriving digital revenue model. 3 The Planning Stage 1. Should I build a paywall? To paywall or not to paywall This is the fundamental question that must be One motivation for publishers to launch a paywall “ It is the combination answered before any other, and the answer is FOMO (fear of missing out), which has been felt should provide a concrete response to the “why?” industry-wide. An Italian Media CTO we spoke to said of falling advertising question too. Paywalls require time, money and “everyone is moving in that direction, everyone in effort, so it’s important to understand where your Italy is doing it. Everyone in the USA has a paywall revenue and the investment is going before getting started. or is moving in that direction, so it’s only a matter of time.” For this publisher, external national pressure growth of digital that Kunova notes that “[it is] the combination of plus the added impetus of the global pandemic falling advertising revenue and the growth of accelerated their decision and provided them with finally convinced media digital that finally convinced media owners there’s motivation to get started quickly. money to be made from online readership.” Of owners there’s money course, the ability to paywall hasn’t been around But FOMO wasn’t a factor for Marco Di Bernardo, forever, only becoming a mainstream option after the CTO of Switzerland’s 20Minuten, instead he to be made from online The New York Time’s blazed a trail by putting their worried about another very real issue that’s been content behind a paywall back in 2011. And even talked about on the internet for the past couple of readership.” then, it’s taken a decade for the NYT to squash years: the impending deprecation of third-party concerns from all its critics, as it nears 8 million cookies. “We are a free sheet, we don’t sell only paying subscribers today. advertising... our mission is to turn our community into a registered community.” Zephr 4 The Planning Stage The larger the proportion of the revenue mix taken up by advertising for a publisher in 2021, the more cause for concern there should be. Google and Facebook capture over 65% of the digital advertising market in the UK, and the outlawing of third-party data will only make it harder for media companies to compete. Finding your answer to “why?” is very important before taking any steps into the world of paid content. But there is no single right answer. If you are looking to avoid the stick of declining advertising revenues and the end of third-party cookies, or are more incentivised by the carrot of reliable, recurring revenue and deeper customer relationships, then a paywall is the way to go for your organisation. Zephr 5 The Planning Stage 2. Is it better to purchase a paywall solution or build your own? Build vs. buy This consideration depends entirely on the For some, this isn’t an option not just because of The New York Times, capabilities of your organisation, the number of upfront costs, but due to the immense amount Bloomberg reported, spent developers you have in-house and whether they of effort and time it takes to make changes have the ability, and more importantly, the time, once your paywall is up and running. In-house to build what you need. Bigger publishers like the builds are slow to move and make iteration and New York Times, Axel Springer and the FT have the experimentation very cumbersome. It can take months + tech resources to build, implement and iterate a weeks, if not months, to code a new decision 14 paywall quickly, but the majority of publishers do engine off the back of commercial strategy not. The New York Times, Bloomberg reported, changes, and for publications with smaller spent 14 months and $50m on their paywall over developer teams, this is simply not feasible. ten years ago - time and cash most publishers Di Bernardo added to this point, “nowadays $50m don’t have to spare. there is no good reason to build software in on their paywall over ten this area because there are so many good years ago - time and cash players in the market.” most publishers don’t have to spare. 6 The Planning Stage András Kárpáti, the CTO of Telex, sums it up nicely: “both buy or build solutions can achieve your goals, and there are advantages and disadvantages to Danuta Breguła, the former Subscriptions both; if you buy, you have to know Manager at Poland’s Gazeta Wyborcza, pointed out some of the merits of an internal build. She what the system can do, but if you explained that today’s media industry is as much build, the system can only do what about marketing and experimentation as it is about editorial, meaning that many different you know.” stakeholders need to be involved in the decision making. Those that decide, and can afford, to Ultimately, the decision to buy or build comes build in-house, have additional control over which down to the capabilities and demands of your features and capabilities to implement. This organisation. For the majority of publishers, gives you choice at the beginning, but also makes the build option is out of reach due to limited changing your mind or pivoting strategy much resources, and even for larger organisations the more difficult. decision is far from obvious. Increasingly powerful and flexible tools available on the market make paywalls much more accessible to all publishers, and their ease-of-use benefits businesses looking to make quick changes and iterations at scale. 7 The Planning Stage 3. What do I look for in a paywall provider? Choices, choices, choices If you do choose to buy, the next decision is It’s important to identify your needs before how to find a paywall provider that works for starting your research because a web search your organisation. or colleague recommendation will help you uncover a lot of vendors. There are “more On the market these days, there are two types than 30” paywall providers on the market of commercial SaaS providers – end-to-end these days, according to the Italian CTO we that try to encompass the entire paywall interviewed; he said that when you start to ecosystem, and “best-in-breed” solutions look at functionality and features, the list of that do specific operations, but better, and fit providers “becomes very short because most neatly together in your stack. Best-in-breed of them are quite basic.” This is where your providers typically have extensions that specific goals come into play. If each paywall connect to other best-in-breed technologies, on the market has specialist capabilities, so interoperability is a snap. you need to decide which are of most importance to you. 8 The Planning Stage For example, Di Bernardo noted that 20Minuten “ It was highly Make sure you are with the right company to was looking for vendors that provide just a rules avoid sunk costs coming back to haunt you. engine, without a lot of other unnecessary add- important that Full, detailed demos are available from any decent ons. He explained: “We don’t need subscription SaaS provider, so take the time to fully explore management or an integration to Salesforce, we whatever solution and understand what you are signing up for.