As a boy, I used to deliver the Winnipeg Free Press in the pre-Internet days — a time when newspaper profits were robust and the only disruption we worried about was snowstorms.
On my after-school route in the late 1970s, the delivery bag overflowed with newspapers, and I had about 75 home subscribers among 100 addresses on three streets.
Today, the Free Press delivers to only 42 homes on those same three streets.
With that reality in mind, the Free Press made a conscious decision in 2015 to stop trying to apply the business approach from our legacy heyday. We introduced a paywall for our digital platforms, but not just any ordinary paywall. Instead, we decided to give readers options that reflect their different consumption patterns.
Simply offering online subscriptions was not going to turn back time and deliver the market penetration we enjoyed when I was a paperboy. Instead, we needed to do something more, something different — something that would work given the reality of online purchasing habits.
In what was a first for newspapers in North America, our paid digital strategy offered our audience two options when erecting a paywall.
Yes, we had an-all access pass that let readers dine on everything we produced for C$16.99 per month. But our second option broke new ground: we charged readers only for what they read and required no minimum purchases or any prepayments. For C$0.27 per article, readers could dine à la carte in much the same way iTunes allows you to buy what you want when you want.
“The flexibility provided by our paid option has enabled an almost commitment-less option for our readers. It lowers the height of the paywall and monetises audiences who would otherwise leave,” explains Christian Panson, our vice president of digital.
The results of this new thinking have been more than promising. We are generating revenue growth every single day from those who choose a monthly online subscription and from those dining a la carte.
More importantly, those using our read-now-pay-later (RNPL) option provide us with opportunities to increase not only their spending, but also convert them to monthly online subscriptions.
At one level, our micropayment customers are just like those who paid C$0.25 cents to buy the newspaper at a shop or from one of our street corner boxes back when I was a paperboy.
But at another level, these single-copy readers are fundamentally different. When someone buys the newspaper at the store or from a box, we know nothing about them. Under the RNPL system, we not only know who they are and how to contact them, we also know what we they are reading.
Based on their consumption patterns, we can reach out to them and entice them to read more. We can deliver straight to their inbox our morning news briefing, Head Start, to increase the value proposition of the Free Press and pull them deeper into our readership funnel.
“Once a reader enters a paying relationship with us, even at only C$0.27, the biggest barrier of entry has been overcome, and the next step in our customer acquisition effort is so much easier,” Panson says. “More than 15% of our ‘read now pay later’ audience goes on to become an ‘all-access digital’ subscriber. Out of those ‘all-access digital’ subscribers, 30% also opt to receive a Saturday newspaper, so even the legacy side of the business benefits.”
The early evidence of our RNPL option shows the Free Press is on course to avoid the penetration pitfalls that have tripped up paywalls elsewhere.
To succeed, we needed a strategy that does more than just generate an initial spike in readership revenue. And that strategy is delivering ongoing steady growth and a means to not only get more readers in the door at C$0.27 per article, but also drive them into making the long-term commitment at C$16.99 per month.
It’s the kind of success that has this former paperboy excited about our future.
“Newspapers need to stop thinking there is some silver bullet that will solve the challenges facing our industry,’’ says Free Press Publisher Bob Cox. “Rather we need to look at a variety of approaches to secure our future success. Micropayments are but one example of the innovations the Free Press is pursuing to that end.”