A year after introducing its micropayment system, the Winnipeg Free Press has 35,000 subscribers to its digital content. It was the first Canadian newspaper to monetise its content via micropayments with impressive results.
Panson started by issuing a caution: “Micropayment isn’t that silver bullet that will suddenly save publishers and keep them alive — but it can help, and as a tool it’s quite effective.”
The Winnipeg Free Press paywall is a hybrid system, with micropayments as a small but important part of that system. The system incorporates these levels:
- Free: Frictionless.
- Trial: E-mail and consent.
- Payment: Reduce commitment.
- Subscriber: Recurring payment.
“The lion’s share of our readers live in the yellow zone: the free, frictionless experience,” Panson said.
The Free Press has about one million visitors per month — 300,000 of those go through the log-in page for a personalised offer, but 700,000 never get past that.
Reader options and experiences
When a reader goes into the 60-day trial period, they see the same page every time during those 60 days, to familiarise them and reinforce the brand. After the trial period is up, the reader receives a very personalised offer.
“The primary way that we do that is to drive people to the site over and over, through social and other methods,” Panson said.
If the user has been reading less than 40 articles per month, that offer is a micropayment model of paying US$0.27 per article. If their consumption is higher than 40 articles per month, the subscription offer is recommended.
The fundamentals of the Free Press micropayment system are:
- Almost all content is paid at the US$0.27 level.
- There is no wallet on the site.
- The company offers a refund.
- Post pay model with a transparent balance.
- Delayed charges of around six seconds in case there is an accidental click.
- Once an article is purchased, the reader owns it forever.
“Local content sells for us, but that’s because that’s the content we promote the most and what people who are visiting us are most interested in,” Panson said.
Also, every article is refundable if the reader doesn’t get value out of it; however, the refund rate is very low.
“If people complain about price, it’s that there is any price at all, that it’s not free. People never complain about the actual cost itself, US$0.27.”
Winnipeg Free Press readers
With more than 40,700 paying digital readers and 7,337 digital subscribers, the Free Press is selling about 892,000 articles per month. There are 26,150 activated print subscribers.
“We found that activating our print readers really reduces our churn, and reduces the load on our customer service team,” Panson said.
The news media company has generated around 5,000 new print readers by offering digital subscribers a special Saturday print edition value.
“The biggest benefit we’ve really seen from micropay is that it lowers the commitment,” Panson said. “What we created was this pattern of behaviour — it was a pretty high wall to cross, when the reader just wanted that one next story. Commitment is a big barrier, too; it’s not just the money. That notion that I’m going to be tied to something, I’m going to have to cancel later.”
Micropayment eases them across that bridge by just allowing the reader to pay a small fee for one article at a time that they want. “Micropayment allows people to get into the habit of paying for news, and reinforces the value of the content, because we’re saying that every piece of content has value.”
A side effect of this system is that it allowed the Free Press to lower the number of articles a reader is able to access for free. This has improved both activation and churn rate.
Micropay is the ultimate debundle — you decide exactly what you want to read and what you want to pay, Panson said: “It allows for personalised debundling and is our upsell vehicle. Getting people across and then upselling them has been a very useful tool in getting new subscribers.”
Explaining the different options and moving people into a different way to read and pay for news is a cognitive challenge for the company. “No matter how strong our communication plan has been, it’s been really hard to communicate the concept around our paywalls to our customer,” Panson said.
Micropay is something most customers aren’t familiar with in many markets, so there’s a learning curve to get familiar. The limited sampling of reading articles for free first with this model is also a challenge.
Micropay is not a big revenue generator, Panson said. It does well, but it doesn’t generate a huge amount of revenue: “We are constantly moving the high-value micropay readers into our subscription model.”
Also, the lowered meter reduces ad revenue. “Most of the [ad] revenue we lost is low-value, so in a lot of ways it isn’t a lot of risk. That ad revenue is dwindling anyway.”
INMA: Does getting them to constantly pay for each article give the reader the message of “pay, pay, pay?” And how did you get to the US$0.27 figure?
Panson: The reader drops in their payment method, and then we keep track of their balance. You add your payment once and never again, so it is frictionless. They aren’t going through the payment process every time. We offer day passes as well. I’m sure for a certain amount of readers, they don’t like it. But we’re willing to have some erosion from our readership by asking for money.
In general publishers need to be willing to do that, to stand up for the value of the work we do. When we talk to our micropay readers, no one really complains about a “nickel and diming” approach. In general though, I don’t think the US$0.27 is a burden. I think they’re quite happy to access this at a lower price than they would pay by subscribing. Because it’s such a trivial amount, we actually think the purchase hurdle is lower than it would be with a higher monthly metered model payment.
On the US$0.27 price, we did some research and deep analysis. We had a target of at least 10,000 people who were reading too much content to go with US$0.27 (in other words, would subscribe instead). Originally we came up with US$0.31, so decided to go just a little under US$0.30. Also, an off, quirky number like 27 (instead of 25 or 30) is interesting and catches attention.
INMA: Do the journalists have any issue with the pricing?
Panson: When we launched, one model I thought was interesting was variable pricing. But it’s hard to make the judgment of how and what to charge and becomes a lot of effort. Increasing the US$0.27 by a few cents isn’t going to do much to add to our revenue, but it could be a trigger for more people to convert to all-access digital subscriptions. But we probably won’t go above US$0.35 if we increase.
INMA: What do you think is next in this micropayment space?
Panson: For us, I think the next move would be going to day passes and make those seamless transitions to our subscription packages. What I wanted to do with this at the start was make it a really risk-free proposition. I would like to have a system in place where micropay users who exceed payment for articles of a subscription level that would easily upgrade them.
“We’re always trying to reinforce trust and to make our communities better and stronger,” Panson said.