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Put readers at the center of your paid content model with sponsored access

By Nikolay Malyarov


Richmond, British Columbia, Canada


I think most people would agree that trying to stop the print revenue hemorrhaging with digital advertising is like slapping a Band-Aid on a gunshot wound. 

In 2015, that wound grew into a cancer that some fear is poised to tear apart the very fabric of the World Wide Web. The growing epidemic of ad blocking, malvertising, and fraud is much more than a wake-up call for publishers; it’s a ticking time bomb.

Readers must be front of mind in creation of content models.
Readers must be front of mind in creation of content models.

Fueled by advertisers and publishers who put a mad rush for elusive profits before people, the industry is now paying the price for treating the Web like a dumping ground for its digital debris.

So many media executives still do not seem to understand that people — not brands — now own the Web, and those people have the power to dictate what they want and don’t want in terms of media.

Readers are discerning and not afraid to voice their opinions about content.
Readers are discerning and not afraid to voice their opinions about content.

Traditional paid-content models are not reader-centric

The good news for magazine and newspaper publishers is that people’s appetite for news (actually, content in general) has never been greater.

But the conundrum still faces media executives every day: How do they monetise the masses when the willingness to pay for digital news is trending in the wrong direction?

Readers want content, but they are not necessarily willing to pay for it.
Readers want content, but they are not necessarily willing to pay for it.

I have to give credit to publishers who are experimenting with a number of different paid-content models to find the magic bullet. Unfortunately, they’re not seeing the returns for which they hoped.

• Metered and hard paywalls: Publisher paywalls have largely plateaued. Even the poster child of paywalls, The New York Times with one-million+ digital-only subscribers, has seen its growth flatten in recent years.

The New York Times' digital subscription rates have hit a plateau.
The New York Times' digital subscription rates have hit a plateau.

The Times’ goal is to reach two million digital subscribers by 2020. If it is lucky enough to maintain its 20% growth rate, it will reach that. But most other publishers can never hope to reach the same level of “success.”

The entire Tribune Publishing’s catalogue of titles has less than 90,000 digital-only subscribers. Perhaps it’s because the publisher erected hard paywalls around its content (the move to metered is scheduled for Q2 2016). Or maybe it was because ousted CEO, Jack Griffin, held fast to the belief that 20-something-year-olds will gravitate to printed newspapers as they move into adulthood.

Regardless, it’s hard not to think that the willingness to pay for digital content will continue to decline, making paywalls, metered or otherwise, just a short-term, good news story even for the most iconic publisher.

• “iTunes for news”: Blendle received a lot of fanfare in 2015 and showed some promise in select European countries, proclaiming it had reached approximately 500,000 users.

But ask most industry pundits and you’ll probably hear they love the micropayments company, although they don’t expect it to succeed in North America due to the wealth of free content and competition on this side of the Atlantic.

• Newsstands (Google Play, Amazon, Zinio): Apple shut down its newsstand, and Google continues to tinker with its similar product, while Zinio tries to reinvent itself. No one has ever made this model work.

Interestingly, publishers love distributing their content through newsstands because they look and act like the physical kiosks of old. They just can’t give up on the print paradigms of the past — to their detriment.

• Freemium/premium: Often credited to Hulu, this freemium (with ads) or premium (without ads) model has been adopted by a few publishers (e.g. Bild, Gruner + Jahr) that are trying to recover their losses from the adblocking pandemic.

Unfortunately, this solution creates competition between ad revenue and subscription revenue where the only answer is compromise (it’s one or the other, not both). This is not a recipe for success in the long term.

• “Netflix for news”: Having been part of pioneering this popular all-access content model in 2003 (before Netflix, Spotify, Readly, Magzter, or the likes of Next Issue/Texture even existed), I can tell you that, as much as readers love the model, the monthly subscription costs demanded by publishers are far too high for the digital masses.

Certainly there are readers — let’s call them news junkies — who are willing to pay to access to the whole universe of content, but they are a niche market with little growth potential. I like to compare them to the music aficionados who still purchase vinyl records — a highly discerning crowd, but not a market loaded with money.

Clearly it’s time to disrupt today’s paid-content models. Give readers what they want and publishers will discover the secret to monetising the masses.

Someone has to pay

I am a strong believer in journalistic excellence and an advocate for its compensation. But I also believe readers shouldn’t necessarily be the ones doing the paying. Sound crazy? It’s not so far-fetched when you think about it.

Businesses have been sponsoring access to printed magazines and newspapers for many decades in hotels, cafes, clinics, offices, lounges, and on airplanes. Why should it be any different in digital?

It shouldn’t. In fact, if anything, the B2B relationship between businesses and publishers should scale exponentially, providing significant value to their users and revenue for themselves.

Introducing the “sponsored access” model

Every consumer-centric business on the planet is feeling the effects of disruption, whether they are technology- or business-based. Music, movies, television, hotels, libraries, restaurants, and travel are all feeling the heat from the likes of Spotify, Netflix, Expedia, Airbnb, Uber, Lyft, etc.

Traditional businesses know they can’t compete on cost, so they are desperately looking for ways to differentiate themselves and create loyal relationships with customers, patrons, employees, and visitors through value-added services.

A number of hotel chains are already creating new Millennial-friendly brands (e.g. Radisson Red, Tru by Hilton, citizenM) to provide them with the Gen-Y experience they desire.

A unique service gaining serious momentum across all industries worldwide is sponsored access to premium content because it provides distinctive value to their highly diverse target markets, and it makes dollars and sense to them.

For example:

  • Hotels no longer want to deal with the daily delivery and recycling of tens of thousands of newspapers that only offer one choice to customers when they can delight them with the world’s press in the palm of their hands.

  • Airlines are tired of paying millions of dollars in extra weight costs every year just so they can carry only a limited selection of printed publications for their passengers.
The cost of distributing print newspapers on airplanes is exceedingly expensive.
The cost of distributing print newspapers on airplanes is exceedingly expensive.

So it’s no wonder why these organisations (e.g. Fairmont Hotels, Seabourn Cruises, Qantas Airways, and Uber, to name a few) are sponsoring access to thousands of publications for their guests, patrons, and passengers.

The business model is brilliant in its simplicity:

  • Hundreds of millions of readers receive complimentary access to 5,000+ magazines and newspapers.

  • Publishers pay nothing to be part of this exclusive service, and they get paid when their content is read.
The sponsored-access paid-content model is a win-win opportunity.
The sponsored-access paid-content model is a win-win opportunity.

Everybody wins:

  • Readers enjoy frictionless access to their favourite titles.

  • Companies offer their customers a unique and high-value, eco-friendly gift, helping them differentiate themselves from the competition and grow brand loyalty.

  • Publishers reach a massive audience at no cost to them, while increasing revenues and audited circulation.

Barriers to entry are high

Sponsored access at a global scale is a huge opportunity, but creating partnerships with thousands of businesses and aligning their needs with the world’s media is a mammoth undertaking with major challenges.

Technology challenges

It’s pretty easy to build an aggregated site of magazines; there are dozens of companies doing that today with more popping up every month because issues are published intermittently, allowing time for the manual processing of feeds.

But to process thousands of daily, weekly, and monthly newspapers and magazines 24/7/365 requires sophisticated, automated content processing solutions you can’t buy off the shelf like digital publishing software. The technology takes years to develop and financial investments to continually enhance and maintain it — it is a system that is extremely difficult to replicate.

Partnership challenges

For sponsored access to succeed at a global scale, thousands of partnerships need to be negotiated between businesses and publishers. Not only do the relationships need to be fostered, there must be seamless integration between the publishers’ content and the business’ back office systems, apps, and customer experience strategies and tactics. They must align.

The partnership between Qantas and PressReader is an example of how sponsored access can work.
The partnership between Qantas and PressReader is an example of how sponsored access can work.

Embarking on this journey is not for the faint of heart. Take my word for it: I have been there and got the airline points to prove it.

And it would take years for publishers to build enough relationships to start to reap any rewards on their investment — time publishers and businesses just don’t have in a world where the only constant is disruption.

Marketing challenges

Although the opportunities are great with sponsored access, it is no Field of Dreams. Just because a business offers access to premium content doesn’t mean people will come.

To build awareness of the partnership with users, companies must promote it before, during, and after the customer has connected with their business. This includes physical (e.g. hotels), regional (e.g. municipalities and events), and virtual venues (e.g. loyalty programmes, Web sites, and apps).

It is important to market premium access at every touchpoint.
It is important to market premium access at every touchpoint.

Meanwhile, publishers must market their content to existing and new readers. Let your loyal readers know you understand what they want and need. In-publication native and glossy advertising are excellent ways to reach readers who already know you. Relevant out-stream video and non-intrusive online advertising on all your digital properties are also good.

Advertise within the paid-content service itself to draw the attention of new audiences through primary carousel placement in the app and glossy or video ads between articles. And don’t forget to exploit the power of the partnership with cross-promotional advertising.

Advertise content and cross-promote with partners to increase audience size.
Advertise content and cross-promote with partners to increase audience size.

Think and act like a start-up

Well-known speaker, philosopher, author, and founder of Omega Vector (an organisation that teaches the art of self-knowledge), George Addair, once said, “Everything you’ve ever wanted is on the other side of fear.”

I think that quote is very appropriate in the publishing world today, where fear infiltrates almost every aspect of the business — fear of disruption, fear of adblockers, fear of cannibalisation, fear of brand irrelevancy, and, let’s face it, fear of extinction itself.

Too many are still caught up in the glory days of print when brands ruled the media and readers read the news editors curated for them. It was a “publisher knows best” domain that has since been overthrown by the me generation, but too many publishers refuse to see the writing on the Web.

This myopic mindset is repelling readers and causing rifts in the business-publisher relationship with media execs who still insist they have the right to dump printed media in front of hotel rooms and on jetways.

Is it hubris? Is it ignorance? I don’t think so. I think it’s just an industry paralysis propagated by fear.

If I had a wish for 2016, it would be that publishers would start to think and act like a start-up, reach for what’s on the other side of fear, and embrace the enormity of the possible for their readers and themselves.

I know … it’s not easy, but as they say, nothing worth having ever is.

About Nikolay Malyarov

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