How to make your digital readers want to pay — from micropayments to social media subscriptions
As media publishers continuously announce paywalls for their premium content, so are consumers becoming more aware and demanding of the content they read online. This has created a debate, covering a user-willingness to prioritise, and pay for, digital news. Though lately, it seems, the focus has slightly shifted. No longer is the debate asking ‘will consumers pay for quality content?’, but rather ‘how many different subscriptions can a consumer put up with?’
With Quartz, The Information and Axios spearheading the subscription models a few years back, showing the payoff of a paywall, other actors have followed ready to find inventive ways for newsroom monetisation. And the outcome is of considerable size. Call-to-action micro support payment seems to have worked well for The Guardian. The new project The Correspondent put their trust in pay-what-you-can-memberships. The Economist and The New York Times, among others, work with a ‘soft paywall’ that will allow for a small amount of free articles per week.
While it is true that different monetisation models work for different actors, in this article we hear from two micropayment platform pioneers describing how their solutions can enable consumer revenue without signing up for numerous subscriptions.
Cosmin Ene, Founder & CEO of LaterPay, sees that a combination of choice and trust based models will help publishers succeed in monetising more users going forward. He describes that with their patented Pay-Later model, where readers do not pay until they’ve reached a $5 threshold, they help onboard users into paying customers.
Aaron Lindner, Head of Product at SatoshiPay, describes a model of two-way payments with transactions logged on blockchain. This way publishers can, as well as receive money from their users, also pay a small sum back to encourage newsletter subscriptions, community contributions or content interaction.
Also given a voice is Karla Geci, Head of Media Partnerships EMEA, Facebook, who explains their strategy to test support for subscriptions models in Facebook Instant Articles and how it can generate high revenue.
Karla Geci, Facebook: ‘ The ad revenue publishers generate from a page view in Instant Articles is higher than an equivalent page view on the standard mobile web’
GEN: The sign up button for news publishers was unveiled this year. What was the motivation behind it?
Facebook: Through the Facebook Journalism Project, we heard directly from many news publishers that subscriptions were a top priority for their business, and that they wanted a way to encourage people to subscribe to their news outlets on Facebook. So we worked with a diverse group of partners to design, refine, and develop a test suited for a variety of premium news models. Since October 2017 we’ve been working with publishers across the world to test support for subscriptions models in Instant Articles with the goal of improving subscriber acquisition from Facebook. Transactions happen directly on the publishers’ websites, so publishers have full control over the relationship with their reader, including data, payments and pricing.
For over a year, we’ve also been developing other tools in Instant Articles to help publishers build deeper relationships with their audiences, including Email Sign-Up and App Install buttons. For many publishers, the goal is that this ultimately leads to a paid subscription, and we want to help facilitate that relationship within Instant Articles and on Facebook. Publishers not using Instant Articles already have the ability to implement paywalls and subscription models on the mobile web.
In which countries did you test the button first? Why did you start there?
We started testing in the US and Europe, expanding to LATAM earlier this year. We sought publishers with an existing subscriptions model, and the engineering resources needed to work with us to implement the paywall.
How many news organisations are currently making use of the tool?
We’re still testing this with around a dozen partners across the US and Europe.
The Washington Post, La Repubblica and San Francisco Chronicle are a few of the publishers to to test support for subscriptions models in Instant Articles.
Has the button driven subscriptions? In what markets is it driving the most subscriptions?
Results so far are promising: in May 2018, people who saw Instant Articles from publishers in our test group were 17% more likely on average to subscribe to those publications directly from Facebook than people who saw standard web links. The test is providing positive results for the majority of publishers involved, and we’re focused on making improvements for those who have not yet seen a meaningful lift.
How will the button benefit local news organisations?
The publishers currently testing the subscriptions paywall are typically larger organisations who have access to in-house engineering resources. However, in the US we’ve also launched a Local News Accelerator — a USD 3 million pilot programme designed to help news publishers build their digital subscription revenues. Funded and organised by the Facebook Journalism Project, the programme includes hands-on workshops led by news industry veteran Tim Griggs, a grant-making programme administered by The Lenfest Institute for Journalism and regular reports on best practices authored by both The Lenfest Institute and the Facebook Journalism Project.
Originally designed to be a three-month programme, in August 2018 we announced that we’ll continue to coach the group of metro news publishers from the pilot programme until the end of this year, and we will reconvene with them in 2019 to focus on subscriber retention.
We also launched the Facebook Membership Accelerator, a USD 3.5 million, three-month pilot programme designed to help news organisations with membership models take a bold step forwards in their membership approach and execution.
According to Tow Center research, news organisations are said to be abandoning Instant Articles due to a lack of monetisation. What is in the pipeline to go against the trend?
Instant Articles are going from strength to strength. Over 10,000 publishers around the world use them, we pay over USD 1 million per day to publishers in ad revenue, and CPMs continue to grow. They’re the best format to distribute articles on Facebook, and we continue to be committed to delivering value to publishers. We’ve made significant ad monetisation improvements in the last year and are encouraged that the most recent feedback from the majority of publishers is that the ad revenue they generate from a page view in Instant Articles is higher than an equivalent page view on the standard mobile web.
What advice can you give to news organisations to make the most of what Facebook has to offer without diluting their brands?
We understand the importance of brand visibility for news organisations on Facebook. Since 2017 we have been developing new ways for publishers to highlight their brand on Facebook, including in Instant Articles. As part of our Local News Accelerator we’ve also been talking to participants about branding and digital subscription acquisition marketing, and we plan to publish some best practices in early 2019. For more information on creating content for Facebook, news organisations can visit our dedicated Facebook for Media site.
Cosmin Ene, LaterPay: ‘We help publishers monetise users that will never become subscribers by reducing the commitment, offering content at a fair price, making the purchase easy and providing immediate access’
GEN: In your own words, how does your company work?
LaterPay: LaterPay allows users to purchase content or to contribute to quality journalism online with one or two clicks — without registering or paying in advance. This reduces the transaction time to just a few seconds and increases conversions significantly. Users are prompted to register and pay only when their online tab reaches $5. Our publishers have seen better success selling articles, videos, timed access to content, ad-free experiences, and subscriptions with our patented pay-later model.
We help publishers earn more revenue in two ways. First, we move readers from the middle of the subscription funnel towards becoming subscribers, with a double digit percentage of readers who have purchased content with LaterPay converting to subscribers. Second, we make it very easy to generate direct revenue from the 90% of readers who will never subscribe. This amounts to significant revenue for publications, with no cannibalisation of subscriptions.
A special ingredient of our success is the patented Pay-Later capability which enables us to gently onboard users into paying customers. Users are 2–2.5 times more likely to repurchase when offered to pay for the content later.
How many news organisations are currently partnering with LaterPay?
Over two hundred across the German and the United States markets with customers including Salon.com, The Boston Globe, and The Pulp in the U.S, and Bergedorfer Zeitung, 16 of VRM Group’s news publications in Germany
How do you ensure a smooth user experience?
Our payments model reduces purchase friction for the user. The traditional upfront registration and payment process results in minuscule customer conversion rates. In contrast, the LaterPay model defers the registration process until a customer’s tab (this includes purchases and contributions) reaches a $5 threshold. Only then we ask users to register and pay — at which point 85% of all users register and pay. Some users described their experience of buying with LaterPay to be as easy as ‘liking something on Facebook.’
How will you evolve — what’s on the roadmap for the next few years?
The inherent flexibility of the LaterPay model means that it can be employed in a number of ways.
For example, we recently developed the LaterPay Button for contributions and donations, allowing publishers and nonprofits to collect financial support from users, while maintaining a superior user experience. The LaterPay Button lets users make monetary contributions with a single click and turns the impulse to do good into real transactions within seconds. Publishers and charities have observed a five times participation rate with the LaterPay Button.
Additionally, we’re focusing on partnering with Content Management System platforms in order to improve the integration process and enable publishers to start using LaterPay even quicker.
Using our pay-later model as a base, we will adapt and develop complementary features based on the industry. Generally, we communicate features and products only once they are developed and ready to use.
Why do you think more and more people are willing to pay for news?
With the shift in publisher revenue sources away from ad-based and increasingly into reader-based, the paywall has become more common, resulting in the changing attitude of the user when it comes to paying for content. However, it’s also becoming apparent that users are willing to pay only for what they consume and they expect a very seamless process with a variety of choices. With technology, publishers can now segment users based on their consumption needs. Some users will be willing to commit to a long term subscription, others will be happy to pay for access to a publication for a day — like buying from a newsstand — or purchase a single piece of content. A different group will pay more to avoid ads. There is no single ‘catch-all’ model because there isn’t one ‘typical user’. A combination of choice and trust based models will help publishers succeed in monetising more users going forward.
How is value assigned to a particular piece of content? What types of news article, for example, would be most expensive?
Values are assigned by the publisher or content creator. We provide the technology, user data and BI and publishers are in full control of their use of it. They control pricing, revenue models and they run LaterPay on their own properties. Based on our experience with publishers, an investigative report or any longform journalism piece would carry a higher price tag than a smaller feature. We always recommend that publishers do some price testing when they implement LaterPay.
How does LaterPay create loyalty for readers to news organisations?
We create loyalty by servicing users in the most frictionless way possible today, allowing the reader to access quality content before they have to register and pay for it. It’s a model based on trust and consideration of user experience, which translates to loyalty and repeat business. In fact, we recently found that users are up to 2.5 times more likely to repurchase with the pay later model than when asked to pay now.
Our model offers publishers the ability to convert their mid-funnel readers, that is readers that are already loyal to their content but have never paid for it, to becoming subscribers. Additionally, we help publishers monetise users that will never become subscribers by reducing the commitment, offering content at a fair price, making the purchase easy and providing immediate access.
What makes you stand out from your competitors?
- Users love our trust based, super simple way of buying content. Our pay later capability is what sets us apart and what really resonates with users. Our frictionless user experience based on trust and choice helps publishers monetise fly-by users, occasional users and non-subscribers and ultimately converts more users into subscribers.
- Our integration methods which range from the super simple creation of LaterPay Buttons within 30 seconds to a more flexible and in-depth API integration. The LaterPay Button can be created in 3 steps and within 30 seconds on our website and while the generated code snippet can be embedded into any CMS, the link can be used in websites, email newsletters or messaging apps like WhatsApp. Our Connector integration enables an integration within minutes, essentially by dropping a few lines of code into your frontend. And then there are the plugins for Wordpress, video players like FlowPlayer, JWPlayer and the flexible API integration.
- LaterPay is the industry’s first solution for on-platform monetisation. We empower content providers to stay in full control, monetising their own traffic as well as traffic from referral sites directly on their platform.
Aaron Lindner, SatoshiPay: ‘Our vision is to enable seamless and fair value exchange between any internet-connected device’
GEN: In your words, how does SatoshiPay work?
SatoshiPay provides a micropayment platform that gives publishers options to monetise content beyond advertisements and subscriptions as well as to engage users by rewarding them for certain actions. Publishers can now ask their readers directly to contribute small amounts — from a few euros/dollars to less than a cent — in various ways:
- Simple pay-per-item for text, images, video, audio, downloads
- Timed access (e.g. hour/day/week/month pass) this could be combined with ad block detection (only ask users with ad blockers to pay) or an ad-free experience provided by the publisher
- Value-added content, e.g. subtitles to a free video
- Pay per usage, e.g. by seconds watched on a continuous live stream
To increase user engagement and retention, publishers can also pay small amounts back to users e.g. to incentivise newsletter signups, community contributions or interaction with certain content or ads (two-way payments).
What benefits does SatoshiPay offer to the publisher?
It offers a free launch funding. Through our partnership with the Stellar Development Foundation, who runs the blockchain we use, we received a large marketing grant which allows us to pre-fund user wallets. The grant is currently worth approximately 10 million euros and we use it to support the launch of new publishers on our network.
It also shape user behaviour by training people to get used to paying for content (an on-ramp to subscriptions).
Additional revenue opportunities
SatoshiPay capture revenue from users who:
- Already have several subscriptions and are reluctant to add more
- Simply don’t have the means to add a $10–20 subscription to their monthly expenses (e.g. certain international users)
- Are interested in the content, but new to the publisher and not yet ready to commit to a long-term recurring subscription.
- Global & currency-agnostic
- Reach a wider audience. It makes no difference where users are located and what their native currency is. Even a user in a developing country can now afford and pay for premium content.
What benefits does it offer to the user?
First, it offers to save on currency exchange fees. For example, a UK user trying to purchase digital content priced in USD with Paypal will face steep conversion fees. That is not the case with SatoshiPay.
Also, users are able access to more premium content that had been locked behind a too-expensive subscription-only paywall or offered by overseas publishers in a foreign currency.
We offer an ad-free experience: data related to ads makes up the vast majority of many ad-supported sites, significantly slowing them down.
Sites currently relying on ads and user tracking for monetisation could offer a cleaner, faster, ad-free user experience.
We put a strong emphasis on privacy, and do not share data. Unlike data-based ad targeting systems, SatoshiPay does not track and collect any user data. Transactions and balances are logged on the blockchain, not our servers. Unlike classical subscription systems, users do not have to provide name, email address, or any other personal data to use SatoshiPay.
What sets you apart from your competitors?
- Split payments
- Two-way payments
- Ability to pre-fund users
- Instant payouts, starting from the very first transaction
- No chargeback risk
- Not holding user funds offers several operational advantages:
- No central database that can be hacked or fail
- Lower security requirements
- Removes requirements to apply for various e-money licenses in each jurisdiction we serve
How do you communicate about something as complicated as blockchain to your users? Or do you downplay it?
When it comes to ‘users’, we have to distinguish between two groups: the publishers on the one side, and their audience on the other side.
- We indeed do openly communicate to the publishers that SatoshiPay is based on blockchain technology (as already indicated by our company’s name), as this comes with exciting new possibilities, and we want to attract innovative publishers to work with us.
- With regards to the end users (and therefore our client UX) we indeed do not offensively communicate the blockchain aspect, but instead focus on a rather familiar user experience. That’s because we have to make sure that all end users feel comfortable using our payment solution, regardless of whether they are tech-savvy or not.
How will your product evolve over the next few years? Do you have any goals in mind?
Our vision is to enable seamless and fair value exchange between any internet-connected device. To that end, at the core of SatoshiPay is an Application Programming Interface (API) that provides the “plumbing” to the actual blockchain. It makes developing applications utilising blockchain payment infrastructure very easy.
Our payment solution for online publishing is merely one application that sits on top of this API. Based on feedback from publishers, we have exciting ideas to develop it further, targeting big publishing houses, but also smaller long-tail bloggers and creators. Long-term, we see very interesting use cases for our API, e.g. in the areas of Internet of Things (IoT), Machine-to-Machine (M2M), gaming, loyalty programs, metered applications, etc.
We also invite third-party developers to use our API in other creative ways.
We are planning to go public this year which should provide us with enough funding to pursue this long-term strategy.
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Karla Geci: Head of Media Partners Programs, Facebook EMEA, UK. Karla partners with media organisations and content creators to help them leverage Facebook tools and products and enable social news and video experiences on digital surfaces. Karla joined Facebook in 2010 and was then responsible for growing adoption of the Facebook Platform in EMEA and partnering with the Facebook developer community.
Cosmin Ene is an entrepreneurial founder with first-hand understanding of the life cycle of entrepreneurial ventures, which he has accumulated over 20 years. Startups he led went through all stages of development from initial idea to marketing and sales, including business development and financing. In 2010, Ene started LaterPay, a micropayment enabler.
Aaron Lindner, PhD: In the last 10 years, Aaron has successfully co-founded two startups and realised several internet and media projects for the renown Max Planck Society. Aaron is active in the blockchain space since 2012 and now drives the product roadmap and growth strategy for SatoshiPay, a micropayment solution that gives publishers novel monetisation options with many creative use cases next to advertising and subscriptions.