POLITICO is joining the stampede toward metered paywalls. In a twist, it will remain free in regions where it’s most popular.
Bylan Byers (“POLITICO to test metered paywall”):
POLITICO today announced that it will start testing a metered subscription system in six states and internationally. For at least six months, those readers will be required to pay for content after consuming a set number of pages on the website. POLITICO will test different price points and page limits “to find the sweet spot for our readership.”
The experiment will go into effect next week in the states of Iowa, North Dakota, Vermont, Mississippi, New Mexico and Wyoming.
From the memo to staff members:
We believe that every successful media company will ultimately charge for its content, using a variety of price points and methods, so it is very important we build real metrics to see how this trend will play out on POLITICO. The result will also help inform future decisions on other investments the company hopes to make in the media space.
Here is how the experiment will work: Readers overseas and in six states will be required to pay for our content after consuming a set number of pages of it, much like they do when visiting The New York Times, The Boston Globe and scores of other news sources. We will experiment with a few different price points and page limits to find the sweet spot for our readership. We chose smaller states, spread across the country, so our experiment captures any regional trends and also limits any potential loss of traffic to the site. This will last at least six months, so we have a large enough sample to appraise the results.
The decision to test a broader subscription model represents a shift in our thinking. As recently as a few months ago, we thought it was premature for POLITICO to start asking readers to pay for content, outside of Pro. But, it is increasingly clear that readers are more willing than we once thought to pay for content they value and enjoy. With more than 300 media companies now charging for online content in the U.S., the notion of paying to read expensive-to-produce journalism is no longer that exotic for sophisticated consumers. This is a very promising, if uncertain, trend in our country. The collective decision by media companies to give away for free a product of high value and high cost will go down as one of the worst, self-defeating moves in the history of industry.
Except that this had long been the model. Daily newspapers, including the Washington Post, are offered at extremely low subscription prices so that they can have maximum distribution and rely on advertising revenues to sustain the operation. Alas, the availability of massive amounts of constantly-updated material online diminished the value in having a print subscription. Indeed, I ended my WaPo subscription years ago and would have done it years sooner if my late wife didn’t want the Sunday inserts.
The most unique aspect of POLITICO is that unlike other media companies, we often sell out our ad inventory in the Washington, D.C., market because demand for our ad space is so high. This means it’s highly unlikely we would ever institute a metered system in the D.C. area. The economics wouldn’t work because every company that has put a subscription system in place has seen some decrease in traffic, as you might expect. We want and need that traffic in D.C. because the desire of advertisers to reach our elite audience here is exceptionally strong. For you non-business folks, that is a very good problem to face.
Outside of Washington, what we will look for with this experiment is whether or not we can bring in more revenue through paying subscribers than we lose as a result of any decline in traffic. This is a fairly straightforward calculation – and one that will instruct our future thinking in this area.
So, amusingly, the place with the highest concentration of political wonks who want to read POLITICO is therefore the place where the advertising model still supports the operation. Out in the hinterlands, where most people reasonably view the daily machinations of Washington pols as tedious, the relatively few people interested in reading POLITICO will have to be punished.
It’s a strange world.
