New research indicates tight meters have won the pay model war for news websites

As the search for effective revenue models for online news sources continues, many websites have kept their content free. Newspapers, however, have erected a variety of pay models, including a variety of metered models.

When newspapers first went online, the generally accepted wisdom of the time was that their content had to be free. It was argued that “free” was necessary to attract eyeballs, and that’s what the advertising model required: LOTS of eyeballs.

That unearthed two problems. 1) The eyeballs weren’t worth much, less than a tenth of a penny today, and 2) only the three or four largest national newspapers could attract enough of those eyeballs to raise enough pennies to sustain even a portion of the business.

So our industry spent more than a decade stumbling through various experiments. The Dallas Morning News put up a pay wall, later killed it and went back to free, and this past year launched a new pay model. It wasn’t the only newspaper to ping pong through the decade.

The conversation became dominated by semantics (subscription or membership?), pricing (wet your finger, stick it in the air, and see which way the wind is blowing?), and sampling (metering, allowing a certain number of free views before asking for money). These all have provided valuable learning experiences.

Research at the Missouri School of Journalism indicates our industry has finally found a pluralism in approach: a metered pay model with 10 or fewer free reads before a reader/viewer would be asked to subscribe, donate or register.

More than 300 news websites were surveyed, 236 of them newspaper websites. Of those 236, nearly three-quarters had a metered model. And of those 170 websites, almost 90 percent limited free views to 10 or fewer.

To find out more, including results for broadcast and digital-only news organizations, click the link on the left to download a pdf of the summary report.

It’s refreshing to note that the industry has upped its game in researching and analyzing its opportunities and business options. A few years ago researchers from the University of Missouri worked with The Seattle Times to determine optimum content bundles (print, digital, mobile) and optimum pricing for each bundle. Smarter than a wet finger in the air.

Now The Seattle Times is getting smarter about attracting readers to those bundles. The programmers there are experimenting with algorithms that help 1) widen the funnel of prospective readers, 2) determine which of those readers are most likely to respond positively to an invitation to subscribe or join and 3) at what point(s) in that journey down the funnel would they be most likely to accept such an invitation. This is the kind of data collection and analysis that many industries and companies use, but it’s relatively groundbreaking for the news industry. It’s briefly mentioned in this story from Kristen Hare at Poynter

Follow RJI in coming months to learn more about experiments in more sophisticated approaches to growing digital subscriptions.

This report was created by Anna Lewis, a Discovery Fellow at the Missouri School of Journalism. Discovery Fellows are high-achieving students selected from incoming freshmen to conduct undergraduate research. Lewis, from Moberly, Missouri, is now a sophomore at the University of Missouri.

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