How (and why) should Publishers add Micropayments to their Paywalls

How (and why) should Publishers add Micropayments to their Paywalls

Publishers are flocking to subscription Paywalls, serving a fraction of their most active users. What about the rest? What are the threats they face from focusing only on them and not serving the other 90% of users who reach their site but don't want to subscribe?

Long term threat

The top 3 publishers (NYT, WSJ, WaPo) take 50% of the subscriptions. They are getting stronger financially and technically faster than the rest of the ecosystem and this will make competing with them harder and harder, especially on subscriptions.

  1. This creates a virtuous circle of the strong getting stronger with more money and better technology. Since it is a zero sum game on subscriptions (users won't subscribe to many different outlets) your main competitors will have more and better tools to compete with you for the same users (think Google and the ads ecosystem)
  2. The big three will need to grow and thus will go into any news product that has any margin left (local, sports, recipes…). (think Amazon and retail)
  3. As users are locked into platforms, they will see less of your offers, consume less of your content and your acquisition costs will increase dramatically while your content offering will be fractional. (think Facebook being “the internet” in many parts of the world)
  4. As aggregation services (Apple News) proliferate, the publishers brand will begin disappearing as it is ranked side by side with cheap offers. This will turn you into a news source, not a consumer brand. (do you want to be Reuters or AP)

Current subscriptions risks

  • Demand Curve - when you start subscriptions you get the users who need your product, As you exhaust these, you begin trying to entice users who don't need your product to subscribe via discounts and offers (see NYT for $1/week) turning news into a commodity

  • User Trust - the media business model then becomes one of “bait and switch”.  Convince them to join for $1/week and later jack it up to $30 and make it impossible to unsubscribe. Businesses like this lose consumer trust and in the long run, do not thrive.
  • Subscription fatigue - consumers are bombarded with subscription offers (content, Services, products (e.g. shaving blades) to the point that there are apps built to find unwanted subscriptions and alert users. When a user sees they are subscribed to your publication AND the NYT - which one will they cancel?  How many news publishers will they subscribe to per category?
  • Content Discovery - Assume you produce amazing content - how much of it? How will a user ever see it if they are locked into a specific ecosystem?  Do they need it if they are subscribed to NYT?  Maybe it's just the unique pieces they might want but they cannot see them since they are paywalled and the user lives on the NYT site.
  • Bad user experience - like it or not, you are a consumer tech company. If you do not build delightful experiences, someone else will and eat your lunch. To convert people to subscriptions who don't need it, you are destroying the user experience for everyone.  Offers/email capture/auto playing video ads / screen takeovers… Brute forcing users to take your offers is not a long term sustainable business.

How to implement Micropayments - some thoughts

  1. Micropayments will give you a portfolio of monetization options - ads, subscription and Micropayments.  Subscription is the top of the demand curve and ads are at the bottom with Micropayments filling the middle
Making all your content available to all your users but not for free

Making all your content available to all your users but not for free

Start with traffic that converts poorly, low cannibalization risk high potential value (found money):

  • AMP sessions.
  • Users outside your DMA.
  • International users.
  • Shared links or sessions from social media.
  • Low propensity to convert score.

The Micropayment button is shown where you want it - maybe users who come to your homepage for the first time shouldn't see it.  Users who have come to your site from shared links 20 times, seen all your offers and never converted should see the button. You can limit the number of Micropayment transactions a month. Maybe more than X requires subscription?

Micropayments give you the option of being more aggressive with your Paywall since everyone can get to your content for a price. Move your best articles behind a paywall and leave the generic stuff for the free monthly articles. How many great pieces do you have a month? As a user today, I can probably get to most of your great pieces that interest me with 3 free articles a month if I get the rest of my news somewhere else.  Don't give the crown jewels for free, you devalue them.

Harden your paywall - maybe 1 article a month? Then email newsletter/Micropayments/subscription? Hardening your paywall will lead to more subscriptions instead of giving users your best pieces for free.

Pricing can be dynamic (and automated) - high price for new, hit pieces which drops as the piece becomes stale. Higher price for rich professionals with high propensity to pay vs a broke students.

Paywalls are training users to your content - users know to go into incognito mode, clear their cookies etc. It would take 10 minutes to write a chrome plugin that removes the paywalls and someone will. Video/Music services have shown that for the right price and user experience, users would rather pay.

Use Micropayments in conjunction with social media posts of articles (Twitter/FB/LI etc) so users can immediately buy the article and read it when they click on link without having to go through regular paywall (you pushed the content to them, they did not request it, so at least let them read it).

What about cannibalizing subscriptions?

In this question there is an assumption that Subscriptions at the current price points will work long term for many of your users. The counter argument is that subscriptions will not garner more than 10% of your users and will have significant pricing pressure as the big 3 begin targeting your users and leveraging their technical and financial advantage.  If the NYT gives most of the general news one needs, your value becomes specific hit pieces that are unique - can you really charge similar price points to the Walmart of News (NYT) that gives everything for a subscription?  Micro Payments are about a new revenue stream focused on the >90% of your users who are currently being monetized by ads or not at all. Today's technologies give you granular information on who they are but you need a portfolio approach to monetization to leverage that data (data is only worth what you can sell it for).


The importance of brand for Publishers cannot be overstated. Trust is a key value for news sources to combat fake news and preserve pricing. To keep your brand strong you need:

  1. Great, unique content
  2. Hosted on your site with your experience (vs dilution on 3rd party aggregation services)
  3. A great user experience where the consumer does not feel like the “mark” constantly being upsold to but as the valued customer
  4. Control of your users and data
  5. Putting the customers needs first.  Most of your customers do not need your subscription packages (don't consume enough today) but that should not mean that they are worthless / free - they should get the right package for them at the right price

Saving Liberal Democracy and free Journalism

This might sound corny but I assume you got into the news business not for the money, you could have gone to a hedge fund... ;-)

The plague of fake news, loss of trust in institutions and data, extremism is pretty well correlated to the business challenges of publishers. I strongly believe that they go together.  Citizens need access to many different, independent, trustworthy sources of news and information. Having a Fox on the right and NYT on the left, each a silo, is not conducive to a functioning democracy. Micropayments can give users access AND improve publishers bottom line.81