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Paywall Business Model

Our-Hometown, Inc Designing, building and deploying Online Business Models for the newspaper industry since 1997 Contact: Carl Leonardi cdl@our-hometown.com (315)294-5912 11/04/2010. Paywall Business Model. Myth vs. Fact A look at implementation Analysis of outcome Pricing Model Conclusions.

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Paywall Business Model

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  1. Our-Hometown, IncDesigning, building and deploying Online Business Models for the newspaper industry since 1997Contact: Carl Leonardicdl@our-hometown.com(315)294-591211/04/2010

  2. Paywall Business Model • Myth vs. Fact • A look at implementation • Analysis of outcome • Pricing Model • Conclusions

  3. Why Implement A Paywall • Create an immediate stream of new revenue. • Increase number of paid subscribers. • Return On Investment. • Protect your content, it has value. • Create new revenue generating opportunities.

  4. Case Study: The Derrick, Oil City, PA - Overview • TheDerrick.com includes News- Herald edition • Total print circulation 28,000 • Market 75 miles north of Pittsburgh • Minimal market area competition • Before paywall they cut/paste about 50% of content to their HTML website • Little effort put into web ad sales

  5. TheDerrick.com - Timeline • September 2009 – The Derrick chooses Our-Hometown Business Model, new website designed and up within 21 days. • October 2009 – Site goes live with no paywall, but readers could subscribe. • November 2009 – Our-Hometown implements paywall model, over $100,000 in paywall revenue since.

  6. Our-Hometown: The Process • The Derrick sends a pdf of the paper to Our-Hometown Daily. • Our-Hometown posts 100% of the news online in html format. • Breaking news and updates are added by Derrick staff in between issues. • Our-Hometown is responsible for hosting, maintaining, and upgrading the website.

  7. Paywall Subscription Costs 3 Months 6 Months 1 Year 1 Year online upgrade • $29.00 • $39.00 • $69.00 • $12.00

  8. TheDerrick.com order analysis

  9. TheDerrick.com order analysis

  10. TheDerrick.com order analysis Order Flow

  11. Pricing Model for online-only subscriptions at dailies The Data

  12. Study of demand for online-only subscriptions at dailies

  13. Myth: You’ll never get enough subscribers to be meaningful

  14. Myth: Print subscribers will go online-only If I charge the $7.80/month you recommend, that is less than the price of the print edition. I’ll cannibalize print and lose insert revenue and maybe more.

  15. Myth: Print subscribers will go online-only Oil City Derrick (28,000 circ daily) 1,185 online-only Only 5 cancelled the print edition Only 1 was in their delivery area $69/year - ½ the price of the print 45% of online-only subscribers live inside their delivery area

  16. Conclusions At $7.80 per month for online-only access, dailies will add about 3.5% to total subscriber base with a paywall Only minimal loss of print subscribers to online-only. Initially expect a drop in website traffic This is with HTML websites only; not PDF or Replica editions.

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