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AD based revenue VS subscription income - Times UK Lost 4 Million Readers to Its Paywall Experiment |
Tech Crunch released an article yesterday discussing the merits of the Times UK moving all their content behind a Paywall. It is an interesting read, but personally I think the comments section is a more informative take on the situation.
It does raise an old, but still valid question as to whether a business should choose advertising based revenue stream, or require users to subscribe to their services.
http://techcrunch.com/2010/11/02/times-paywall-4-million-readers/
Moving your site behind a 'Paywall' (placing all your real content behind a monetary subscription layer) is a risky move for several reasons.
Firstly some people are used to free content online, a lot of content is free, and will continue to be so. This tends to make people think twice about actually paying for content that most likely can be found elsewhere for nothing. The decision here is usually influenced by a unique selling point (USP). This is usually based in the user preferring the particular sites viewpoint, or perhaps opting for a non advert cluttered version of the site / app.
In this case it must be the Times reputation, and the strength of their brand. The Times have also opted to keep their inline adverts. This gives them a stronger position when selling AD space as they can now push for higher rates, being that they can guarantee the target audience as they are all subscribers.
With a subscriber base you have knowledge of the users accessing your site, so targeted adverts can be themed around your users. With the general public accessing your site it is harder to justify a high AD CPM as you cannot accurately correlate the AD content to the users viewing it.
The other point to note in this is the complete removal of any social networking aspects of syndicating your content online. You cannot integrate into any social platforms behind a Paywall, as all your users MUST subscribe. In the modern 'sharing' era this may negatively impact on your web presence as more and more users are becoming socially active online.
Along the same lines it also means all your content is removed from search engine indexes as they cannot access the pages to index them. When you consider that your SEO is all aimed at pushing users to subscribe, and not view your content this is not too much of an issue.
Of course what it all boils down to really is the business cost. Is it worth (monetarily and brand awareness wise) having less users, who are actually paying for a service, than many times more users who are not? Which one of those options we take will probably depend very much on exactly what you are trying to achieve.
You can read the tech Crunch article here http://techcrunch.com/2010/11/02/times-paywall-4-million-readers/, be sure to check to comments.