Paywalls divide opinion like little else among media owners. Some newspaper groups, particularly in the United States, have embarked upon a goldrush-like charge towards them, eyeing a precious new revenue source to offset challenging times in print. Others are publicly, implacably opposed, believing that digital content should be free and that there are better ways to derive value from your audience.
At Autosport, a brand with its roots in a 63-year-old weekly motor racing magazine, we’ve never had much time for theory or ideology. The web has created fantastic opportunities to transform Autosport’s scale and reach among Formula 1 fans worldwide. Our job has been about trying to make sense of those opportunities - and make money – while keeping abreast of rapid technological change, creeping economic uncertainty and the fact that people simply don’t read mags like they used to.
So for us, it’s never been a question of taking sides or nailing colours to a mast. We operate a paywall on the Autosport.com website for one reason only: it works.
The revenues we derive from paid content are the difference between the site being profitable in its own right and being dependent on the magazine business. Without those revenues, digital development would be limited and we would probably face further difficult decisions over journalistic resourcing too. Basically, without the ability to make money direct from our digital users, our site’s future would look pretty challenging. As it is, it looks altogether more appealing.
Mixing the models
Since 2006, Autosport.com has operated on a ‘freemium’ basis. Much of the site is free to access, including news stories, race reports and basic results: content that drives a monthly audience of 2.5m unique users. Then there is our paid-content area, Autosport+, available to users who subscribe to the website or pay via micropayment.
More recently, we have started to limit non-subscribers’ access to free stuff. Using metering software developed in-house, we now restrict non-paying users to a maximum of 30 stories per month. After that, it’s a case of pay to continue reading or wait until next month.
Some experts would say that this strategy is confusing for users, anathema to the internet and ultimately doomed to failure. We don’t agree. Six months into the metering project, we have just celebrated Autosport.com’s biggest month yet for subscriber acquisition, finishing it with a subscriptions base almost 20 per cent larger than when we began metering.
So things are going well, but progress has not been smooth or linear. Autosport’s digital story has more twists than Silverstone, with legacy, luck, bad and (occasionally) good judgement all playing a part.
Historically, Autosport.com has been by turns free to access and completely gated. In 2004, we took the view that our online future would be subscription-only, and acquired a rival site with a successful paywall to bolster the proposition. Not long after that, we changed our minds and decided that salvation lay instead in the wealth of advertising opportunities that a rapidly expanding digital audience presented.
In particular, we were excited that, unlike our magazine readership, new users were arriving in big numbers from outside the UK. Once we hit upon a way of monetising those millions of global eyeballs with ads, how could we possibly fail?
It was this conviction, rather than pursuit of a paying audience, that persuaded us to take the freemium route. In making our most popular content free, we were effectively putting our faith in an ad-funded future, and tacitly relegating the paywall to the role of anachronism destined to wither on the vine.
It didn’t turn out that way. Traffic did go grow rapidly, and continues to, but before long, digital advertising rates waned; our clients proved slower to adopt digital than anticipated; and the magic bullet that capitalised on our worldwide reach remained elusive. While we did grow our ad revenue significantly, it alone was not enough to make the online business sustainable.
Yet paid content bucked the trend. Although we concentrated exclusively on developing the site’s free-to-air sections, digital subscriber volumes stayed flat throughout 2007 and 2008, before actually beginning to grow again – only incrementally, but organically.
It dawned on us that we were on to something, so we switched tack once more and began investing in the paywall. We rebranded the paid-content area as Autosport+, introduced new content (much of it repurposed from the magazine), improved visibility on the homepage, and started to actually market it. We also launched a new top-tier subscription, including a digital page-turning replica of the weekly magazine, at a premium price.
And the audience responded. Since 2009, subscriber numbers have grown by between five and 15 percent a year, and now they are accelerating at a rate that could see them outstripping print subs within the next two years. A further 15 percent have upgraded to a top-tier sub, boosted by increasing tablet penetration. Overall, paid-content revenues now account for a third of our digital turnover – and it is growing every year.
But what’s most exciting is the potential. Our progress to date has been orchestrated by a small group of (mostly) magazine people learning new digital tricks. It has taken us a long time to work out where the levers for paid content are, and there are still several left to pull.
What people pay for
So what are we doing that people are prepared to pay for? Nothing complicated, is the short answer. Online, the editorial strategy is the same as in print: to aim to be first with the definitive story and, as a consequence, be required reading for anybody interested in motorsport.
Autosport differs from most digital-only rivals in that it invests heavily in sending journalists and photographers to every major motor racing event worldwide. As a result, we enjoy relationships and credibility within the sport that others might not; and – we hope – these help us to tell that story, definitively, before anybody else can.
Ultimately, subscribers’ willingness to pay comes down to their perception of the depth and quality of that coverage, so behind the paywall that’s what we try to give them. Old-school, long-form journalism - feature articles, news analysis, technical insight and opinion pieces - comprises the majority of the content in Autosport+.
Subscribers also get high-resolution photo galleries from our agency LAT Photographic; entry to FORIX, the world’s biggest motorsport stats database; personalised email newsletters; and a customisable homepage. (It is an ad-free environment too, although that may not last forever.)
For newcomers, the main draw increasingly is unlimited access to news. During the Formula 1 season, we post up to 1,000 news stories on the site every month, and the prospect of reading only 30 is clearly unbearable for many.
What people will pay
When it comes to charging for digital content, we have found that pricing is less elastic than in print. The majority of our subscribers pay £50 for an annual subscription, with the rest on slightly dearer month-by-month packages. Top-tier annual subs including digital editions start at £120. Although we have raised our prices significantly in recent years, the impact on volume growth has been minimal.
The flipside is that some tactics we deploy successfully on magazines, such as short-term discounting and subs trials, have relatively little traction online. Users either seem prepared to pay for content or not at all; how much we ask them for is secondary.
This might explain why micropayments have yet to take off. Our solution, developed with PayPal, allows non-subscribers to buy individual items from behind the paywall at 89p a go. It is a fast, frictionless process, but not terribly successful to date.
While we have had some joy in up-selling one-off purchasers into subscriptions, monthly micropayments are still comprehensively dwarfed by subscription transactions. Whether this is because micropayments for journalism fundamentally won’t work, or whether we have priced them over-optimistically, is something that we will be testing in the near future.
Also on the menu are further trials on the threshold for free page views, and the implementation of a ‘data wall’ to give us more information about our most engaged non-subscribers. What will not change, however, is the underlying strategy, because it is difficult to conceive of an Autosport.com without metered access now.
What we have learned
If I had to summarise what our adventures in paid content have taught us, it would be as follows:
* Paid content doesn’t have to be complicated, but it does have to be good. Old-fashioned words and pics are the main reason people subscribe. But in terms of quality, relevance and timeliness, they simply have to be better than what myriad online outlets are offering for free. Otherwise, why pay?
* It’s okay to change direction. In terms of free, paid or a combination thereof, Autosport.com has tried almost everything once. But we have continued to grow our audience because despite swingeing strategic changes, we have always managed to demonstrate the value of our journalism.
* Accept that the majority of your users probably won’t pay. Only a small percentage of Autosport.com’s total audience subscribes. If site traffic continues to grow at its current rate, it is hard to imagine us ever getting that percentage into double digits. But equally, we have no desire to force everybody to pay. More important is the ability to segment users and find different ways of monetising different types. Advertising and data still have a massive role to play.
Ultimately, a paywall will not work for everybody. But for brands like Autosport – a niche player with history, a committed audience and a strong product on its side - I am convinced it is an essential part of the future. We might have been around the houses to get to it, but it feels to me like we have ended up in the right place – and from here, things are set to get really interesting.