Over at TOL, we’ve been following developments rather closely of the Slovakia-born online paywall system known as Piano. This is a highly unusual story of a media-related innovation originating in our coverage region, but generating a lot of press in Western Europe and the United States (almost always, it’s the other way around). And while the system’s technology has understandably drawn much attention (similar to cable, a single fee gains access to multiple content channels), probably the company’s biggest success has been to convince fierce competitors in the same market to team up and restrict access to their sites in a way that should benefit all of them (the media outlet that takes the initial group subscription gets 40 percent; Piano gets 30 percent; and the rest is divided up according to how much time readers spent on the collected sites). I blogged about the May 2011 launch on the pages of East of Center, but since then, we’ve blogged over at NetProphet, TOL’s tech/social media blog, on Piano’s initial success in Slovakia, expansion into Slovenia, new seed funding, and further expansion into Poland, by far the biggest market and biggest test so far of the system.
OK, the amount of our coverage indicates that we’re a bit biased on the topic (TOL was a pioneer in paywalls way back in 1999, and we’re big fans of Tomas Bella, the CEO of Piano, who played a huge roll in the development of new media in Slovakia and trained for us in the not-so-distant past). But we do feel strongly that Piano is one of those few companies not simply lamenting the death of newspapers as we know them, but actually trying to figure out a way to save them. That topic is also the subject of a panel discussion that TOL is helping organize at this year’s Forum 2000 conference in Prague (and which I’ll be moderating). This year’s theme is Media & Democracy, and you can still register to attend our panel “Changing Media Business Models” and the rest of the conference, but act quickly since registration closes 11 October.
Given what I’ve written above, no one should be surprised that I’ve invited a member of Piano’s management to sit on the panel and to answer a few questions (below) in the lead-up the conference. Piano watchers know David Brauchli as the company’s chief communications offer, but they might not know that for nearly 20 years, he was a professional news photographer for some of the most prestigious media outlets in the world. Over that time, David covered many of the world’s violent conflicts and was a three-time Pulitzer Prize Finalist for his work from Sarajevo, South Africa, and Grozny.
Some of our readers might still not understand the difference between a metered system and what you do at Piano. Could you please explain?
What we do at Piano is involve a majority of publishers in a single market and we get them to group content together. By grouping their content together, most publishers recognize they don’t have enough premium-type content by themselves, but they do have enough exclusive content that it would make sense for them to charge something for it. Using our system, we can take all the premium content, group it together, and sell it for added value for the end user because one low price and one login allows the ability to access all the content on any participating site. Now a metered paywall is offering content from just one particular publication, be it a paper or a magazine, and only the articles on that site. So if you want to read articles on more than one site, if you want information from five or 10 newspapers, then you have to subscribe to five or 10 different newspapers and in the end that becomes more hassle than it’s worth and you end up cutting your news-reading diet. We think that the Piano system lets you read as you would have read before, but for a very low price.
Do you foresee some kind of mixed system with certain, maybe larger countries with diverse media adopting a metered system, and other smaller countries going for something such as Piano?
First of all I think that there is only going to be some kind of paid content going forward. It’s going to be one of three models: either a pay-to-play model like the Times of London where you don’t get anything unless you pay for it. You can have a metered pay wall if you have a paper like the New York Times, the FT, the Economist, the Wall Street Journal, where you have enough content and people value the brand enough. You might have a paywall like Piano has and that can be vertical or horizontal integration. Vertical integration is like what we have set up in Slovakia, Slovenia, and Poland where a number of publications be it four or 10 or 12 all participate and they provide their premium content, their audio, and video. In Poland, for example, we have Polish Radio they provide a high-quality, high- definition audio feed to Piano subscribers as opposed to low definition.
Or you can get a combination of those, where you can be involved in the Piano system in general and you can set up a metered system if you wish, so if you pay a basic amount, you can assess, say 10, articles and then you can top it off with a gateway. But I think down the line, five years from now, 2015, 2020, I don’t think there is going to be any free content except for Reuters, except for AP, but that’s already been monetized because the newspapers, the websites have already paid AP, Reuters, Bloomberg for that information.
Free content makes no sense. It was a historic mistake. Actually there was a guy who wrote this very famous memo in 1992 called the “Boiling Frog” memo. His name was Bob Kaiser and he was managing editor of The Washington Post in the 1990s. The memo described how the media was in the midst of this paradigm shift and he equated it to a frog in a pot of water. If you turn the heat up gradually the frog doesn’t even notice that he’s boiling to death, even though if he would normally jump into a pot of boiling water, then he’d die. The media was the frog in the boiling water. They never even noticed that the whole paradigm had shifted.
What kind of advice are you actually providing publishers?
We take an in-depth look at his website or websites and we see where people come in, where they go out, what they are looking at, how they long they are staying on the site, and then we can compare this information to what we have in our database with our active publishers and then we are able to make a recommendation to them about what we feel is going to monetize the most people, like we can say this column has a large following and gets a large spike when it comes out, that would be a good thing to monetize, and you aren’t going to be able to monetize general news that going to appear or a lot of sites, or horoscopes or the weather. But you can monetize podcasts, for example. And the other thing that we sell is convenience. We’ve found that above 40 percent of the subscribers to Piano actually subscribe before they run into any payment zone, before they get to any article is locked, they sign up, and so they never run into a paywall. It’s a convenience thing. It’s like the person with cable television who says I don’t need 10,000 channels, but when I want to watch something on one of those 10,000, then I can.
I was surprised that in some places people can’t comment on articles without a Piano subscription.
That is in Slovakia. We created an option because apparently in Slovakia there were apparently were millions of trolls and comments, and it took an incredible amount of time to moderate. So we made it free, I think it was, for three comments. And what this did was to eliminate all the trolls because if you trolled, then you got banned and had to re-sign up and no one wanted to spend four euros a month spamming.
Was there anything else surprising from the reader data so far?
One of the most surprising things was, as I said, that people signed up even before they hit the paywall. And the second most surprising thing that we found that the presentation of the articles made a big difference. One of the most popular pages on the SME site in Slovakia is a list of articles that shows what’s paid and what’s not paid. To get to that page paid, that’s a paid page, that’s one of the most popular pages because it gives you the quickest access to what you want to see.
Do you think it will really be possible for you to enter large, English-speaking markets?
Absolutely. And what we are going to do is we’re go in horizontally rather than vertically, vertically being an entire country. Horizontally would be groups of similar interest things, like fish magazines, like car magazines, so we can take a group and put all those guys together so all that information is no longer available unless you pay. We can also do it regionally. It would work really well in a state like Montana because there isn’t a lot of general information about Montana.