Paid content
June 24, 2011
Nine Slovakian media websites netted 40,000 euros ($57,000) in the first month after their content was put behind a paywall, according to Piano Media, the company that created the payment system. In April, it started charging 2.90 euros a month for unlimited access to all the sites. While the service is advancing domestically, the company said it hopes to rollout in other European countries by September.
To learn more about how the system works, Deutsche Welle spoke with Piano Media head Tomas Bella.
Deutsche Welle: What is this paywall system, and how did it get started?
Tomas Bella: Piano is a united system for payments. People don't have that big of a problem with paying for content on the Internet. What we're trying to do, is to copy a cable TV model, where you pay once for all the programs, and you know you won't be bothered with any other payment requests.
We thought the problem with payment-for-content is that it is very inconvenient. We have a system now in Slovakia where you only pay 2.90 euros per month and regardless of [which site you paid on], you get access to all the other sites' premium content in the country. You don't have to pay again on any other site, and you don't have to login again. You are automatically recognized as a paying user. This removes most of the complexity from the person at the computer. We also have a system of dividing the money among the places you actually visited.
Can you compare what Piano does not to what the situation was like before?
Currently, there are nine major media outlets in the system. Together they offer more than 40 different services. Before joining Piano only two of the companies had already been asking readers to pay for content. You had to pay, for example, for online access for each issue of the magazine Tyzden, if you didn't buy a print magazine. All broadsheet newspapers didn't put their opinion sections [online], and some [other sites] published articles earlier for their paid users, and sometimes you had to pay if you wanted to comment on some articles.
Do the websites have to pay to be part of the service?
No, they don't pay anything. They only have to implement it technically, which usually takes a few days. That's one of the reasons why they were willing to try this system out. It's quite expensive to build a payment system. The New York Times talked about how it takes $25 million or $50 million, and I laughed when I first heard this. But I’m not laughing anymore. It's really expensive.
Many of the smaller media organizations here in Central Europe that were charging for content said, "We don't expect that this will bring us any money, or that we will get the money that we spent on this system, back." They were doing it purely as a defensive move, to defend the print editions. Now, for the first time, they have a system where the cost of implementation is almost zero, and they won't have to defend their print products, which won't last in the long term.
You said the companies netted over 40,000 euros. How does that money get divided?
We divide each individual payment. If you pay 2.90 euros, we divide that based on where you paid and where you spend your time. If you paid on one site and you’re just using this one, then it gets all the money. If you paid on one, and you visit three others, your money will be split between the others based on how much time you spent on each site. [Ed: Piano takes 30 percent of their client’s revenue through its service.]
Do you have any plans to expand Piano Media?
We're talking to 10 other Slovakian sites who want to join the system. We will have the second round of expansion in September and the existing sites will put on more content. Almost every day we are getting e-mails from other countries that they want to know more. The negotiations are only at the beginning, but so far, it looks like very attractive for the publishers.
Do you think other European countries will be willing to pay the same amount as Slovakians? Will others pay more or less?
In countries in Central Europe, I think it will be on a very similar level. It has to be below the psychological level of an impulse buy. We don't want anyone to think about the price. We don't want anyone to think if they can afford the content. For Central Europe, the price will probably stay at similar levels, but for Scandinavia it may be a bit higher - but we want this to be a mass product.
What percentage of Internet users in Slovakia have signed up for your system?
We've been saying that our target, in one year, is 1 percent to 1.5 percent. So far we are doing well and we think we will reach this target. I think that in about three to four years, we want to have 5 percent to 15 percent of the population subscribed.
Interview: Cyrus Farivar
Editor: Sean Sinico