Special Episode: Pete stops by the Powered By Coffee podcast to talk paywall monetization strategy

Welcome to the Paywall podcast where we discuss paywalls and paywall strategies for news and magazine publishers. This episode of the Paywall podcast is brought to you by Leaky Paywall. Leaky Paywall is the most flexible WordPress subscription platform. Find out more@leakypaywall.com and now for today's episode. This interview originated on the Scale podcast and is with myself, Pete Erickson and Stuart Richie and who is the co founder of Powered By Coffee. What is Powered by Coffee? Well, they're a development agency that works with publishers to help build effective websites and revenue. Together we dive deep into what is working and not working in digital publishing. Hope you enjoy.

Hi there and welcome to skill. I'm your host, Stuart Ritchie, finder and lead developer at Powered By Coffee. Powered By Coffee is a web and software development agency that focus on helping media teams solve problems with technology. Scale is a podcast on how media and content businesses are impacted by technology and sometimes how technology is impacted by media and content businesses. Today we have as our guest, Pete Erickson, the founder and CEO of Zine 101, the makers of Leaky Paywall for WordPress, one of the bigger paywall and kind of content monetization platforms out there. And we're going to talk about paywall strategy and more and more monetizing your audience. Pete, going to hand it over to you. Tell us about yourself. Tell us about Leaky Paywall, how did you get here and all that good stuff.

Thanks Stuart for the nice intro. A little bit about myself and Leaky Paywall. So. So back in 98 I started a web development agency and we were doing general web development for years and years. And then about 14 years ago, Dartmouth College hired us. They wanted their Dartmouth Engineer magazine to be published online, but not in a flipbook or PDF format. They wanted actual real HTML web based articles to be on their website so Google could index it and their students and prospective students could share these articles on the web. And so nothing existed for WordPress. We built a plugin called issuam, which we still support and still work great for magazine publishers. And that led us down the rabbit hole of working with New England Northeast universities for their alumni magazines and such. And then we were tasked to create a paywall. And that was right around the time, that was about eight years ago, right around the time when New York Times was proving to have a lot of success with their metered paywall. And we said, sure, that sounds great. There's really nothing, I mean there, there were some member plugins for WordPress but nothing really focused on publishers, so. And they were all hard paywalls at the time. So we built a metered paywall for WordPress. We called it leaky paywall because I think, think maybe in the UK that's where the word leaky paywall came from originally, I'm not sure. And started, started down the, the rabbit hole of, of subscription revenues with publishers and that took off and that became our main product. For a lot of probably obvious reasons, it became really important for publishers to generate revenue. And I'd say one of the milestones for us as well was we, we, we came out selling sort of the suite and we were doing okay. But WordPress has a repository, right? And we were, I think we were at a WordCamp Boston probably seven years ago or something like that. I can't remember what the date was. And our lead developer Jeremy Green and I were having a beer and chatting and we came up with the idea of, well, why don't we put, why don't we just, I mean sales are okay, but it's not like it's not exploding or anything. Why don't we put the leaky paywall on the repository and see if we can get some exposure there? Which we did. And that was probably one of the best decisions we made. So all of a sudden our inbox started filling up with developers and mostly developers mix of publishers saying hey, this looks pretty cool. And then we started creating the premium add ons and then today we've morphed into a whole real integrated platform with, we integrate with lots of circulation software platforms and CRMs and leaky pails essentially become the gate, the subscription gate, where it controls content access and then in a flexible way lets readers subscribe or pay for whatever content they like. And then we just, we just play nice with others like HubSpot or circulation software or somebody's proprietary database. There's all sorts of wacky installations going. So hopefully that's, that's helpful.

Awesome. Thank you so much. So I want to establish a baseline here because I think paywall and leaky paywall and mirroring and things like that are terms that I understand. But I think I had originally picked up the wrong ideas and what these were because I think there's a lot of different ways of saying the same thing. So we, from my context when I started looking at paywalls and things like that, my context for that was that paywalls were the leaky thing. They're like. And the meter piece like that was the default for a paywall rather than here is, rather than the literal meaning of like here is a wall and then once you've hit it, you pay.

Right.

So to distinguish that from this is a membership site or this is a pure subscription site, because that was very much where that lived in my little in head taxonomy. So if anyone listening out there comes from the CM context, when we say paywall, today's service setting, that's what we mean is like anything really where you are heading up against access control to try and push someone into an action that you want them to take to get more content, whether that's monetary or not. It could be an email address as an example. Some change of value.

Exactly. Um, yeah, I can expand on that a little bit.

Go for it.

So, so, yeah, so paywall, the original paywall was a hard paywall. It's like Wall Street Journal, New York Times, all the big publishers. Would you, you just hit an article and be like, you have to pay to read this article. That was the original implementation of the paywall. And then the New York Times really popularized the metered system where you could read 20 articles is what they started with per month for free before you had to pay. Then they, they ratcheted that down to 10. That was, that's too many for sure. Then they went to 10 and they went to five and now they're at one actually. And you're right about like you can pay with an email address and it's all about like the subs, the, the flow and the relationship flow between the, the casual reader where you want to build that relationship by grabbing that email address early on in the process and, and then walking that reader through to where they hopefully pay for something down the road. And so the, the relationship flow, the paywall flow today is pretty sophisticated. But I mean, it's, it makes sense.

It's.

But, but so I come in from Facebook or LinkedIn or whatever and I land on an article. Like maybe I read one article, I get to the next article and says, hey, and this is what we do with art, our publishers. And so we say, the publisher will say, hey, read this article for free. Just give us your email address and you'll get the newsletter, which is really important and maybe some other things and you'll get some more content. Okay, great. So we, the, the reader does that. Now they're on the newsletter. Now this, they have walked past a piece of friction essentially that says, you know, if you like our stuff, just drop off your email, maybe choose a password and register and log in. Okay, great. So now the newsletter is sending that reader back to the content every day, every week, over and over. And then they're getting messaging that says hey, why not pay? They get the free content, they get the newsletter that has value. But then the messaging is repeated over and over again that says upgrade for full access or whatever the messaging is. There's an intermediary step that works well too for some publishers, which is the pay per article step. You have someone who's already registered in the system, it's pretty easy for them to pay for a piece of content if there's some value there. And that works. And that might be a stepping stone to a full subscription. And then once somebody converts to become a full subscriber, the options actually open up from there. Right. So now you have somebody who's paying, but what else can you do? Right. And now there's lots of other things you could do like pay more for, for either extra content or ad free plans or different products. Of course you get into. And I don't, we don't have to go down the rabbit hole into events and bulk subscriptions. There's just lots of stuff you can do. That subscription funnel is really from what I see and what works super important because it's, it's and, and it's a mistake that I see a lot of, we deal more in the sort of the mid market publisher world.

Yeah.

And it's a mistake that a lot of publishers make because they're not digital marketers. Right. They, they don't, they don't see that there's a relationship funnel that needs to happen. They just want to take people from cold A to paid B. But there's a, there's, there's a relationship in between. So.

Absolutely. I want to latch onto a word there, you said funnel. I want to say it's an old marketing term but certainly maybe feels a little lighter vogue at the moment. But it very much feels like just another step in that funnel that like process of like okay, here are all these people we don't know. Here are the people we have like an email address of that have kind of paid a little bit in value. Then here are our paid subscribers. And then from those paid subscribers that's not the end of that journey. There are so many other things you can, you can move them onto whether that's like slightly higher tier ad free, unique email content for jest, a small subset of subscribers, data products, et cetera, et cetera. There are the nicher you are, the more and richer a variety of Things you can do do within that space. Yes, but what's in within all that. What's interesting to me is I feel like pre digital publishers were really good at this. You would have like your print, say you were running a newspaper. You would have your morning edition that people maybe pick up on their day and then they'd have their weekend edition that'd be more expensive. Then there would be supplements that were able to purchase from people that were most interested and then there would be like community events and things like that within the supporters group and they would find ways to obtain the value that their readers were willing to pay for that content based on how engaged with that brand they were. I see, at least in my life, I see it a lot in video games. Like you get game releases and it's like 60, $70. There's also a hundred dollar version of that game. Oh yeah, has a few bonuses thrown in and then there's a 250 pound version of it that comes with some like cheaply made marketing material pack ins to extract the value from that fan who is willing to pay that amount. And they give themselves lots of little price points, lots of little value iterations to get them to. And so what, what do we think happened that publishers used to be so good at this? Kind of like here's our product line to then. Now we're online and we're like well not these things may should be easier actually to. Why has that become so hard?

So just let me just add one thing before I add that. So yeah, sorry, go on. They, they had, they were so good at it. They even had, they even had a, a giant, a couple of giant shared databases of mailing addresses in the US so they covered like over 90% of US households in terms of mailing addresses and there was this big database that was shared and there's no way you can pull that off with email. But for mailing addresses they had this and they could target so specifically and it just worked. And even the psychology of like Lyft, Lyft cards, right, you open up a magazine and the subscription card drops to the floor and it forces you to pick it up, which gives you time with the card. They really, they really had it. So as far as changing over, that's a super interesting question I think and I might have some random answers for this one. But one of the things that has changed is that the data flow is, the pipe with the Internet has opened up, right? And there's so much data and there's so much shared data and the requirement to gain attention like you mentioned before, requires really niching down on your subject matter matter. That's probably the primary mistake that I see happening with the bigger news publishers that are trying to monetize with sort of that shared, shared article content. You can get these articles anywhere, okay. And they're looking for, they're looking for volume to sort of put their old ad model in. But nobody wants ads today because we're too much in a hurry. We need, we, There are too many choices today. We, we just can't be interrupted and stop the way we used to used to be. And the print product is a laid back experience, a lean back experience. The digital product is a, I'm in a. I need to like scan and get through things quickly. So those two collided really badly with I think print publisher especially like the flip editions that that flip. Nobody reads that. The only reason that you know and I sorry to say this, but the only reason they exist is because advertisers want to see their ads in there, but nobody actually reads them. And so we work with plenty of magazine publishers to try to help them do both and not, not go down the wrong rabbit hole. But those are, those are some things that really collided the wrong way. And the biggest one being the niche. You really have to be in the, in the right niche and you have to get smaller and smaller because the world is a big place, the Internet's a big place. If you're going to connect with your audience, which is all, which is what publishers do. It's building trust, building a relationship that means getting, squeezing down and really, really figuring out what, what that, that niche is that you can be number one in right? And that, and that's where when you're number one in a niche, you get the attention, you get to charge what you need to charge. It's all, all good things happen, right? So yeah, that's a super question. I really, I don't think I've actually poured a lot of time into that question before in a short period of time.

It's one of those ones you're like. Because it never occurred to me until like literally as we're talking about it, I'm like that, like why did this change? Like, yeah, I just, I think there's like, There's a good PhD thesis in that somewhere.

Yes. For someone to awesome to write about. That would be awesome to write about. And I look at it like, like local news. Like there's a lot of pressure on local news. I mean I know the, the hedge Funds came in and started buying up local news and, and stripping them down and hurting, hurting that. But the truth is that, and there are a lot of local news deserts, but there's the opportunity. And I see success stories left and right with local news, different approaches. But the reality is, is like we as community, small communities, we especially we are desperate for local community news and we are absolutely willing to pay for that. News just needs to be approached sort of in that, in that fashion. So that, and then you become, become number one in your community. Right. But yeah, the, that, that, that's just a, that's just a great question. We do, and I do have experienced the, the, the publishers that come with print and they're looking to start digital subscriptions. Believe it or not, this is still happening today where, where publishers will come, especially the sort of, the bigger, the magazine publishers, they'll come and they'll say, hey, we really want to start up. And I don't know what your experience is with digital subscriptions. And we'll go through sort of a quick overview of what their situation is and try to figure out what their, their best step is. But they're still, you know, a lot of them are still not publishing their best content from their magazines on the web. So it can be shareable and searchable through Google. They're still not doing it, which I've had been told a million times. I can't believe it. That you're lying. That doesn't make any sense. Why would they not do that? Of course they need to do that. They need to figure out how.

But yeah, I've seen that 100 times, or maybe not 100. I've seen it plenty of times of like, oh, no, we want to keep something for, for the, the print edition because those people are subscribers. And I'm like, yeah, but your online people are subscribers too. And if this is your best content, that's what's going to get people in the door and engaging with the brand and that's what's going to be shared. And if you hit it right, that's what will like rank in search and will come up in some of the syndication platforms to like get in front of new ui. But there is this resistance as I think there's like, there's a weird mental divide. Before I work for a magazine and I work for a publisher and like, there's almost this different way of thinking of like, this is the piece I wrote and it's meticulous and been pored over and it's in a Premium like format by being on paper more than pixels on a screen where there's no or very little control over, over in the end. But anyway, so paywalls for publishers. So I mean this then is the opposite side of how you monetize. So generally most publishers, particularly at a very large scale, will not monetize their content, they'll monetize their audience. So they've got eyeballs and they're showing ads.

That's right.

And this is the flip of that where they are moving away from being dependent on Google or whoever their ad platform is to have direct relationships and get paid for the value that they provide.

That's right.

That's a big change for a lot of people where they've been a very ad focused or circulation focused with a print product. How does someone start down this road? What are the first steps of looking at? And even before that, who, who is a paywall like an online digital membership subscription? Who is that a good fit for? What kinds of publications and brands?

Great questions. Few wrapped up in that one. Let me just start by sort of reinforcing that. When I was down, I was down at the niche, niche media conference in New Orleans recently and when I did a presentation to a room of magazine publishers and I, and I ask them to raise their hands, do you have digital subscriptions or are you planning on digital subscriptions in the near future? And I, I had crickets, I'm telling you, I had 10%, maybe 15% of the room raised their hands and said yeah, digital subscriptions. The rest are like not interested. They're interested, like you said, they're interested in building their audience to serve their, but, and to serve their advertisers. That's an old model. It's, it's not a, it's not, it's not a. No, no, yes, you do, you do need to build your audience to serve your advertisers. Absolutely. But the secret now, which we've done, is to do both. And you build your audience. And the paywall can do this. If you have your subscription, your reader revenue set up right, you absolutely can serve both your reader and your audience. Advertising is changing though. That's like, it's not my, it's not my specialty, but I, but you know, the, the, the, the, the lean away from sort of the network ads to sponsorships is a really strong and really, really good one taking and, and you're just kind of shifting how the ad dollars get spent. But as far as like building your audience, I mean no matter what you do you have to always build your audience? So my, my, my saying is your paywall should be building your audience and your paid subscriptions. It's both. It's not a, it's not a one. It's both. You have to be building your audience. And it should. And it, if it's set up properly, it's exploding your audience. Right. And that loops back to. So if I were a magazine publisher and most magazine publishers are niche and have a focus for a specific audience, it could be regional, could be like sports or crafts or hobbies or something like that. Could be a million different music, million different things. And those, those niches, people are willing to pay, no doubt. They're absolutely willing to pay. But again, back to that funnel we talked about. So how do you build your audience? Well, it's the free registration right now, today, the free registration where you grab the email address is how you build the audience and you and publishers, all the tools they have, all the content to give to get that person to say, yes, here's my email. I'll even create an account and be logged in on your website. Because you have archives of content, you have newsletters, you have events, you have all these things going on. Just at the very lowest level, say you get X amount of more content per month for registering, but you get the newsletter. Hey, maybe you'll get a how to document, maybe you'll get something else. There's. You can be as generous as you want to be as you want to be, but you don't need to be that generous. You have great content. So just unlock the content a little bit. And what we see is when we install free registrations and we turn them on, they explode. All of a sudden the audience is like, yeah, I want more. Just, I want, give me more content. It's free. Great, I'm in. Here's, here's my stuff. And some publishers say, well, we're all tired of giving away our email addresses and email doesn't really work anymore. And it couldn't be further from the truth, because if you're really that good at your content, you should be, you should be confident. You've gotten this far with a print publication in a very difficult climate. People love your content. Of course they're gonna. Somebody who's casual and doesn't really know you that well will give, give up their email address because you have awesome content. You've been around, you've been this publication. You have the best of all worlds. But corporate America is looking at publishing now saying, wow, look at all the traffic that publishers get. How do we get that traffic? Oh, we got to create content, right?

Yeah. So that everyone's a media brand now.

Yeah, everyone's a media brand. Twenty years ago, when I got into this, I was trying to convince the corporations that I was dealing with to do this to, look, you need to produce content because you put one piece of content up. Give you a simple example. This is like maybe the dumbest example, but there was a roofer wrote in, said, I, I need a website review. We were doing. We were doing website marketing reviews, and a roofer in Baltimore, Maryland, said, hey, I need you to review my website. And so I went through and, and, and reviewed it, and he ended up doing YouTube videos of, like, before and after repairs. He was posting content on his blog and, and on, on this YouTube. He just, he just flat out sold out. No one was doing it.

He just. He could.

You. You search for Baltimore roofers. Boom. That was. It was him. Right? So produce. And it's a simple, silly example, but corporate America was really resistant to that. And they still are to a large extent. But publishers have the content. They have the Google traffic. Like, and yes, we get that question. How do I turn all this traffic into paid subscribers? Okay, well, back to the funnel, right? Pre registration, get them, get them in, get them on your newsletter. That is the key. And then now it's farming. Now your, your newsletter's sending them back. You have good messaging on your website to target them at the right time saying, hey, upgrade and get, get full access, get benefits, get all this stuff, and off you go.

And that's how you. That has to be a real block to the user, not just, oh, this email signup is over here, and we would like you to fill it in, please. But an actual, like, no, we need you to register to.

That's right.

Like, it's otherwise.

Yeah. Yes. Yeah. So, yeah, so the, the intern step, I think you're alluding to the like, mailchimp newsletter, subscribe form that you drop in or God forbid, you pop up on the first page of a visit on your website, which is, please stop that. Yeah, you, you. It's again, it's the relationship. I land on your website. I don't want to be annoyed by ads because 40% of the world is ad blockers or something like that. That's a clear signal. I want to read your content. Let me read your content. Okay, maybe an Article 2. Now you can register and get more. That works pretty well. Maybe an article three. That's pretty generous. I get two free articles, then I have to register and get more content. But yes, write like you get an excerpt of the content. You get messaging, right. In the article it says you have to register and it's. That works on mobile. It just works. Yep. Awesome.

Great. And then from there that person is in your, your email list and you can. So they can continue to view content up to the next level or some other piece of content that they need to be registered or a member for, presumably.

Right, yeah. And that's sort of back to the paper article thing.

Yeah.

Which has actually gotten a little bit interesting recently. It's been tried a long time ago, 10 years ago. There are publishers trying. It didn't really work, but it's actually turning into a stepping stone between the free registration and a full paid subscription. So. And it doesn't work for, it doesn't work for all publishers. Like a local news publisher with their local content. That doesn't really work because the value isn't that high. Local article, it's like, yeah, we're going to pay $2. I got to whip out my credit card for a $2 purchase or a $1 purchase or whatever that we don't have the tools in place to pull that off. But if you have a piece of content that does have value, maybe it's worth $10, $20 talking US dollars here. Yeah, that might very, very well work because I would be willing to pull out a credit card for a $20 purchase. Right. Because that's, that's worth it to me. Now. What, what do you purchase? Right, that's the next question. Well, so for if you're a B2B publisher, you might have some long form articles that have a lot of value. You're dealing with businesses that have bigger budgets. For them to spend $20, $50, $100 on a piece of content might be like, yeah, sure, here you go. That might be pretty easy. We have a guitar teacher, a YouTuber. It's one of our sort of interesting niche publishers, small publishers, independent guy and he does very well on YouTube, lots of traffic. And then he sends everybody to his website and when the subscription, we call it the nag because you're, you read an article or whatever and then you get the in content message. That's nagging. And so the in content nag is, is a choice. You can buy the. And he's selling guitar lessons called tabs. You can buy the tab for I don't know, five bucks or something like that. Or you could subscribe for whatever per Month per year and you get a choice. And what's happening is there are. He's getting both. He's getting subscriptions and he's getting people that will buy not just one tab, but several tabs. They're not ready to subscribe. Like they don't want another subscription commitment. Maybe, maybe they're just not ready. But, but they'll. They're buying two, three, four multiple single purchases. So in that, in that case, that's B2C, he's selling lesson lessons for guitarists that they, they have value at $5. People are pulling out their credit card. It's pretty amazing.

Yeah, yeah. I can speak to that market as a person who plays guitar occasionally. There's a lot of badly made tabs online for particular songs. So you can save yourself some time by finding one from someone you know is likely to be very good. Then five bucks is not, not a lot. I imagine too that there's likely a video version of it as well that is a how to play. Or if not then that would be an excellent upsell at account from that. The other place I've seen this work really well is exploiting parents who are concerned about their children's education where you will have a publisher that produces guides about schools in an area or reports on particular schools, even if they're not doing their reports themselves. Like collating data from various sources to be like, if you want to find out our take on this school or the best schools in this area, like obviously a ton of content in those. But nobody is subscribing to that.

Right.

They need like only a very small subset of that information subscription available because some business somewhere will use that data. But to the individual parent, it's like I only really care about two or three of these.

Right.

But beyond that, I've seen it work in B2B. Like research papers from data providers and things like that. To be like, it works really well. And again, it's just a step on that, that journey to more revenue from your, from your interview.

Yeah, yeah, no, it's. Yeah, I think that's, that's coming. I mean, people talk about subscription burnout. I can't. I mean, yeah, sure, like, yeah, we have, we all have Netflix and Hulu and whatever. And so you're not watching all the channels and you gotta, you gotta, you gotta bail out. But subscriptions are here for the long term. They just make a lot of sense. And if you're, if you're a niche content publisher and you are a, a, a strong player in your Niche. Yeah. People are going to want subscriptions especially for, for hobbies and or news that's critical to your business or whatever your. Or finance. That's another big one. Financial publishers. You. As long as you do a good job. Yeah. People will pay. No, no, no question over and over again. So I don't, I'm not, I'm not buying into the, you know. Yeah, there's a lot of subscriptions to manage and people are managing those subscriptions. The reasons there are a lot of subscriptions is because it works, right?

Yeah, absolutely. I mean particularly like you see it in software. A few years back we, everything was just a one off purchase and people assumed that they were going to get support for that forever. Well no, this thing costs a lot of money to maintain and bring forward and everything is moved to subscriptions in order to make those things sustainable in the long term.

That's right.

And generally people are furious. I'm okay with it. I'm like right, it's fine.

But yeah, I mean I think I.

Do see more and more resistance to subscriptions. But what I think is maybe one of the interesting things is I will judge a company on how straightforward they make that unsubscribe process.

You know. Well, you've heard about the regulation that's they're trying to the, the having the cancel link be, be visible. It's. I think it's a, oh boy. I don't know. I don't think it's a state. I don't know. I think they're thinking about a federal law where you, you have to be able to do a one click cancel. Kind of like the can Spam act. Right. With, with email. We I, yeah. Having to get in touch with somebody to cancel a subscription is infuriating. Without a doubt you should be able to cancel and the good cancellation like so I'm, I subscribe to Audible and I might. My sometimes I, I have more credits than I know what to do with. So it's like, which is good. It's like okay, I'll go find a book or two. I just, I just downloaded a book so that's great. But I still have a couple extra credits but I can pause my subscription or I can switch to every other. So when in the cancellation process the right way to handle that and it actually works is to save the subscriber. Right. Like yeah, here's the cancel link. Boom. Next. Next screen. Okay, you know why you're canceling. That's a good start. Or hey, we have another plan for you. And then just offer the other plan and you you a percentage of those you will save. Instead of having somebody call you, be super angry or email you and be like why do I have to create this email? And now I have a bad taste in my mouth with this publication that is going the wrong way.

Absolutely. Because most I imagine a lot of cancellations are just temporary of like I don't need this right now. But if you make it hard for me to stop, I'm not coming back. But if you make it easy, I will eventually come back and turn my subscription back on in my own, my own time. Yeah, it feels very short sighted to make these difficult because I just will cancel a credit card to get out of a subscription if I have to.

Right.

And I'm not alone there. Guaranteed.

Yeah. Well I mean people have like I, I do I have subscription only credit card. Right. I mean I have for first. And then you can get, you can get virtual credit cards for the people some people use for, for subscriptions. Like a single subscription and then just. Yeah, there goes.

Yeah. The bank offers per merchant credit card numbers effectively. Taiwan.

Right. That's awesome.

I have to go in and create them. But it's definitely doable.

Yeah, yeah, yeah. Well everything will get easier. So I think publishers will have to react appropriately because it's not sustainable for them if they're just people cancel and there's no, there's no chance of recovering that, that person.

But coming back to I guess some of our questions. So the groups that this seems to work or is going to work really well for are niche publishers who have a very strong audience who is either part of their work or a hobby or some other part of how they derive value from their life. And a few dollars for a subscription is not going to be the end of the world for that person. Does that sound about right? For who. Who is where in this funnel. And step one is registrations. Collect the email addresses, get them into the email list but make it a real, a real block to.

Yeah.

Force them through the process.

That's right. They have to get around it. They, they can't get around it. They have to register. Yeah. Yeah.

So then next step within this whole flow is. I imagine there is some variation here. Some publishers may want to like segment these audiences into one approach for one group, one approach for the other. But generally getting them into a paid plan, the very lowest cost paid plan that perhaps they, they offer.

Yep. Go ahead.

Sorry just. I only see the very lowest. That's kind of like a. This is the lowest barrier to entry to get you over the line and used to spend the money. Once you're already spending, it's easier to move you up a level. Obviously have the options for more expensive subscriptions available, but for that. So what's the next step on from that? For a new publisher who is new to paywalls, what are the next steps for them to increase that, that revenue from their new subscriber? Makes sense?

Kind of depends. Yeah, it's. So the funny thing about this business is that every publisher, even though publishers produce content and that's the common thread between all of them, the content is different and audiences are different. And of course publishers have different approaches to their, to their content. So. So the variations on additional revenue are diverse. Some publishers have databases they want people to pick or we. There's a Swedish news organization that's killing it with hiding ads. Just a simple simple increase in, not a big increase in payment. Well, here's the data point actually is you have two plan. They have two plans monthly regular, which includes ads. Monthly ad free, 10 per. A little over 10% of their readers are choosing the ad free plan and they're paying 40% more. Right. So for, for a local news publisher that's, that's used to advertising and that's, that's a really great next step fan for. And on the news side, like family plans or group subscriptions, that's a big one. Sure. Right. So if you're maybe you're B2B, you have bulk access that you can sell those offline for an annual and everybody gets access at the, at the organization or the group which we work with like, or like for a local news family plan. Right. So instead of I'm going to say, I'm going to say $15 a month which is kind of on the high end of local news. But, but local news publishers are getting it and if you're doing a good job, you'll get that. So I kind of want to just stick with that number. What about $19 a month for five seats? It's super easy to do at least in WordPress with us. But you know, that's like these additional revenue points certainly having like a membership approach where you. There's, there's a lot of discussion, I don't know in the last couple years about should I do memberships, should I do subscriptions or should I have a donation model for local news. Right. And the answer is do all three. Absolutely do all three. So if you're mission based and you can take donations Your subscriptions is like, we need to eat, we need to pay our writers. Right. Membership is a higher level. We love that you love us. We'll give you some extra stuff, whether it's swag or access to authors or whatever it is, there's just a stronger bond between the publisher and the members. And then. And ask for donations because you're paying subscribers and members. So a percentage of those will give you more money because they can and they want to support you. You just need to ask them. So do all three. One thing I, I think is coming is because especially print publishers will, will appreciate this. You come from the world of direct marketing back in the day. And I, I studied marketing in college. Like, that was, it was all print, it was all direct marketing, and that was the focus. And so what's direct marketing on the Internet? Like, what is your tool? Like, the website is, is, is not direct marketing. It's. You're relying on Google and social traffic, but where you reach out and you push something out to a reader. What is that? Well, email. Email is the number one direct marketing tool. What's number two? Right. And I'll argue that SMS is number two. Right? Sure. So whether, whether you have an app installed or you're using a dedicated SMS platform, that is sort of the next level of communication. And this is what readers want. If you're really like, especially sports, right? Like if you're into, I don't follow a lot of sports, but if you're really into sports, you just, you just like, you just want a wave, an ocean of information about your favorite sports team to come at you. You just want it. And we saw this with a sports publisher for one of the three of the major league sports teams in the US and he was sending out 12 or 13 push notifications a day, which my reaction was like, whoa, that's a lot of push notifications. And he's like, no, no, no, this is what people want. I'm like, I'm not a sports nut. So. Okay. And it worked. This is exactly what their audience wanted. And it sounds crazy. So there are services, SMS services like subtext or whatnot. And you can easily connect an SMS service to your paywall. And so like, if someone upgrades and pays the, the, the member level or whatever the next level is, they can get, you can, you can be creative with this, right? You can get, you can get extra messaging, earlier delivery. We talk a little bit about that. Talk about or, or having the audience ask questions back and in a filtered way where you can, you can Connect the, the members with the authors. Anyway, so that's, that's an, that's. I think that's coming. I really do. I think it's smart. I think we all live on our phones if the messaging is done right. I mean I get the New York Times alerts. I think New York Times does a pretty good job with the, with their messaging. They're not, they're not blasting you all the time, but they're. It's a few times a day and it's what they think is important and it's good. It works. Yeah.

Yeah. And crucially, that's up to the recipient to decide what they want. And if it is sports aficionado who wants every tidbit on their team or their league or whatever, it's up to them to. And that's, that's a product that is serviceable for someone. And grip. You've just found another, another revenue stream. I wonder then if there's something there as well with the newer iOS versions that have these live activities kind of built into the home screen. If, if this takes us back to the publishers publisher applications which have kind of never been great to suddenly actually having a place where they can look and have this integration on those homepages. Just a thought more than anything, I don't know.

I'm not that familiar with that tech. I haven't been paying attention to that recently. But as far as apps go, I mean I do have a fair amount of experience with the app side of things. And for the publishers that have the willpower, the size of audience and the willpower to manage because there's always a little bit of management with apps because you have to deal not with the technology so much, but with the content. Right. Like you have to, you have to figure out what, what you're really pushing out with your apps. And so that takes that, that adds a layer of complexity. For the smaller we do, we deal with smaller publishers that have apps and they love them once they're set up and they're. And they're automated and it's just, they're just pushing their content through the apps. They're getting, they're getting a certain percentage of subscribers in the apps. Not big, but it's enough of a percentage to make it worthwhile. But for like, for the mid, I'd say for the mid market publisher, I probably look at SMS messaging as a first step and look at Engage because that really can engage the audience. Tell me more about the. What Apple's trying to do.

The home screen yeah, so previous iteration of this, they moved to having phones with always on home screens. So they just dulled them out. And one of the features that I'm never sure if it was part of that or kind of came later or was like on the roadmap and is now on its way to being fully integrated to that was something called live activities. And they were very much pitched around, glanceable information that you want about something that is kind of going on. So the, the, the examples are always like great, there's a sports situation happening and you kind of have this little widget on your screen that is like here's the score or you've ordered something from Uber Eats slash delivery and it'll have a little widget that's here's your order progress. It would be feasible, understandable to me that if you were so inclined and you had a very high volume news sort of situation for a particular niche that you could do a live activities cleansable kind of like so you never even have to like open the phone. It's just kind of there as part of this thing. You look down and go like, oh, that's interested as a way. But then that would, that, that requires having the apps installed for the publishers. So it's obviously like an extra step. It's not easy to opt into. Whereas SMS is. You can hook up your RSS feed to a service and have it send. So then everything that kind of gets hit to that. It's more, more complex but it's, there's maybe value there for, for someone that's interesting.

I mean it's like how often do you want to be interrupted during the day? Or if, or like you want to look at your, you want to look at your phone. I mean this is sort of behavioral data that I, I can't, I'm not sure I can even lean in on. But you look at your phone and there's some activity you're tracking. I guess that sounds, it sounds like a convenience. Like okay, if, if, if I have the ability to track my Uber Eats because I'm really into tracking Uber Eats, then that, and I can do it without like opening my phone now. I've saved a sec, couple seconds of time. I'm all for that. I think that, you know, this is, this is our Internet race, which is a curse and a blessing, right? Everything happens faster, information's faster, that's the blessing. The curse is everything's happening faster. So it's stressful and you have to keep up with it. And so it's A race. Now whether you like it or not, to shave seconds off of every interaction that you do. We need fast loading websites. Like that's something we didn't even talk about. But that's, that's a requirement for a, for a publication. People leave so with, with, with some, a widget on your phone where you're tracking the, that event without having to do anything because this is your priority or just Uber in general? Yeah, I, I, I think that's probably going to be helpful down the road. We just have to figure out how to do it. And yeah, we have half the world that doesn't know how to do this stuff. Half the world that's technically savvy, that'll figure it out. I guess everyone's ultimately becoming technically savior. But yeah, shaving time off of the, off of any interaction is a win for sure. Yeah, agree with that.

Interesting. So just keeping an eye on the time because we've been put on the go for a while so we just, yeah. One, one kind of last thing before we, we close off for organizations with a paywall of some description. What and I imagine this will be different for every publication but broad strokes, what is good to have before the paywall and what is good to have locked up? So obviously we kind of talked a little bit about that leaky side but I know there are different ways of approaching this. Of should all new content be open and then it gets put behind the paywall on Archive? Should it be the opposite way around where brand new content is the most premium? Say it's like actionable market intelligence and then it opens up to the free model afterwards. Should there be some categories on a site that are open and some potentially that are behind paywall? Again, I think there's probably as many different ways of looking at that as there are.

Yeah, publishers, super question. Yeah, like you said, it depends on the, on the content and the publisher. I'd say generally speaking, early on, if there's a startup or you're kind of early in your content publishing career, you probably need to meter everything. And the benefit of the meter is that the visitor gets to choose what's important to them. So they come in, they look at your content and they're constantly surprising publishers by choosing the content they didn't think was that important to land on for whatever reason. They're just a million reasons. Every visitor's got a different reason. So I'd say in general that's probably the best operating plan is you meter everything. And we have, we have magazine publishers that'll like they'll meter the magazine articles now and they'll publish news that's always free. But, and that's a fair approach. But you want to get that, you want to get that registration on the free side as well. It's like, and you can set up a free registration that gives you unlimited access to all the news content and then meter the, your premium content and that requires payment. But there are publishers that are, know, have a lot of experience, have a lot of deep, valuable content. Like yeah, like insights content where you're, you're, you're, you're like you have enough of an audience already. You're publishing content that's absolutely deeply worthwhile and requires a subscription you could do by category or whatever. And so you have like your free content, which I recommend include a registration for and then you have your paid content which is always paid and always blocked. Now if you have enough traffic and you have a big enough audience and your content is like deep and valuable, big insights on something. Big insight on a financial transaction. Yes, that works. It Absolutely. It Absolutely. And people get it because it's, it's obvious that that content is worth money. It's a, it's a big piece. But if you're in that, I think if you're in that situation where you're like, well, we're not really sure you like that. We think this content is, is premium but you know, and this content's not so premium but you're, you really don't have the hard data to support that. Then let the visitor, inbound visitor decide what they're going to view and get access to. And you're. Because if you don't, the downside is if you don't take a premium piece of content and meter it and let Google add it and let social sharing add it, it's not going to, it's not going to give you the traffic that you may well be desired because your best content will be shared. So I would recommend just as a side note, make sure you're. Because browser switching is, I mean we can get it go down the rabbit hole of this, but browser switching going incognito to get around a paywall. My recommendation there is have just have an IP blocker so people can't get around the paywall because just by going to a different browser where your paywall is actually tracking the IP address, it hardens the metered paywall. But anyway. Yeah. Does that, does that answer your question? Is that. That does.

That's a good answer. I think it's worthwhile and worth looking at as well. For anyone out there looking to track IPs, I think it's worth knowing that you should not store people's IPs, at least not in Europe. Maybe store an encrypted hash of them that you can decrypt easily, just to mark that off before anyone gets any ideas. That is personally identifiable information, but it is certainly an option with the with paywalls in particular metering pills. We kind of have always approached it on a you're building the wall. Literally, how high is that wall? There will always be someone who will find a way to jump over that wall. And building it higher takes exponentially more resource. So what is the level where you need that wall to sit? And those can be very different things. But anyway, Pete, thank you so much for your your time and your insight today. I really, really appreciate it. Where can people find out more about you and leaky paywall?

Yeah, well, thank thanks for having me, Stuart. Yeah, LeakyPaywall.com that would be the place to go. And if you send an email from there and you want to get in touch, I'll find it. I'm on LinkedIn. I'm just/Erickson E R I C S O N I tend to hang out on LinkedIn a bit. Not much elsewhere.

Cool. So leakybayworld.com, linkedIn.com forward slash Ericsson. We'll put those in show notes. Thank you for listening. If you've enjoyed the episode, please leave us a review. Wherever you have got your episode, hit us up on Twitter and LinkedIn Mastodon as well. We'll put all the links in the show notes and we will speak to you in two weeks. Thank you very much.