Next-Gen Paywalls, India Edition


I met a friend for lunch the other day who runs digital initiatives at an Indian media house.  Every time I meet him he has the same question: how to make money off Indian digital users?

No one seems to have a perfect answer to this yet.  In the United States, the switch from print to digital advertising saw a corresponding drop in ad rates, as advertisers got a lot more granular about the return they expected on an ad.  (It wasn’t just about “impressions” anymore, it was also about “clicks” – which could be measured.)  Digital content producers, in an effort to feed advertisers, started using techniques like hot-linking to pick up users.  Of course, Google eventually wised up to these tactics, changed their algorithms and put a bunch of these content farms underwater.

Back to my friend’s dilemma.  Does he go for advertising? If so, does he use banner ads? Sponsored content?   Banner ads are uniformly annoying, and sponsored content can seriously backfire, as the Atlantic discovered when a Scientology advertorial did some serious damage to the magazine’s brand.  That said, many people seem to be using some form of sponsored content these days.  (The barrier between edit and advert is a bit of a tricky one in India anyway.)

Should he use a paywall?  Most Indian newspapers draw about a third of their online traffic from diaspora readers (Indians based outside of India). Some Indian newspapers are experimenting with creating separate paywalls based on location.  Another option is to create a special app for international users, although that can cost a publisher more money.  One of the big problems with a standard paywall – like the NYT paywall – is that it doesn’t allow for much price discrimination.  The best solution is probably some form of customized paywall, or even ala carte payments, that allow people to pick up stories at will.  (Some sites do allow users to buy single articles, but perhaps batch subscriptions of x articles/month could also work?)  Or better yet, design a fun iTunes-like interface.  After all, this is essentially what iTunes did to CDs.  “Pay for the news you want.”  If the NYT did this, they could bundle certain long-form investigative economy pieces with Paul Krugman’s column, for example, so that lesser-known but great stories still get some exposure.  (Of course, it remains to be seen whether Paul would be ok with this, or if he would strike out on his own ala Andrew Sullivan.)

The reason that Indians might go for this news a la carte approach is that historically, as we’ve observed with apps, they’re more comfortable with micro-payments than with bulk payments.  They’re also familiar with making micro payments through their phones, so “pay for the news you want” might work.  There could even be an audio version of the interface for people in more rural areas.

Finally, another mutual friend of ours suggested that my friend give the entire digital newspaper to a digital advertising shop and let them chop it up and find new ways to package/sell it.  First the shop would put together some audience metrics, then they’d start designing.  A lot of interesting and engaging stories these days are being told by advertisers, not news outlets.  (Esp when you’re looking at content that goes viral)  This is an audience measurement and design problem, though.

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