While nobody was looking, a small company in Slovakia may have shed some light on one of the biggest challenges to the news business in the digital age: how to get people to pay for news online. Piano Media, launched in Bratislava last spring, gives subscribers single-login online access to content from all nine of Slovakia’s leading news publishers, for a flat fee. And Piano says it has so far exceeded its profitability expectations—without causing a drop in traffic to participating sites.
To say that Piano has solved the paywall puzzle would be a stretch. One of the biggest reason for its success may be Slovakia’s linguistic isolation from the rest of the world. With all the major newspaper publishers (and one broadcaster) involved and little Slovak-language competition from outside the nation’s borders, readers would seem to have little choice but to pay for their news if they want it. But Piano Media, which bills itself as a “national paywall system,” recently expanded to nearby Slovenia, where in addition to Slovene, people tend to speak and read a number of other languages, including English, German, and Italian. Slovenia could be the first test of the exportability of Piano’s business model.
Piano’s paywall is metered, which means that payment is requested only after a user has already read a certain number of articles for free. Users who decide to pay the monthly fee (about $3.75) are granted seamless access to walled-off content at the thirty-four websites owned by Piano’s nine participating publishers.
Forty-eight hours after its May 2011 launch, Piano sailed past its initial monthly subscriber target. At the end of its first four weeks the company says it had taken in about $52,000, and that income and subscriptions to the system have held steady at that rate ever since. Piano’s founder argues that the company’s biggest achievement may be best measured not in profits, but by how it has changed the habits of Slovak Internet users. “Let’s break the I-will-never-pay barrier first, and then we will have many more years to think about price,” says Piano’s founder and CEO, Tomas Bella.
In the first two months after Piano launched, Slovakia’s 4 million Internet users debated the new paywall furiously. But after an initial spasm, online discussion about it ceased. “Suddenly everybody knew that all of the Internet is not free anymore,” says Bella. “The mindset of people changed quite a lot.”
Bella’s admirers say that Piano’s paywall succeeded in part because of a strategy that values human insight over technology, both in Piano’s relationship to the consumers of news and the companies that produce it. The key, they say, is convenience. Early on, Bella and his team figured that more than any other factor, convenience would determine whether online readers would become paying online subscribers.
Bella put up a paywall back in 2006, when he was editor-in-chief of SME.sk, Slovakia’s biggest Internet news portal. Readers responded with vitriol and site traffic plummeted. When the paywall came down at Bella’s command, SME.sk’s popularity spiked, but the site’s profits continued to decline.
That failure left Bella confused. “People were telling us that they would have no problem in principle paying for online content, but in fact they were not paying,” he says. He finally concluded that the payment process—and not the concept of payment itself—was at fault. When he founded Piano Media five years later, Bella put this insight to work.
He set aside the micropayment model, which he says wrongly assumes that readers want only the articles that interest them, on a pay-as-you-go basis. “If you only paid for the articles in print newspapers that you actually wanted, it would make no sense. The newspaper business would make no sense,” says Bella. Readers, he figures, do not want to interrupt their online reading experience by pulling out their credit card or logging in multiple times, any more than they would want to be constantly interrupted while perusing a stack of newspapers or magazines.
So Piano chose a cable TV-style payment system, in which users pay once to get access to a range of premium content.