the news frontier

A National Paywall That Works

Lessons from Slovakia
February 14, 2012

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.

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Bella put up a paywall back in 2006, when he was editor-in-chief of, Slovakia’s biggest Internet news portal. Readers responded with vitriol and site traffic plummeted. When the paywall came down at Bella’s command,’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.

Data from six months of Piano’s experiment has revealed that readers who decide to pay are not motivated by concern for access to specific content. Rather, they decide to pay because they want to be the kind of person who values intellectual work and pays for it, and because they like paying just once for access. “Some readers,” says Bella, “are even paying for the articles that are from the news agencies, which makes no sense because they can easily get them anywhere else. But the thing is, when it’s an easy payment, when it’s very convenient, and when it’s not a lot of money, it’s easier just to pay than to go looking elsewhere.” The fear that users will always flee a paywall and congregate wherever content is still free has not materialized in post-Piano Slovakia.

Piano’s subscribers are not even usually aware of what content is behind a paywall and what they can get for free on any given website. And they don’t decide to subscribe in a moment of frustration after being denied access. Most often, they make a reasoned decision to pay after a period of offline reflection. Says Bella, “they ask ‘Am I the kind of person that can appreciate intellectual work?’ That’s the level they make a decision on.”

Piano’s implementation may be novel, but what they are selling—curation and ease of access—is as old as the printed newspaper. A good chunk of Piano’s subscribers even signed up before the metered request function asked them to, Bella says. “We are basically selling peace of mind.”

Six months of detailed data from users has yielded some surprises for Piano and its clients. “What people are willing to pay for is very different from what publishers think is valuable,” says Bella. One of Piano’s clients discovered that their readers valued a bare bones, chronologically arranged list of articles. Another client found that readers cared a lot about the news summary. Editors in both cases had long put little value on those services, but have since made them more prominent on their sites.

Piano was surprised that some readers shied away from purchasing subscriptions because they were afraid of supporting publications in Piano’s network whose politics they disagreed with. Bella says those concerns dissipated after Piano explained how it splits up its profits: A third of each fee goes straight to Piano, a third goes to the site where a subscriber signs up, and the remaining third is divided up according to where a reader spends their time (with time spent in comment forums excluded). If a subscriber does not want to support a particular news organization, all they have to do is never visit its sites.

One benefit apparently enjoyed by both readers and publishers was not part of Piano’s initial vision—regulated comments. By limiting the number of free online comments subscribers can make, and by excluding non-subscribers from commenting at all, publishers believe that the level of Slovakia’s Internet discourse has been raised up a few notches. One news editor, happy to be free of the burden of comment moderation, said simply “All the idiots have left the forums!”

Piano’s success has depended on both understanding and changing the mindset of readers. But before they could tackle reader psychology, Bella and his team had what was arguably a tougher challenge: understanding and changing the mindset of news publishers.

Demoralized by decades of falling profits and the assumption that there was no way out of giving their product away for free, Slovak news publishers did not take easily to Bella’s plan. “Basically, the publishers said ‘Why the hell do you think this idea can work here? Why should Slovakia be the first country in the world where this works? Why haven’t the Americans thought of this before you?’”

But Bella persisted, realizing that he had an advantage over those putting up paywalls in other, bigger countries: a set of personal relationships with the entire news media establishment.

Slovakia’s population is less than six million. Bella had worked in journalism both as a reporter and an editor, and his time running’s website had made him known to just about everybody in the business. He had enough clout to get all the major players on board, though it took him a year of meetings to do so.

To persuade commitment-phobic publishers, Bella made participation in Piano month-to-month rather than contractual. And by raising the capital to build the technology from outside the newspaper industry, he made it an almost no-cost investment.

Even then, the news companies were skeptical. Two months after Piano’s launch, Bella says he got calls in which publishers told him “Now we can tell you that we never even believed that this would work. We never believed we would get any money, but there was very little risk. We knew that the people behind it had done some successful things in the past, so we tried it.”

Another factor: Slovakia’s biggest news publishers are much smaller than key players in other countries. They did not have billion dollar annual revenues to protect. This meant less institutional inertia keeping them from putting their trust in a small, untried company. It also meant that they did not have the time and spare cash necessary to create paywalls of their own.

Though Piano is staffed by publishing industry insiders, two of the three companies that own it are technology companies, which allowed Piano to develop its paywall technology at low cost and essentially in-house. Piano was created and launched for less than $1.2 million.

Still, perhaps the biggest reason for Bella’s success is Slovakia’s linguistic isolation. Slovak Internet users don’t have the universe of online information sources available to native speakers of world languages like English, Spanish, and French. And for now there is no Slovak version of Google News. Bella is quick to stress that most Slovaks are at least bilingual, but also admits that “it’s definitely easier to do this in a language which is not a world language.”

So whether the concept can cross international borders remains to be seen. Piano’s goal is to expand into five more European countries by the end of 2012. In countries similar to Slovakia, those with 1 to 3 million Internet users, total participation from the news publishing industry is not necessary for Piano’s system to work. Having about six publishers on board should be enough, says Bella. For larger countries, Piano plans to offer a region-based, modified version of its services.

To publishers asking only for the licensing of its technology, Piano has so far said no, insisting that publishing industry expertise and a keen understanding of reader psychology are what really make the system work. Piano says it is not afraid of bigger tech players scooping its market or even competing with it in Slovakia. “We are not really a technology company,” says Bella, “Apple or Microsoft or Google are not getting into the business of spending two months meeting with the publisher and advising them how to do business. That’s what we’re doing.”

Should it successfully launch in other countries, Piano plans to begin sharing data among its news publishers internationally. Bella is fascinated with the idea of finding out just how similar, or different, reading habits around the world are.

Piano’s expansion into Slovenia began at the end of January. Eight major Slovene publishers controlling twelve media brands are participating, including Delo, Slovenia’s leading daily.

Whether or not its business model survives outside Slovakia, Piano’s most important contribution to the global news business may be its ability to help publishers explain themselves to news consumers. Piano’s persistent championing of news as an important service, part of any functioning democracy, and one worth paying for, is a boon to a demoralized industry.

William F. Baker is journalist-in-residence at Fordham University and the president emeritus of WNET, the public television station in New York City. Evan Leatherwood and Eric Hurtig helped write and report this article.