When it comes to online news content, what’s the difference between a “paywall” and a “membership program”?
While the former has a negative connotation (“Stay out unless you’re willing to pay up!”), the latter is a more friendly term that indicates that a news website membership program will grant special privileges, access, deals, etc. for a price. But the line between the two can be blurry, since some news website “paywalls” — depending on how they are configured — can be similar to membership programs. For instance, a site that puts a “paywall” up in front of premium content but keeps other content free might come across better by calling the premium content “for members only.”
At the Digital News Test Kitchen, we’ve assembled an interdisciplinary team to take a fresh look at the “news memberships” business model, as an alternative to the trend — especially among some larger and older media companies — of erecting “paywalls” around their news offerings online.
The team’s primary mission is to determine if membership models that have not yet been conceived of hold the potential to provide significant revenue streams to online and mobile news operations — that is, much more so than news membership programs developed to date by old and new news providers.
The team’s work over this fall and into 2011 includes several key tasks:
- Examine existing paid membership programs by for- and non-profit news organizations — to index what benefits they offer; document the success levels of the programs; identify their weaknesses; etc.
- Look outside the news industry to analyze a wide range of membership models, and identify membership benefits that might be beneficial if applied in a news membership program context.
- Examine the role of mobile access to news content and services (via smartphones and portable digital tablets) in existing membership models, both in and outside of the news industry, as well as the potential for including mobile features within an online or digital news membership program.
- Based on that completed research, devise a number of news membership model variations that go beyond current real-world offerings.
- Test the new news membership models via focus groups and real-world testing with media partners.
Principal researchers in the project are Matt Hemmendinger, a researcher for the Test Kitchen and master’s candidate at the CU-Boulder School of Journalism & Mass Communication, and Daniel Randa, a CU-Boulder graduate student seeking both an MBA at CU’s Leeds School of Business and a master’s degree at SJMC. This author is supervising and participating in the project.
Membership programs within the news industry, more often than not, have been passed over by media executives in favor of other revenue models. Executives at the New York Times Co, for instance, considered three primary options for getting money out of NYTimes.com visitors: a “hard paywall” (user must pay to see beyond headlines and story blurbs, which is a model being adopted by several of Rupert Murdoch’s News Corp.-owned newspaper websites worldwide); a “metered paywall” (unannounced number of free article views per month by a user, with article views beyond the free threshold triggering a demand that the user subscribe or otherwise pay for more content access); and a Times membership model that would leave most NYTimes.com content free to all but offer other perks for a monthly fee. The Times selected the metered paywall.
Experiments with news memberships are happening. For-profit Honolulu Civil Beat, run by eBay billionaire Pierre Omidyar and former Rocky Mountain News editor John Temple, offers several flavors of online memberships meant to support the operation’s news-gathering. On the non-profit side, TexasTribune.org likewise offers several levels of news memberships.
It hasn’t escaped us that membership models are being used and experimented with by non-profit news entities and by purely digital news operations more than by traditional news providers like newspapers and TV-news outlets. We wonder if there are solid reasons that online and mobile memberships won’t work for legacy news providers — or if they haven’t found the right model and the right member benefits to attract a significant membership revenue stream.
Our work is just beginning, so please visit the Digital News Test Kitchen periodically for updates. (You also can follow our Twitter feed, @dmediakitchen.)
For those with a strong interest in the topic of digital news membership models, we have created a Facebook Group, “News Membership Models.” Please join in (you’ll need a Facebook account) if you’d like to join the discussion around this project, or have ideas or membership examples to share.