Thursday, April 5, 2012

Language barrier helps publisher paywalls

Europe is a patchwork of dozens of different languages, and news media now see this as an opportunity. They are banding together to charge for internet access to local-language products.

Dutch and Flemish publishers are the latest in Europe to consider erecting a shared paywall around  content in their languages, Paid Content reports.

The concept is already under way in Slovakia and Slovenia, where Piano Media has gotten media outlets to create a shared-payment system.

Piano has been successful enough in Slovakia that it announced a 35 percent price increase, and it is eyeing expansion opportunities in a number of other countries in Europe and beyond, said spokesman David Brauchli.

Get the big players

Piano's model depends on getting the major media in a country -- newspapers, television, magazines -- to all agree on a shared revenue system, Brauchli explained. Once the biggest players in Slovakia signed up, it was easier to get the others to agree.

It works like this: Piano Media takes 30 percent of the subscription revenue, each media outlet gets 40 percent of the revenue from any subscriber it signs up and they all share in the remaining 30 percent based on how much time subscribers spend on their sites.

There are 12 publishing houses with more than 50 different sites and services within Piano’s Slovak system, which launched in May 2011. In Slovenia, 10 media outlets launched the system in January. Each media outlet decides how much material to put behind the paywall, usually less than half.

Piano recently increased the subscription price for the Slovak system to 3.90 euros monthly from 2.90, and to 39 euros annually from 29.

Revenue grows

Piano declines to comment on total revenues or how many subscribers it has. However Brauchli said in an email, "The results from Piano's first operational month in Slovenia are in. We saw a 37% rise in revenue per 100,00 users in Slovenia over Slovakia despite Slovenia being a much smaller market than Slovakia. There are only 1.2 million internet users in Slovenia as compared with 2.3 million in Slovakia."

The system works best when most of the local-language media outlets participate, leading to questions about whether this creates a monopoly. It also seems that it would be harder to execute in a large European country like Germany or France, where there are many more competing outlets.

This type of service could help preserve languages that have only a few million speakers: by making the content viable economically, it helps guarantee that media continue publishing in the local language.


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