Single-article sales continues to be a recurring topic for publishers, and is often raised by start-up companies. However, single-article sales do not seem to be part of many publishers' strategies even though digital products have been sold for a long time.
The reasons for this include the low-selling price of individual articles, other priorities, and fear of subscription cannibalization. Recently, however, several indicators led me to believe the issue warranted deeper analysis. These included meetings I had with three start-up companies, my personal subscription to the Dutch platform Blendle, the launch of Instant Articles by Facebook and what I learned at the last Digital Innovators' Summit in Berlin. Plus, recent developments in the relationship between social networks and publishers seem to indicate that the playing field is changing.
The article, a new way of consuming information?
In the age of print, publications held the top spot, and individual articles had no autonomy. One could refer to an article, but not acquire it without buying the whole publication. There were various sources that compiled articles from all over the world, such as Courrier International in France. In that magazine, articles were grouped by topic, combined with other articles, integrated into a whole, and offered by subscription.
The shift to digital, along with increased internet access worldwide, has changed everything. At first, publishers offered their content for free on the web, with the hope of developing a revenue stream through advertising. Content aggregators such as Google News, MSN, Yahoo, and platforms like Flipboard, offered a consolidation of editorial products by theme, taken from all kinds of sources. An article’s link with its core publication was frequently lost, and articles from highly respected sources found themselves mixed with material from other media brands, including less-than-professional sources and amateur blogs.
Reading behavior has also shifted dramatically. Many studies describe how readers now pick and choose successive articles, gleaned from aggregators or included in a Twitter feed. The current generation enjoys an entirely new relationship with information and its consumption, far removed from the earlier model in which it was relatively easy for publishers to be profitable.
The article and the advertising mirage
Offering editorial for free was the most widespread approach in the early days of the internet, with the hope that costs would be covered by advertising revenue. Now, more than 10 years later, it is obvious that this has not happened. From the outset, the value of online advertising has been much less than its print equivalent. But almost importantly, its value has been siphoned off by Google and Facebook, which have managed to capture more than 80% of this market. Today, it is a rare publisher that is profitable using an advertising-only based model.
The article: source of income?
Selling single articles has often been proposed by publishers, and one can still find this model on many information sites. On the French daily newspaper site Le Monde, for example, subscriber-only items can be purchased individually. But the revenue from these sales, including the archives, is low. In order to make any money, publishers had to increase the price of an individual article until it became so close to the full issue price that buying one article made no sense. (Le Monde even sells them at the same price!)
The Blendle experience
The Dutch Blendle platform, founded in 2014, implemented an alternative model for these article sales. It offers all articles published by Dutch newspapers (and some foreign ones) on its platform, which one pays "on consumption" from a prepaid wallet. An item can cost as little as €0.2, which makes it affordable. The new registrant also receives a credit for some free reading to encourage use of the platform. A daily email suggests the best articles of the day.
At first, this service was a real success in the Netherlands, with more than 60 000 users, and all the dailies participating. It was able to expand in Germany and then in the United States. But, three years later, usage is slowing down, and the original publishers are starting to remove their content. The Dutch daily NRC left in April 2017, followed by De Telegraaf in October 2017. For the NRC, the revenues from Blendle were modest (the equivalent of 1500 digital subscribers), and Blendle actually became a competitor. They found that the NRC brand was weakened, and they were disconnected from their reader data.
In France, Articly (the former aggregator One More Tab), attempted a similar venture but couldn’t convince French publishers to join. Blendle also failed to recruit all publishers in France. Articly ceased operating last November.
Other micro-payment models
In Germany, the start-up Laterpay has proposed a different model, managed by the publisher. The reader registers and agrees to pay for articles read after reaching a given amount (EUR5). There is no barrier to access, and once the threshold is reached, more than 75% pay the amount due. Non-paying readers lose access. Der Spiegel was the main partner of this experiment, but other publishers weren’t willing to join in on this adventure at first. From what is reported by reliable sources, the total financial results for the Spiegel have not been as good as predicted.
More recently, in Canada, Winnipeg Free Press has put in place a similar strategy, proposing, alongside its digital, paper and combined subscriptions, the option of an single article consumption, with month-end payment. The published sales indicate a daily sale of 1 000 items to $0.27 (Canadian Dollars), a little less than $100 000 annually. An honorable figure, but whose equivalent in digital subscriptions is just under 500 (the Digital subscriber portfolio would be 35 000, including 27 000 combined with paper). The publisher states that the interest is mainly the footstool it constitutes for the subscription.
In France, Qiota is trying another approach: a prepaid wallet, valid for several publishers. But few have joined the platform so far, and it was recently bought by TBS Blue, a subscription management software publisher. Its success remains to be seen.
The article as a stepping stone to a subscription?
The failure of the first hard paywalls created in 1997 prompted a change to a "metered" model, based on counters. The New York Times was the first one to implement this. Since then, articles are the hook which inevitably bring the interested reader to the paywall. But it is still not all that easy to convert the reader to a subscriber when they hit the paywall. Many publishers report low conversion rates.
Strategies continue to evolve, such as offering free access to articles, in exchange for actions such as the creation of an account or viewing an ad, and then gradually progressing to requiring payment. The application Poool (or Piano in the United States), subject of a previous blog post, allows such implementation, using a ‘commitment score’ assigned from the reader’s actions. Users can define the steps that make up the commitment score scale, up to the final conversion of the reader. In this scheme, the article clearly has the role of a hook, the subscription being the desired result.
It is interesting to see that Facebook is trying to shift Instant Article to a paywall model too, and Google is removing restrictions on paid articles in its ranking algorithm. Both players are trying to keep publishers on their side, at a time when many are moving away from them.
How can Advantage be used for single article sales?
When it comes to the "hook strategy,” an integration between Advantage and the conversion ecosystem can be easily implemented. Such an approach was described in the article on Paywalls. Meanwhile, when it comes to developing direct income strategies, other possibilities exist.
The first design of single article sales was done when digital content was emerging, primarily in scholarly publishing. In 2008, we initially anticipated that all articles in the product catalog would be referenced and extended the product code to 16 positions. However, this explosion of individual references did not take place. Today, the sale of individual items can be done very simply, retaining the article reference and its subsequent access rights.
When it comes to switching to a counter-based model, Advantage offers another useful feature, that of usage-based subscriptions. A unit credit is acquired for a certain price, and decremented as the consumption of articles take place. The credits can have an expiration date or not, income can be recognized as access is consumed, or it can be recognized evenly over time regardless of actual access. And finally, details on what was consumed can be fed into a dedicated table, accessible to customer service.
In summary, the challenge of finding a sustainable economic model remains, and no system can provide this out-of-the-box. This is still up to each publisher.