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Building a Paid Content Platform

Can publishers do it in-house or do they need a third-party?



Matt Kinsman By Matt Kinsman
12/01/2010

According to FinancialTimes.com managing director Rob Grimshaw, the FT's paid content strategy "isn't publishing as much as Internet retail." The advantage of that approach for publishers is the tremendous amount of data that can be collected about the audience.

The challenge is setting up a back-end that offers a convenient customer experience yet still offers security for both publisher and client (The New Yorker recently told subscribers the magazine was resetting passwords for those who never bothered to change the default user name/password they were assigned when they subscribed because different settings were needed to keep non-subscribers from being able to access the archive for free).

Publishers increasingly need a platform that can support multiple content types (Webcast, podcast, video, white paper, e-book) and present the asset clearly to the user, and work with any third-party vendor supplying a specific format, such as Webcasts.

At this early stage, many publishers with a paid content platform are following a hybrid approach of developing non-transaction tools (search etc.) in-house, then turning to a third party for the actual transaction to ensure security. Here, three publishers offer their approach to building a back-end.

Chemical Week
Chemical Week switched to a paid content model in 2007, a move that generated more than 30,000 new customers and helped stop a 30-year revenue slide (In September 2010, Access Intelligence sold Chemical Week to IHS Inc., a global information and services firm.) Nearly all content on Chemweek.com is accessible only by subscription, with prices ranging from $200 to "several thousand dollars" annually for e-newsletters.

CW's paid subscription platform is a combination of a CMS developed in-house by Access Intelligence with gating and authentication tasks being handled in real-time via OMEDA, according to John W. Rockwell, director of marketing and -emedia at IHS.

"In 2007, when we deployed the current system, we needed a fast-to-market solution that allowed us to create a tight paywall and, at the same time continue to manage traditional ‘fulfillment' functions efficiently," says Rockwell. "This set-up did just that. We were able to employ some simple CRM ‘best practices' as well by combining a myriad of separate database systems into one ‘master.' Basically, we control gating, e-messaging and order processing in one infrastructure. This allows us to maximize sales opportunities at every turn."

August Home Publishing
August Home Publishing-which publishes hobbyist titles Garden Gate, Cuisine at Home, Workbench and Woodsmith-has charged for online content for more than 15 years. Today, the publisher sells approximately 200 work plans per day (charging $9.95 for most). "That's pretty significant revenue when you consider it's about 98.5 percent profit after credit card charges," says founder Don Peschke.

August Home also offers a membership program that charges between $19.95 and $29.95 per year and is the company's biggest revenue generator, according to Peschke.

Much of the back-end is done in-house, with actual transactions being handled by the Yahoo Store. "Everything right up to final purchase page is all ours, it’s just the secure payment part that is the Yahoo Store, and nobody knows it’s there," says Peschke.

August Home also had to figure out the sequence of transactions. "People come online and expect to be able to download something now," says Peschke. "Would we take the time to verify the credit card and all that stuff? We decided not to. What have we lost? There is no physical product to ship. We wanted to make it the most comfortable experience for the consumer. Rather than protecting every last dime, we said if we take a hit, we take a hit. But we haven't."

American Banker
For sites like AmericanBanker.com, Source Media has created a link between its Web publishing platform (iProduction) and customer fulfillment system (Cambey & West) to govern access to content.

"In that sense, the back-end is purely third party," says Adam Reinebach, senior vice president, inside sales and technology. "With our conversion architecture, customers must have a an online 'token' to access our content. This token is granted to trial subscribers and of course paid subscribers but becomes invalid once the trial period is over or their paid subscription expires."

On the content side, one of the features Source Media required from iProduction was the ability to make a story paid or free on the fly. "For American Banker, the default treatment is always going to be paid, but the editors typically make a few stories free each day in order to give prospective customers a taste of the type of content we provide," says Reinebach. "On the marketing side, we wanted to improve our ability to renew customers online, which we've been able to do with iProduction and Cambey."

Matt Kinsman By Matt Kinsman
12/01/2010







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