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How Online Pay Walls Can Impact Your Fulfillment System

Plan on force-feeding integration if you’re not rebuilding from scratch.



By Bill Mickey
02/28/2010

Publishers once again have turned to online pay walls as a way of recouping a sagging top line and monetizing an increasingly expensive electronic content operation. For many publishers that have worked with a print-based fulfillment system, adding on a pay wall can work, but there are several pain-points to keep in mind that, ultimately, may require a complete overhaul if truly integrated product bundles are the goal.

Integration issues arise from a technical context, such as shoehorning an online pay wall and all its accompanying product iterations and bundles into a system originally built for print fulfillment, or ongoing revenue and tactical procedures, such as the timing of revenue allocations and renewal promotions for subscriptions to digital content, for example.

SAGE Publications, an academic publisher of print and electronic journals implemented electronic, paid access to its publications about four years ago. Emily Koberling, SAGE’s senior circulation manager, readily admits that their paid system had to be force-fit into the fulfillment infrastructure, recognizing a better solution would eventually be necessary. “The system we had was not prepared for that. We had to do a lot of fudging,” she says.

The company forged ahead and built workarounds. Market trends were quickly creating a new strategic imperative. “We had been siloed and our market was quickly moving to electronic delivery. You can’t isolate, the delivery has to be the same,” says Koberling.

SAGE is currently working on a new, ground-up inhouse system that will allow greater flexibility. That system is about a year away from completion. Yet many publishers are still operating from legacy fulfillment systems, and if you’re planning to bridge your current fulfillment system to a paid access model, here are just a few of the hurdles you can expect to encounter.

Events Versus Time

SAGE’s fulfillment system can recognize content type—print or digital, for example—and, once purchased, will send out the appropriate messaging to the customer. Print products are purchased on an event-based process, meaning a monthly publication is served up 12 times. If a customer buys an electronic product, it’s a time-based transaction, meaning the product’s term should start counting down from the day it was purchased. Time-based electronic purchases are also governed by an array of access parameters.

SAGE’s system can’t process time-based transactions. All purchases must be governed by event, which means electronic subscriptions are forced into a print schedule. This sets up a less than optimal arrangement. “It depends on the title, and when we publish, but we’re giving access to content longer than we want to. It’s rigid, and we recognize that. If it was time-based, we could control it much better,” says Koberling.

Earning Revenue

With a fulfillment system built for print, setting up an earned revenue schedule that can handle the immediacy of electronic purchases is also very difficult. Earned revenue is forced into a monthly schedule, no matter what the channel, and as SAGE’s print and electronic product bundlings become more complex, so go the revenue models. For example, SAGE already has 63 different packages that are made from hundreds of titles. “Allocations have been a big pain point,” says Koberling. “That’s another thing people need to consider—what is your revenue recognition point? It has to do with managing allocations of a bundled product.”

Customer Records Management

SAGE’s system allows perpetual access to the content you’ve purchased. In other words, once you buy content, you can continue to access that specific content forever. That, however, means SAGE has to maintain those records forever. “Typically, you can purge your old fulfillment data,” says Koberling. “We can’t do that anymore. We haven’t purged our data in 10 years, and because of the bundled products it’s getting exponentially huge. It’s taxing the fulfillment system and we’re looking at ways to lighten that.”

Testing

MIT’s Technology Review has a paywall system in place that lets users pay for a $24.95 print/digital subscription or a $2.99 per-article fee. Either way, the paywall recognizes the user after login and sends a Web service call back to the fulfillment provider to unlock the appropriate content. Or, if the user is not a subscriber, a promo pop-up is triggered accordingly.

With all of these triggers and service calls going back and forth (a Web service call is essentially an XML feed that pings the database to check a customer’s status), a boatload of testing was required.

According to Heather Holmes, TR’s vice president of circulation and consumer marketing, a series of what-if scenarios were constructed and bounced off the system to test its flexibility. “We tried to stump the system with different product groupings and browser-credit card configurations. What happened if a customer came through Safari and used an Amex card? What if they wanted a refund? We had to make sure all the business rules happened as we expected them to.”

At this point, Holmes is also working on how to reconcile revenues. “Right now, we’re looking at these single purchase events as product stream revenue. I’m not modeling, but I’m tracking. It’s too early to make any predictions. We’re storing the data and when we hit the year-point, we can make some good analysis,” she says.

By Bill Mickey
02/28/2010







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