Online Media

Online Media: The Great Pay Wall of Slovakia


In Slovakia, good pay walls make good neighbors. The Central European country’s top news outlets have set aside their historic rivalries and become partners in what is effectively a national Internet pay wall. In May some readers began to pay €2.90 ($4.18) a month or €29 a year for full access to the websites of the nine participating media organizations, which include daily newspapers SME, Pravda, and Hospodárske noviny, the newsweekly týždeň, and other publications. “I am pleasantly surprised” with the system, says Peter Mačinga, a board member of Petit Press, the company that publishes SME. “We tried a few things on our own a few years ago, and it wasn’t encouraging.”

The new pay model is operated by Piano Media, a Bratislava tech company. Tomáš Bella, Piano’s chief executive officer, says it took a year of meetings to persuade the nine publications to get on board. Most of the partners were already considering charging for online access to their sites but were worried about losing too much traffic, says Bella, who once worked on SME’s website.

Bella promised the publications a system that wouldn’t require any capital investment from them, wouldn’t drive away existing traffic, and would be easy for readers to use. Rather than running into a thicket of subscription plans and passwords, readers could sign in once and surf from site to site without interruption. “We offered it to our three biggest players at first,” says Bella. “Once they were in, it was easier to persuade the others.” He now aims to add more Slovakian publications and is exploring expansion into nearby countries.

Piano’s goal was to get 1.5 percent of the country’s 2.5 million Internet users to sign up in the first year and 5 percent to 15 percent by 2015. “These were conservative estimates,” Bella says, though he declines to give further details. Bella says that after the first month page views at partners’ websites were holding steady, while the pay wall had generated roughly €40,000. Piano keeps 30 percent, with the rest divvied up among the partners based on where subscribers spend their time.

The pay wall earns týždeň €2,000 a month, editor Štefan Hríb says. He likes the simplicity of Piano’s system and believes Slovakian media companies will do better by cooperating than by going it alone. “Without Piano, our individual solutions would be much less effective,” Hríb wrote in an e-mail.

Bella says he wants to target the hungriest consumers of online news. “Only people who are coming through the sites several times a day should be asked to pay,” he says. Piano analyzed each publication’s data to determine the areas of their websites that attract the most frequent users, which helped Bella make recommendations on the sections to move behind the pay wall. At SME, for instance, only pay subscribers get full access to the paper’s popular opinion section as well as the ability to post an unlimited number of comments on those articles. Bella says Piano will regularly tweak the boundaries of the pay wall to optimize traffic.

SME initially decided to put only about 5 percent of its content behind the pay wall. “To be honest, there’s not a lot of stuff there behind the door right now,” says board member Mačinga. Piano “paid for the development. We shared the income. There was no real risk for us.” Mačinga expects to eventually move more content into the paid area of the site. And while revenue so far is small, it’s comparable to what SME earns from one of its top 10 online advertisers. “For us, it looks like it will be a quite interesting source of additional revenue,” he says.

A nationwide consortium of news organizations wouldn’t work in a country the size of the U.S., says Steven Brill, one of the founders of Press+, a New York consultant that designs e-commerce solutions for publishers. Brill, who has no affiliation with Piano, says he has considered bundling subject-specific packages for American readers. He imagines fans of, say, the New York Yankees paying one subscription fee for access to the top news outlets that cover the teams. “In this country, you still have publishers just starting to get their heads around the concept,” says Brill. “Getting all the publishers to agree is hard.”

Bella says Piano’s partners initially wanted a higher subscription fee, but he persuaded them to keep the price low. “We wanted it to be, on a psychological level, an impulse buy,” says Bella. “Otherwise, we’re going to frustrate people who have never paid for news on the Internet before. Let’s break the I-will-never-pay barrier first, and then we will have many more years to think about the price.”

The bottom line: Piano Media has built a national pay wall for Slovakia’s biggest news organizations. In its first month it pulled in only €40,000.

Gillette_190
Gillette is a staff writer for Bloomberg Businessweek in New York.

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