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Jan. 10, 2012, 9 a.m.

Piano Media wants national paywalls all over Europe

Lessons from Slovakia’s experiment include: Don’t charge people who lived under Communism for the ability to comment.

Liptov, Slovakia

The expansion of Bratislava-based Piano Media into Slovenia is just the beginning of the company’s efforts to bring national paywalls to five European countries by year’s end.

Eight Slovene media outlets have agreed to unite behind a single paywall starting Jan. 16. It’s the cable TV model: Pay a flat monthly fee for unlimited access to everything inside. I caught up with Piano CEO Tomas Bella to hear how it’s going in Slovakia, where the experiment began seven months ago. He’s not yet willing to share subscriber numbers, but he did share observations — mainly, that Slovak readers are not much different from those in the United States or elsewhere.

He said there are different types of readers. The first group “will sign up no matter what you do,” he said. “They just do it in the first week or first weeks. The price can be almost any price. They will pay, and they will pay for a year.” These are people who trust traditional media institutions and are willing to pay to help them survive.

As for everyone else, the barriers to subscribing range from inertia — some people need lots of naggy “here’s what you’re missing” emails — to philosophical opposition. “People were saying, in principle, I will never pay because the Internet should be free,” Bella said. He said he had expected a strong correlation between socioeconomic status and willingness to subscribe, but the divide turned out to be philosophical.

“The number of subscribers is still going up as more and more people are telling us that they were against the concept at first but now they got used to the idea and already feel comfortable with paying,” he said. “Last week I saw one post on Facebook that literally said: ‘You know what, I have woken up one day and realized that I do not know why I was against Piano all the time, and I have paid.'”

For Bella, a former newspaper editor who has tried and failed to get paywalls off the ground, that’s more satisfying than making money. He is out to reset the way people think about the value of news. He said the subscriber numbers were “not so big” at first but that the Slovak paywall generated €40,000 in its first month.

The biggest mistake, Bella said, was trying to charge users for comments. Five of the Slovak publishers wanted a way — any way — to help manage the daily deluge of comments on news articles. But citizens of a former Communist regime don’t want their free speech impinged upon. “This was a very special central European problem,” Bella said. In Slovenia, the paywall will only cover text and video at launch; publishers will be able to add in more kinds of content down the road.

The price for the Slovene package is just under €5 a month, a couple of euros more than in Slovakia. Piano’s market research found that was the most that most Slovenes are willing to pay for news, Bella said.

“It’s still, of course, not as much as publishers would like to have, and it’s still not, I would say, a finite price. But they understood that we need to start at some level of — look at it from the point of view of the reader, not from the point of view of how much the content costs. The research was really very strong. It said that if we go any higher, then we are losing money.”

Pricing for the Slovak paywall, at €2.90 per month, was based more on intuition than research, he said.

The subscription model in Slovenia remains the same: 40 percent of the proceeds goes to the media organization that initially captured the subscriber, 30 percent is distributed to all partners based on how much time the reader spends on their respective sites, and the remaining 30 percent goes to Piano. So if I sign up for Piano’s paywall at the website of Delo, Slovenia’s national broadsheet, and I spend most of my time at Delo’s website, most of my money goes to Delo. (Tracking time on site has proved to be the most complicated technical challenge, Bella said. That and going after users who avoid the paywall by creating multiple free trials.)

Bella said he hopes to sign up 1 percent of the Slovene population, or about 20,000 people. He said he expects to announce two or three new deals with publishers in Slovakia later this month.

Photo of Liptov, Slovakia by Martin Sojka used under a Creative Commons license.

POSTED     Jan. 10, 2012, 9 a.m.
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