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Feb. 1, 2018, 7 a.m.
Business Models

Learning from the New Yorker, Wired’s new paywall aims to build a more “stable financial future”

“People who have studied the information age at this point recognize that there were a bunch of problems and side effects to the fact that people weren’t asked to pay for content in the early years of the internet.”

Wired’s brand and mission may align it closely with the koan of the internet revolution that “information wants to be free,” but the days of unlimited free content at Wired.com are coming to an end.

Starting today, visitors to Wired.com will be able to read four articles a month, plus a snippet of a fifth article, before Wired asks them to subscribe. A yearly subscription will have an introductory rate of $20 (final pricing is TBD), and will include access to Wired’s website as well as its print and digital editions.

Wired editor-in-chief Nick Thompson, who joined the magazine last January after seven years as editor of NewYorker.com, said that developing a Wired paywall topped his agenda from the earliest stages of taking on the job because “it is my strong sense that paywalls are an essential part of the future of journalism. We don’t know exactly how the web will develop, which platforms will become big, but we do know that having a direct monetary relationship with you readers is one way to insure that you have a stable financial future,” he said.

The idea seems particularly vital now, just weeks after Facebook announced that it would be deprioritize publisher content in the News Feed in favor of content from users. With Facebook reliance becoming increasingly dicey, and with the big tech companies controlling most growth in digital advertising, more publishers have embraced a “pivot to readers” and explored ways to generate more revenue from subscriptions and memberships. In addition to Wired, the likes of The Atlantic, Business Insider, and CNN have all either launched or announced digital subscription products in the past year.

But Thompson argued that reader revenue is also attractive because it “creates the incentives to do the best possible journalism.” Rather than write and optimize for whatever will travel best on Facebook or attract the most attention, he said that subscription revenue puts the business incentives and editorial incentives on the same axis, which is fundamentally good for readers. “That’s just a great place to be,” he said.

This idea will be increasingly core to the paywall and Wired’s overall digital editorial approach. Alongside the paywall, Wired is making some new additions and tweaks to its digital operation, in a bid to convince more readers that it’s worth paying for. For one, Wired says it plans to redouble its investments in digital longform with a reboot of Backchannel, which merged with Wired last June. Likewise, a new Ideas vertical will feature essays from thought leaders in the technology world, including MIT Media Lab head Joi Ito and writer Virginia Heffernan. Wired will also produce what it calls “Wired Guides,” compilations of essays about specific topics such as security, artificial intelligence, and cryptocurrency. (None of these sections will be exclusive to subscribers.)

Thompson said that the paywall conversations at Wired were easier than those at The New Yorker, where he oversaw the implementation of the magazine’s paywall in 2014. This is in large part because many of the central questions Wired would have had when designing its paywall were already answered during The New Yorker’s own paywall design process. One was the inherent tension between paywall meters on one hand and ad revenue on the other: How much does implementing a paywall negatively impact site’s traffic?

It turns out that, at least in the case of NewYorker.com, not much. Thompson said that it’s possible that the act of subscribing actually convinces subscribers to read more of the work they’re paying for, which counters any corresponding decreases traffic from users who don’t pay after hitting the paywall. While Thompson said that he never got a conclusive answer to that question at The New Yorker, it made introducing a Wired paywall an easer sell. (Wired has also been able to adopt some of the backend subscription tools The New Yorker has developed, which will make data collection easier.)

Wired.com and NewYorker.com do differ in small, but significant ways, however. Wired, for example, has a greater percentage of readers coming from Google than The New Yorker, which has a more significant percentage of readers coming in from its newsletters and from Facebook. Those differences in the referral picture will determine how Wired tweaks its paywall going forward. The New Yorker found that newsletter subscribers are highly likely to pay, while Google visitors don’t show that same kind of loyalty.

“Having that understanding has really helped us with Wired,” said Thompson. “Does it shape our strategy? A little bit. It means we prioritize newsletters. It means we prioritize owned social efforts because those are the places to get people in who will eventually be quite loyal.”

Wired’s paywall could be a first step toward a more membership-oriented paid product, Thompson said. Wired is, for example, considering developing a more robust, curated commenting system that could help draw in more subscribers. Other, more membership-oriented product ideas are also in the works, though they’re still in the early stages and Thompson declined to talk specifics.

For Thompson, paywalls represent a correction for the what media executive Alan D. Mutter called the “original sin” of many digital publishers: letting their content be consumed for free on the web. “People who have studied the information age at this point recognize that there were a bunch of problems and side effects to the fact that people weren’t asked to pay for content in the early years of the internet,” Thompson said. “We got ourselves in a little bit of a mess that we’re in right now in the media industry because of that.”

This is ultimately why Thompson isn’t too concerned with Wired.com readers arguing that the site’s new paywall is antithetical to the magazine’s long-held ethos. After all, the second part of “the information wants to be free” argument is often conveniently omitted: Information may want to be free (because it’s so cheap to copy and distribute), but it also wants to be expensive (because it’s so valuable).

“I don’t think anyone is going to see this and say that ‘Wired is throttling freedom of expression’ or ‘Wired is desperate for our money.’ They’re going to see this as: ‘Wired has a smart business plan that will help it navigate the next 20 years.'”

Photo of Wired magazines by kokilduff used under a Creative Commons license.

POSTED     Feb. 1, 2018, 7 a.m.
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