Piano Media, group paywalls and lessons from TV subscriptions

Tomáš Bella likes thinking big. The CEO of Piano Media, the Slovakian company that is building a consortium of 12 publishers and 50 sites in eastern Europe using its paywall technology, wants publishers to charge readers for online access in an intelligent way and he see no reason the model can't work for all publishers.

For a fixed subscription fee, Piano consumers users get full access more than 50 sites, mainly in Slovakia and Slovenia, an in innovative group paywall project, And today the price for consumers to read all those titles is rising from €2.90 (£2.42) a month to €3.90 (£3.26), with more prices planned for the future, as Bella tells me in an interview. 

He's one of the speakers at our Paywall Strategies 2012 conference in London this month and I thought it was a good idea to ask him how the paywall project is going.

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For Bella, his inspiration is not so much the news publishing industry but cable TV - a subscription service where people pay up front on a monthly or yearly basis

"We are trying to get to that situation where people don't think about paying," he says. "The thing is, personally, micropayments will not work for the same reason that newspapers will want to sell individual print articles.

"We have realised that when people are paying for cable (TV), it's not for 100s of programmes - it's for the piece of mind that will have a good experience. That's what we are moving towards."

Today's price rise is in part due to publisher demand but is also part of Bella's long term plan: 

"Most publishers would like it to be higher it will be higher in future. For us the first payment is the most important. We are trying to break the psychological barrier between the customer and paying for content."

Technology challenges

Every media business wants to make more money, but not many have the ability or resources to truly innovate, while they are fighting to keep the bottom line intact. This is where Bella wants to step in:

"I worked in the biggest newspaper in Slovakia and we tried to do a paywall but it didn't work, We wanted something that made it easy for people to pay. So far, we can prove that (Piano's system) is working because we can show that people who had tried previous systems are making more money."

He adds that one client has increased online revenue by six times since installing the Piano technology last year, although Bella won't share specific revenue numbers for brands or indeed the overall revenue share for the company, but we do know Piano made €40,000 in its first month of operation in May last year.

European expansion?

This may well work fine in Slovakia, but what abour further afield? Or in the UK where publishers duke it out in the ultra-competitve English language news market?

This year Piano will launch in two or three more countries and talks are on-going with publishers, although Bella won't say where and with whom. He argues that the model can work elsewhere, including in Western Europe where the market is so developed "you do not need many publishers" to make a Piano-style system work.

The bar for success for the Piano system sounds small but is in fact ambitious: the target is to convert one percent of a site's users to paying customers - which is more than being met currently.

To put this in UK terms, if the country's biggest news site Mail Online has 99 million unique users a month (according to internal Omniture Loading... companies omniture figures released yesterday) that means that using Piano's EUR3.90 a month system, it would make EUR3.86 million (£3.22 million). Maybe not enough to tempt the Mail away from online ads, but Bella argues that advertisers should be interested in the more engaged readers that a paywall might bring.

A porous wall

But this is less a wall than a content subscription system: sites can make as much or as little of their sites available for free, with the proportion typically ranging from 30 percent to 60 percent across Piano's client base. "

"Our main aim is not to make this a huge wall," as Bella puts it, adding that the system need not "cost anything in traffic." "My bet is that no one is going to follow the London Times model," he says. "After eight or nine months, our publishers are seeing there is no difference in traffic.

The aim is to not turn people away." Bella doesn't cite official traffic stats for this, but he is happy to promise clients that a partly-closed site won't affect audience. Given that so much news traffic comes through search, and that Piano publishers don't necessarily turn away new customers at the first hurdle, he may well be right.

Paywall Strategies 2012 is on February 23 at RBS in London. For more information and tickets click here.