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Digital Media Strategies 2013: Gated access panel on the headaches of customer service, technology and tax

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Jasper Jackson, TheMediaBriefing Experts' Blog, B2B Media, Consumer Media, Digital Media, Newspapers


Persuading people to pay for content is the biggest challenge you face if you're putting up a paywall, right?

Well, for most publishers that's only the start. As the panel on gated access models told the Digital Media Strategies conference in London, customer service, technology platforms and even tax can cause you just as many headaches.  

Customer Service

Phil Clark, digital and audience director at UBM Built Environment, says digital access massively increases the complexity of actually delivering content to your audience. 

"Customer service fulfilment, whether it is around existing subs base or through to new customers coming in is the biggest hurdle," says Clark. 

"It's an area we didn't consider enough - when you are sending out print you have some occasional issues, but our fulfilment provider Dovetail services say 90 percent of their complaints are about online access."

Nat Knight, group publishing director at Incisive Media's Risk Management division, adds: "People say our search function doesn't work in 2.5 seconds or whatever - they have these expectations of a website (to be like Google or Amazon. 

"If Google starts providing exactly what we provide then we'll have a problem." 

Technology

For Knight, finding and implementing the right technology to operate a gated access model is an equally tough challenge.

"I never thought I would have so many dull meetings about tech," says Knight.

"If you work with a good team, you don't have to integrate entirely as a publisher. But you need to work very closely with them, that's the biggest issue with any digital product."

Bronwen Auret, general manager for South African business publisher BDFM, says that while someone with the resources of the Financial Times might be able to develop their own tech platforms, smaller publishers have to work with partners to keep up. 

"When you are a traditional business, to innovate quickly is quite difficult. I have a developer team of four, and a building full of very clever traditional people but what we have tried to do is partner with people who are better."

Tax

Another major challenge - one which applies to any paid for digital content - is VAT. While print media is exempt from VAT in the UK - digital products are subject to the full 20 percent rate. 

The problem becomes particularly challenging when bundling together print and digital access - often requiring publishers to assign an arbitrary value to digital which a subscriber is rarely aware of. 

"There's no set rule on tax," points out Clark. "The way we've done it is to account for a digital price, so we've split a subscription into a certain amount being print, and a certain amount digital. Overall you end up paying approximately six to eight percent on the digital and print bundle."

For Knight the calculation is easier, as Risk splits the nominal valuation of its digital and print subscriptions 50-50. However, that isn't something the publisher discusses with its customers, and it leaves a huge degree of uncertainty about the legal status of the arrangement. 

He says: "We never talk about VAT when we talk about pricing. We shouldn't be setting what the tax levels are. I'm sure the government would like us to do it more in their favour."

"I'm sure the gov would like us to do more in their favour." 

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