With digital revenue still not measuring up to print losses and ad blockers becoming more common in the top-right corners of browsers, media owners increasingly have to reassess how they go about sustaining their online businesses. And over the last few weeks, Tangible Media and Bauer, two of the nation's biggest magazine publishers, illustrated there's no concrete rule applicable to doing this, with the pair taking divergent paths as they set about creating commercially sustainable online properties.
Tangible has gone the paywall route by introducing a subscriber model to Dish, requiring readers to pay an annual fee to access its full back catalogue of recipe content.
The subscriber offering is broken down into three annual auto renew payment options: print only for $38.60; digital only for $34.90; or full access for $59.90 (those who do not want the auto renew option are required to pay a higher fee).
In much the same way that SVOD deals were offered to telco subscribers free of charge for a limited time, Dish is also employing a similar strategy with the launch of its paywall.
"We consider subscribers of our products at the top of our food chain," says Tangible publisher John Baker. "They represent the super consumers in our world. So what we’ve done for them as part of our launch strategy is that we’ve given them free access to that recipe content for the life of their current subscriptions. We believe that at the end of that, they’ll be quite comfortable converting. In order to extend their access, people have had to agree to an auto-renewal model for their subscription. That makes those subscribers much stickier … it’s a proven model."
Baker says that recent online tracking of Dish stories suggested there was a significant demand for recipe content, leading to the decision to launch the paywall.
"We’ve never made all of the recipe content that we’ve built up over the years available digitally, and we always felt there was a real intrinsic value in all of that content," Baker says. "At the centre of it is a really simple belief that if people are prepared to pay for our physical recipe content, then why wouldn’t they pay for our digital recipe content?"
One reason why they may not want to pay for it is because the internet is already inundated with recipe content from chefs and home cooks, who liberally disperse their culinary secrets on their websites.
"It does seem a bit counter-intuitive when the web is full of free recipe content," admits Baker. "But it’s not just a generic recipe sourced from somewhere in the world. It is a Dish recipe, created by us, tested by us, made from local ingredients, shopped by us and styled by us. And we think that gives us much greater consumer value than a commodity type recipe that you find by searching Google."
Baker also points to the fact that competition between free and paid-for recipe content has already been playing out in print for quite some time.
“There are various free recipe products inserted into newspapers and so forth. And the proliferation of those hasn’t meant the decline of paid purchasers or subscribers for Dish. The more people are giving away vast quantities of content for free, the more generic that becomes and the more special what we do becomes.”
The paywall comes at a time when consumers are showing a greater willingness to pay for online content—a shift that has largely been driven by introduction of subscription on-demand services like Spotify, Pandora, Netflix, Neon and Lightbox.
“I think the ecosystem of paid-for digital content is maturing to the stage where it becomes more comfortable to pay a subscription rate to access something I put value on," says Baker. "It doesn’t matter whether it's broadcast content, recipe content or news, I think it just requires more publishers to have more courage. And the more that do, the more mainstream it will become. The less reliant we are on ad revenue the better."
These sentiments mirror those of niche publisher Bernard Hickey, who previously told StopPress that he doesn't believe mainstream publishing has a future if it's only funded by advertising, and is also reflected in the subscriber strategy that has seen NBR cut back on the number of ads that it runs.
The success of the NBR paywall when viewed in the context of consumers being more willing to pay for online content has led to yet another re-emergence of the paywall discussion in the local market, and APN chief executive Ciaran Davis recently also weighed in on the debate confirming an NZ Herald paywall was on the cards.
Despite the relative lift in optimism regarding paywalls, Baker advises publishers to tread carefully.
"I don’t think paywalls are for everybody," he says. "I think there’s a particular set of circumstances around the Dish brand that have given us confidence to make the investment that we have."
Even if done in-house, as it was in this case, incorporating a paywall isn't cheap, and the graveyard of past failed efforts in this space would make even the most gung-ho publisher a little nervous.
"There’s always a sense of trepidation when you’ve invested a whole lot of your shareholders’ money in a new product," says Baker. "But I am confident largely because of the product we have to sell. I think what the Dish team creates is phenomenal. Lisa [Morton] and Claire [Aldous] have been working together on the publication since 2004 and they have a great following and profile in the industry."
The Dish commercial model isn't limited solely to the paywall, with Baker also saying that it creates a range of new sponsorship opportunities. He says Dish is currently in talks with several brands that could sponsor selected recipes and release them to the public free of charge.
This approach is similar to Pandora's sponsored listening sessions, which give listeners access to an hour's ad-free listening if they engage with an interactive ad fed onto the interface.
In late 2013, Bauer acquired the NZ Listener from NZME (then APN) and inherited a struggling paywall that has never recovered. It therefore came as little surprise that when the publisher unveiled its digital strategy earlier this year, there was little talk of paywalls and the focus was largely on rethinking the delivery of content in the online space.
In early May, Bauer's head of digital Michael Fuyala announced the publisher would be launching new online brands FQ.co.nz, Food to Love and Homes to Love to house all its fashion, food and home-related content respectively, as well as relaunching Woman's Day and Woman's Weekly.
"We're halfway through [our relaunch]," says Fuyala.
"We've just in the recent week or so launched Food and Home, later this week we will be launching Woman's Day and next month we'll be launching Woman's Weekly on a new platform."
In contrast to the paywall strategy introduced on Dish, Bauer's Food to Love brand will be ad-funded, providing visitors with free access to its entire library of recipes.
“It’s a … food and recipe destination with three times more content than our nearest local competitor,” Fuyala previously told StopPress. “We’re creating more recipes than anyone else in this market: 5,000 a year; that’s almost 100 a week.”
And the scale of this proposition has already attracted the interest of Countdown, which has come onboard as a launch partner.
"That's a 12-month partnership, and a big part of that partnership is around content as well," says Fuyala.
Countdown has already combined price-based marketing with recipe content through its 'Feed Four for $15' campaign, and it wouldn't be much of a stretch to see this approach also creep onto the pages of the Food to Love site.
But Fuyala says the interest from Countdown isn't only attributable to the scale of the website, which Bauer hopes will reach 200,000 visitors per month within the first year.
"If they go to Stuff or the Herald, they can get a mass audience, but we're the only publisher providing a contextual environment for female audiences. Getting a Countdown clip asking you to buy your groceries on a recipe site is a much better fit than reading about a flood on the homepage of the Herald. That's really where we really differentiate our product ... Even the way the brand is designed, it's called Food to Love, so it indicates passion for food."
The decision to launch a series of new brands means Bauer will be required to raise awareness over the next few months, and the publisher has committed around $1.2 million to doing this.
"Part of what we've committed to is a massive brand campaign for Food to Love, so we'll be serving out ads across all of our magazine brands, including Woman's Day, Your Home & Garden, Woman's Weekly and Taste, over the next six months. It's about generating a really huge presence, and we've actually integrated Countdown into that message as well. We've also got a massive digital display campaign being rolled out across our whole network over the next 12 months, and that's really going to be tailored to the seasons and time of year. We've also got 130,000 emails and social media, both of which are going really well.
"We're also doing editorial integration in all of our magazines, so eventually, by next month, wherever you see a recipe, you'll see an editorial pointer through to Food to Love. So, for example, if you're looking at Taste, at the bottom of a recipe we might have a line that says go check out Food to Love for more recipes. And this also applies to Woman's Day and Woman's Weekly ... And we'll also be doing a bit of sponsored video that we will distribute via Facebook and YouTube."
Fuyala also says there's serendipity surrounding the launch of the Food to Love brand, given recent moves in the industry.
"You look at Cuisine, it's a great magazine and they had a great website, but they've just folded that into Stuff in the news template. If you ask me, they've kind of taken themselves out of the game. And then you've got Dish, which is going down the paid route and also taking itself out of the game in a way ... So, it's definitely an aligning of the planets or just dumb luck."
However, this doesn't necessarily carry the guarantee of success in the digital space, and Food to Love will also be pitted against NZME's Bite.co.nz, which currently reaches a monthly audience of 185,000 visitors and grew around 28 percent over the last year*. And over the next few months, it will certainly be interesting to see how the respective strategies of the various publishers evolve.
- Disclosure of interest: Dish and StopPress are both part of the ICG Group.
- *This sentence was updated after inital publication.