A piece of music sounds normally sounds better when all the parts are played together. And Slovakian start-up Piano Media argues that, when it comes to paywalls, news publications are also better off when their strategies work in harmony.
Piano Media, founded in May 2011 by Tomáš Bella, former editor-in-chief of SME Online, the digital division of Slovakia's largest newspaper, has persuaded most of Slovakia's major media outlets to sign up to a single-payment system. This means that the country's major news sites share a paywall, and split the revenue between themselves - 40% goes to the news site where the reader bought his or her Piano subscription, 30% goes to the site where a reader is spending his or her time online and 30% goes to Piano Media itself. Its system makes the users' experiences easier by offering a simple pay plan and by reducing the feeling that readers are paying one company for content that they could get for free elsewhere.
The project seems to have been a success: not only did it make €40,000 in its first month of operation, now it is expanding with a national paywall in Slovenia. Nine Slovenian publishers, with 12 brands - eight dailies, one weekly, two magazines and one tabloid news website - are taking part.
As in Slovakia, Slovenian media users will see a Piano Media Bar appear at the top of participating news websites when the project officially launches on January 16. Clicking on the bar will allow users to register to Piano media's single sign-on system. From January 30, users who are not already registered will be asked to sign up and pay to view content on the sites that are part of the Piano paywall. The charges are steeper than in Slovakia: the subscription costs €1.99 per week, €4.89 per month or €48.90 per year, compared to €0.99 for a day, €2.90 for a month, €29 for a year in the company's native country.
Although the experience and data from having launched already in one country made Piano's expansion into Slovenia easier (the launch process took a full year in Slovakia, compared to 6 months in Slovenia) starting in a new place has thrown up fresh challenges. Bella says that, whereas Slovakian media is highly centralized, Slovenia has a more developed regional press. Slovenian news sites also face stronger competition from a large free daily paper and from TV websites. Still, Bella emphasizes: "what both countries share is that media are in crisis and in strong need of new revenue stream, that is in short the best definition of what market is fit for Piano."
Yet the fact that Slovenian media are facing a common crisis does not mean that it has been easy getting rival publishers to co-operate. The process was "never going to be easy", admits Bella, and he emphasizes that "Piano does not take the competition element away. On the contrary, it encourages competition since revenues are shared only according to real usage of the sites by each individual subscriber." Piano get rounds this partly because its single payment system is designed in such a way that not all publishers paywall strategies have to be the same: individual media houses will still have the freedom to choose which content they charge for, and how they want to shape the paid user's experience.
Competition aside, Bella says that in the end publishers understood that it was a good idea to share some online infrastructure to create a payment system that is easy and universal for users. "It always makes sense to create a product in a structure that readers actually prefer," he states.
But while Piano may make readers happier to pay, there are potential drawbacks for publishers to the Piano system. Firstly, 30% of paywall revenue goes straight to Piano - the same as the cut that Apple takes on iPad apps downloaded through the App Store. More importantly, Piano claims that it "takes care of marketing, advertising and PR, allowing publishers to concentrate on what's most important, reporting and publishing the news." This offer might be not so welcome to media companies who want to maintain tight personal control over their brand.
Bella answers these concerns, however, saying that publishers can "have as much control as they want - we provide them with marketing manual with all our suggestions, case studies, prepared graphics and PR materials, but it is up to them if they [use] this or if they change it and use [a] different approach within the common system." News organisations also retain access to user data for readers who subscribe on their site.
Bella emphasises the benefits that Piano media has brought to Publishers in Slovakia: "the media did not experience any drop in other revenues, like from advertising, so Piano revenues are net gain for them; and we also did not see any change in web traffic patterns, people are not leaving the sites that are paid for the ones that remained free," he states.
But while Piano seems to be expanding successfully, its growth could still be seen as relatively modest. Slovenia is a small market, with 1.3 million internet users (65% of the country's total population). Still, perhaps this is only the beginning. Piano is in talks with publishers from 11 European nations and Bella says that, although he is not ready to name the specific markets, the company has plans to launch in three to four new countries by the end of the year.
If the expansion goes well, other European media markets could soon be playing to Piano's tune.