The story so far
Digiday's Lucia Moses explains (emphasis added):
BuzzFeed News is adding messaging to pages that solicits small donations of $5-$100 as seen [to the right]. The initial benefits will be updates on big investigations and new video programming. (There’s no member-only content for now; if the program is successful, BuzzFeed News hopes to add perks that will come on top of its news content, that will remain free.)
BuzzFeed News, like The Guardian, has staunchly adhered to the idea of being part of the free and open web. But... it’s eager to capitalize on people’s growing willingness to pay for quality news....
BuzzFeed News said it’s working on its membership program as part of the Google News Initiative...Google helped BuzzFeed with tech and market research; it’s unclear if Google is planning to expand its subscription program to accommodate publishers that have reader donation or membership programs. A Google rep confirmed the company is working with Buzzfeed to help it explore different business approaches and understand how its readers would react to this kind of model.Moses refers to her previous report on "a textbook turnaround" with a similar program in the Guardian US (1/26/18) (emphasis added):
Guardian US was primarily ad-driven; philosophically, the Guardian has eschewed the more common paywall model because it believes its journalism should be as widely accessible as possible...
The challenge with one-off contributions is replenishing them. Most of the 300,000 US supporters (230,000) are one-off contributions; the rest are recurring subscribers. The reader support is mostly one-offs because the ability to make recurring contributions was just added a few months ago. The plan is to move people toward recurring contributions, which creates a more predictable revenue stream.
To that end, Guardian US has two people dedicated to reader revenue, which it plans to double to four in the next fiscal year starting in April. They’re identifying topics U.S. readers care about and are more inclined to support with their wallets, and they’re testing everything about the way it solicits contributions, from the color to placement to language of the message, which is typically British in its politeness, from a U.S. audience.
“We could be a little bit more assertive in the way we canvass,” [Guardian US CEO] Webster, a U.K. native , acknowledged.Some key points as I read this:
- Little or no news is locked behind a paywall.
- Payments are entirely voluntary. Emphasis is on being a patron or benefactor, not a quid pro quo.
- The contribution amount is not pre-set by the publisher, but varies from reader to reader based on what they think fair and affordable.
- Payments may in future bring perks, but still a vague degree of quid pro quo (which encourages contributions under communal norms of fairness, altruism, and generosity, rather that exchange norms of bargaining).
- "Prices" are set by the customer, at whatever level they think fair.
- The publisher can nudge the customer to pay generously -- just how to do that nudging most effectively is something to be tested and refined.
- The recurring payment model not only adds predictable revenue, but builds a relationship that increases loyalty and fosters communal norms.
- These voluntary payments in a relationship context provide a rich field for learning, for each reader, what "readers care about and are more inclined to support with their wallets" and "testing everything about the way [the publisher] solicits contributions."
- the value each reader obtains (and perceives), and how that varies over time
- how to maximize that value over time,
- how to get the reader to recognize that value, and
- how to nudge the reader to pay increasingly generously, at a level that fairly maps to that value.
- So far in the above, all payments are entirely voluntary -- but with some level of nudging. That could be the permanent strategy.
- But, as a possible further step to increase revenue, some level of services could be offered with a clear expectation of fairness in the voluntary payments from the reader. After some cycles of nudging as to what value is offered and what pricing is considered fair for that reader, future offers of that kind may be withdrawn (for some period) if the publisher concludes the reader just will not be fair about their payments. This is still much more participatory than conventional pricing, in that the reader still decides (on each payment cycle) what is a fair price for them and the value they received. The publisher gets to enforce reader generosity for selected services -- at whatever customized level of gentleness or firmness seems best.
- Patron-izing Journalism -- Beyond Paywalls, Meters, and Membership
- The Missing Piece of the Membership Puzzle -- Agreeing on Value for Each Member
In evaluating and testing such strategies, keep in mind that the results will be highly dependent on the "framing" -- specific design of the offers, the skill in communicating them effectively, and the selection of which services and which reader segments to apply them to. Disappointing results may not accurately reflect the potential of such methods in general, but could just mean the test was not done in the best way possible (or that your business has far to go in getting your customers to feel you deserve their support).
There is a great deal of marketing communications, pricing theory, value proposition design, and behavioral economics to getting this right. The details may seem complex, but the basic principle is simple -- build a win-win relationship of dialog, trust, and transparency, jointly seeking to create and share value with the each customer, in ways suited to that customer.
Even better, read my highly praised book: FairPay: Adaptively Win-Win Customer Relationships.