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David Brauchli

A paywall to make Murdoch blush

Paywalls, partial subscriptions, bundled packages, freemium models … publishers from the US to Australia are scrambling to find a magic formula for monetising content online, but so far almost all have struggled.

But what happens when there is no alternative?

Earlier this year, nine of Slovakia’s major news organisations – including a TV station, three broadsheet newspapers, one tabloid and two magazines – grouped together to charge a single subscription fee for access to their content.

Dubbed “the new iron curtain”, the nation-wide paywall uses a nascent technology called Piano, where for a monthly payment of €2.90 (HK$32) or €29 (HK$320) for a year, subscribers can access premium content from Slovakia’s biggest websites.
Piano Media, the company behind the unique project, has kept its system simple. A subscriber has to log in only once for access to any site on the Piano network.

The company handles all billing, software and support for a 30% cut of subscription revenues with the remaining money split among members based on time users spend on their sites – and time is the measurement, not page views.

Publishers control what content goes behind the curtain, and they can offer special benefits for paying members.

The idea seems to have been well received. A June 17 press release from Piano Media showed it took €40,000 (HK$444,000) in its first month of operation, with subscriber targets achieved within two days of launching.

“People quickly understood the concept of cable TV-like subscription and it seems, at €2.90, we got the price right as well,” says Piano Media founder Tomáš Bella.

Bella says a second wave of publishers based in Bratislava are expected to join the project soon and Piano is exploring expansion to other European countries by the end of the year.

But some remain sceptical such a system will be embraced across Europe.
Daniel Zivica, chief executive officer at MEC Slovakia, says while a few Czech media owners are likely to join, it’s unlikely Piano will set a new standard across the region. Others echo similar sentiments.

“Unless Piano proves itself to be the real case, I am rather sceptical,” says Jan Havelka, CEO of GroupM Slovakia.

Havelka argues Piano must be more aggressive in its content strategy to pull larger subscriber numbers. Slovakia has just over four million internet users in a population of 5.7 million. Its online advertising model is evolving fast, with online ad spending taking 8% to 10% of total media expenditure.

So far the Piano paywall has not affected big advertisers and Havelka says Piano is still mostly perceived as an interesting project.

Should the project succeed or fail, many will be watching closely to see if such a system can work elsewhere and, of course, how Slovakia’s free sites perform in this new environment.

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