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Political news site Politico will begin testing a metered paywall this week, the company announced Thursday — but readers in the site’s core region, Washington, D.C., won’t feel the pain. Instead, Politico is testing the paywall in Iowa, North Dakota, Vermont, Mississippi, New Mexico and Wyoming, as well as internationally. Coincidentally, the company has also started experimenting with sponsored content on its homepage.
In a memo to staff that was also posted on Politico’s website, the site’s editors explain, “We chose smaller states, spread across the country, so our experiment captures any regional trends and also limits any potential loss of traffic to the site. This will last at least six months, so we have a large enough sample to appraise the results.” They’ll experiment with different price points and with the number of stories that a reader can access for free before the meter kicks in. (I’ve asked Politico about the range of prices and will update the post when I hear back.)
The memo also explains why Washington, D.C. is exempt from a paywall:
“Unlike other media companies, we often sell out our ad inventory in the Washington, D.C., market because demand for our ad space is so high. This means it’s highly unlikely we would ever institute a metered system in the D.C. area. The economics wouldn’t work because every company that has put a subscription system in place has seen some decrease in traffic, as you might expect. We want and need that traffic in D.C. because the desire of advertisers to reach our elite audience here is exceptionally strong. For you non-business folks, that is a very good problem to face.”
The editors acknowledge that it’s unclear whether “the metered system, while dominant today, is the best model for subscriptions in the long run.” But they say it’s “increasingly clear that readers are more willing than we once thought to pay for content they value and enjoy.”
In addition to advertising revenue and the paywall, Politico has a revenue stream coming from its professional product, Politico Pro. Over 1,000 organizations are now subscribing to Pro, the company announced in March, with a yearly subscription starting in the thousands of dollars.