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Five things Jessica Lessin needs to keep in mind about paywalls as she launches The Information

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The past year has seen the launch and growth of some fascinating new media entities — both platforms and services — including Andrew Sullivan’s Daily Dish, Medium, the crowdfunded Matter project, Paul Carr’s NSFW Corp. and Holland’s De Correspondent, to name a few. And this week we saw another being born, with the launch of former Wall Street Journal correspondent Jessica Lessin’s technology and business news venture, which is called The Information.

One of the defining characteristics of Lessin’s new offering is a hard paywall: only subscribers who pay $39 per month or $399 per year get access to the service’s content — which is more than an introductory offer her former employer has for both digital and print access to the WSJ. In a short interview with Digiday, Lessin explained why she chose this model as opposed to a leaky paywall (like the one at the New York Times) or an ad-supported model.

“I really don’t think the ad business model is aligned with our mission. Any publication that makes a meaningful amount of money through advertising ends up writing stories that generate a lot of traffic to generate a lot of ad dollars. Publications wrestle with that editorial decision. The bar for each of our articles is ‘is this worth paying for?'”

Paywalls are harder when you are new


It’s possible that The Information may be able to make a hard paywall work where others haven’t, in part because financial information is seen as having a built-in value for business consumers, many of whom write off the expense of subscribing to such services — hence the success of paywalls at the Wall Street Journal, the Financial Times, Bloomberg, etc.

But it’s also arguably the case that a subscription model is more difficult to engineer with a brand-new venture than one with an existing brand name, as we have seen with the failure of hard (and even somewhat leaky) paywalls at both Matter and NSFW Corp. And despite the pedigree of Lessin and colleagues such as former Wall Street Journal writer Amir Efrati, the site is still a new thing for consumers to have to wrap their heads around.

In that vein, here are a few things that I think Lessin and her colleagues need to keep in mind as they think about where The Information goes from here:

Paywalls make it difficult to reach new readers: One thing that both Paul Carr of NSFW and Bobbie Johnson of Matter have mentioned in talking about the failure of their paywalls was how difficult it was to expand their reach, even with “subscriber unlocks” that provided free access. That’s especially hard for a new venture with an unproven track record.

Being part of the flow of the web is important: Another point Johnson in particular made about Matter was that having a hard paywall and a slow publishing schedule made it more difficult to be part of the “rhythms of the web,” and also made it less likely that other publications would link to Matter’s content, which also goes to the idea of reach.

Paywalls require a lot of effort to add value: If there’s one thing that becomes clear from watching Andrew Sullivan’s experience with The Daily Dish, it’s how much work he and his team put in to providing enough value to justify the cost of their content, with dozens of posts every day — and they are charging a lot less than The Information.

A strong community is the best paywall: Another lesson from Sullivan’s approach, as well as from other small publishers such as Techdirt and Talking Points Memo, is that engaging with the community that makes up your subscriber base is crucial — whether it’s responding to questions, offering special features to paying readers or all of the above.

In the end, good content may not be enough: NSFW Corp. had a lot of detractors for a variety of reasons, but it’s difficult to argue that its content wasn’t consistently of fairly high quality, and the same goes for Matter — and yet neither could command enough subscribers to make the math work. Good content should be enough, but in some cases it isn’t.

Just to be clear, I’m not saying that The Information is doomed or is a bad idea. I’m glad to see people experimenting with new models, and it’s fascinating to see journalists like Lessin taking advantage of the shifting balance of power in media to strike out on their own. And while I am on record as not liking paywalls, personal paywalls are the ones I like the best.

Post and thumbnail photos courtesy of Shutterstock / Voronin76 and Flickr user Giuseppe Bognanni

11 Responses to “Five things Jessica Lessin needs to keep in mind about paywalls as she launches The Information”

  1. Grahame Lynch

    I have published CommsDay, a $1000 a year subscription newsletter for telcos in Australia since 1993. There is an extensive body of experience in this business model and the idea behind what the Information is not new. But it ignores the no 1 most valuable lesson everyone in the paid subs game knows – you absolutely have to let people trial your product before getting money off them. The website I see demands $399 on the trust that a team of reporters with OK resumes will send me a product that justifies the expense. You absolutely need to earn trust before asking the money. I pointed this out to Kara Swisher who was promoting them on Twitter and I was dismissed as a naysayer with no idea. Funny, with a list of sample headlines and articles I would have given $399 then and there but not into an “information vacuum”. Us Antipodeans look at you US new media types sometimes and really do wonder! :-)

  2. I subscribed immediately. Then I read a few articles. The writing was poor, which makes sense given the youth and relative inexperience of the writers. There was nothing new or interesting to increase the value above any other article, and I’m very skeptical that the writers can get scoops. Not that scoops really matter that much, anyway.

    I unsubscribed a few minutes after I subscribed. I’m going to stick to writers I already know are good.

  3. I want this to work, but I’m not understanding why it will. There is so much “inside baseball” here in the Valley that people think we all are craving yet another news source that “gets it right”. But this group will be small. It will be competing with the excellent work done at AllThingsD and GigaOm and the occasionally good stuff you find at Cnet, Forbes, et al. Never mind the fact that most of us pay for WSJ, which has an army of people behind it.

    By charging so much, they set the bar low. At 10,000 subscribers, “The Information” probably works. But what makes it a “must buy”? With such a small team and no ability to share content in a meaningful way, it seems awfully challenging.

    And while the stories posted so far look interesting, are any an absolute must read?

  4. Tom Foremski

    She’s right about the ad model being unworkable for a serious publication. I’m not sure subscription is the best solution. I think possibly a sponsored model where key brands get behind a serious publication because they want to promote serious journalism could be a way forward for news organizations.

    News wants to be free and every journalist wants their stories read as widely as possible rather than locked away. Companies should get behind serious journalism as a social good.

  5. Heather Leigh

    I think a lot of people underestimate the value of a financial news service that doesn’t rely on ads for revenue. Theoretically, the financial autonomy will grant The Information’s writing staff the ability to report with complete impartiality, and unvarnished insights could prove invaluable to their target audience. It’s really just a matter of whether enough people recognize that value. As an ex-journo who saw stories killed because they might result in ads being pulled, I am rooting for Lessin et al!

  6. Craig Silverman

    A suggestion for #6: Paywalls/premium content subscriptions have a better chance for success when your service can be justified as a business expense.

    In that respect, The Information is smart to target “professionals in technology and in industries being upended by it”.

    But I wonder if that’s actually too broad an audience. If I go to their site and see a vertical dedicated to my specific industry, then I’m more likely to take the plunge, and less likely to have my expense claim questioned by my finance dept. I don’t see that yet, but it’s very early.

    I’d suggest they apply a deeper level of focus, or evolve to declare which industries they view as the ones being upended. To a certain extent, what you don’t cover is a just as important as what you do when it comes to getting people to pay. Hey, maybe that’s #7!

    • Mathew Ingram

      That’s a great point, Craig. Focus is definitely one of the keys to making your value proposition obvious to paying customers. Maybe tech/biz is too broad — I guess we will see. Thanks for the comment.

  7. Nick Kellet

    I was impressed and shocked they launched directly into a paywall, but flipping later doesn’t work either.

    That sure is a test of their brand and connections.

    I thought she should allow a pay per post model too, to let people test.

    Getting people to make that first payment is hard.

    Getting people to part with cash it hard and no matter how good the content is and there’s plenty of good content elsewhere for free.

    I wish her and the team well. You make some good points.