The document discusses alternative solutions to paywalls for content publishers, including Znak it!, a proposed micropayment platform. Some key points:
- Paywalls can be expensive to implement and maintain, create barriers between publishers and readers, and see low conversion rates.
- Znak it! proposes to use micropayments (called "Znaks") as an alternative, allowing readers to pay small amounts for individual articles or content.
- The platform claims benefits for publishers, advertisers, and readers by providing multiple payment options, sponsored access, and analytics on user behavior.
- Early pilots showed over 8% conversion rates from visits to purchases, higher for younger demographics and varying by
1. by Znak, Inc.
Paywall or Not To Paywall:
Alternative Solutions
Revenue Trends, Warsaw April 2012
All presented here materials, ideas and business concepts are confidential. They are the property of Znak, Inc.,
a Delaware corporation; and, they cannot be used, copied, distributed nor shared in any form and means
(the appropriate US and international laws apply). Znak it! Is a registered trademarks owned by Znak, Inc. The
Znak it! business idea and a micropayment solution are protected by the USA and international patent laws – New
US Provisional Application No. 61/046,623
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2. A Technology Solution for Publishers
Payment Technologies do NOT Sell Content
But They Can Help Publishers and Their Users Make
Payment Transactions Easy & Fair
Copyright (C) 2009 by Znak, Inc. 2
3. $240 Billion Loss in Ad Revenues since
2001 Peak
30%
1950 cut
Copyright (C) 2009 by Znak, Inc. 3
4. 2011 The Rise of the Paywall?
“The metered wall is the coolest thing since
the beginning of the WWW.”
Steve Brill
“The NYT paywall is working…
…it’s a dream.”
Felix Salomon
Copyright (C) 2009 by Znak, Inc. 4
5. 2012 – Paywalls Revisited
The NY Times Paywall is
Stupid… Really Dumb
Greg Satell
“’a cartel of news’…
’walled gardens’…”
Clay Shirky
Copyright (C) 2009 by Znak, Inc. 5
6. Lessons Learned
Paywalls can be:
Expensive to start; It took the NYT two years
technologically challenging; and $25 to $45 Million to
costly to run/market. launch its „metered wall;‟
Bloomberg, paidContent
Additional $13 Million to
promote it in 2011 alone;
New York Times
Given the 390,000 new
subscribers at the end of
2011 -- $97 to $148 to
acquire one subscription
Loss of traffic and ad
revenue
Copyright (C) 2009 by Znak, Inc. 6
7. Lessons Learned
Paywalls can be:
Expensive to start; Before paywall the NYT
technologically challenging; traffic was about 39 - 41
costly to run Million uniques per month
(US traffic only);
Require large scale;
conversion rates slow down & Down 20% in Dec 2011;
plateau; „silo effect;‟
With 390,000 subscribers
– 1% visitors signed up;
Subs growth slowed from
124% Q1 to 20% in Q4
Copyright (C) 2009 by Znak, Inc. 7
8. Lessons Learned
Paywalls can be:
Long-term commitment
Expensive to start; with up-front payment and
technologically challenging; low 34% renewal rate,
costly to run compared to 55% (print);
Magazine & Newspapers Circulation Institute
Require large scale;
conversion rates slow down & Substantial cost if multiple
plateau; „silo effect;‟ sources/subs desired;
„Walls,‟ after all – barriers to Registration (ID/PIN/cc
readers‟ access & engagement info) – can be lost/stolen;
50% apps have problems
recognizing sub ID/plans;
Copyright (C) 2009 by Znak, Inc. 8
9. Lessons Learned
Paywalls can be:
One-way „engagement‟;
Expensive to start;
technologically challenging;
costly to run You pay, we deliver what
WE want, incl. “free” or
undesired content;
Require large scale;
conversion rates slow down &
plateau; „silo effect;‟ Only 20% of subscribers
download content;
Magazine & Newspapers Circulation Institute
„Walls,‟ after all – barriers to
readers‟ access & engagement Reliance on (exploitation
of?) the most loyal (local)
Media/publisher-centric readers; passers-by a
second category?
Copyright (C) 2009 by Znak, Inc. 9
12. What is it? For whom?
Znak it! – an integrated premium
content curation and monetization
Content Providers platform
Znak it! – a frictionless, safe and
private way to access premium
content as-you-go Web Users
Znak it! – a direct-to-user
Marketers & promotion channel and market
Advertisers research tool
Copyright (C) 2009 by Znak, Inc. 12
13. A Win-Win-and-Win Solution
Web users can buy Znaks
(credits), using credit cards,
PayPal, bank transfer, etc.
Or, they can earn Znaks
through Marketers‟
ECOSYSTEM sponsorship.
Marketers – the
Third Winner
“Free” or ad-sponsored
Znaks earned in exchange
for a clickthrough (CTR) or
an action (CTA), e.g.
1 Znak = $0.01 or an answer to a mini-
equivalent in other currencies survey/market poll.
Copyright (C) 2009 by Znak, Inc. 13
14. Business Model Options & Benefits
Paywalls vs. Paygates such as Znak it!
SaaS -- no set up and system maintenance
Expensive, low ROI; costs; up to 94% return;
Require large scale; Also for the “long tail;” truly World Wide;
divide users into
categories Technology- and portal-agnostic;
Flexible, a la carte, on-demand access;
Create „silo effect;‟
Supports different payment methods, incl.
Closed, rigid, might donations and ad-sponsored access;
cannibalize other
sources of revenue; User-centric, payment as social engagement,
content sharing & recommendations;
Media/publisher-centric , Private, intrinsically safe; can be used for
not engaging anonymous access – without registration;
frictionless
Copyright (C) 2009 by Znak, Inc. 14
15. Znak it! Market Niche
120%
Znak it! Payment Niche
Cost of Znak it! as compared to
100%
102.90% PayPal charges
Znak it!
Percentage Commission
80% PayPal
Regular
PayPal
Micropayments
60%
52.90%
40%
27.90%
20% 21.67%
17.90%
8.85%
6.00% 5.40%
3.90%
0%
$0.3 $0.6 $0.9 $1.2 $1.5 $1.8 $2.5 $5.0 $20.0
Transaction value
Copyright (C) 2009 by Znak, Inc. 15
16. An Example – Online Newspaper
Examples of Znak it! embeddable links
and widgets – as payment gateways.
Customizable shapes.
Easy, copy-and-paste insertion of Znak
it generated codes by Publishers.
For the User: two mouse clicks to get
access to and pay for selected content.
Payment authorization and fund
transfers done by the system in real
time, SSL-encrypted, safe.
Copyright (C) 2009 by Znak, Inc. 16
17. Publish on Third Party‟s sites
Examples of Provider‟s content
submitted to Znak it! Agenda for
additional distribution & monetization
Also, in soc nets Facebook or Twitter
Can be self-administered;
Access to Agenda via customizable
Admin Panel
Data mining and reports
Copyright (C) 2009 by Znak, Inc. 17
18. User Has a Choice
Alternative to pay;
User access to paid
content sponsored
through opt-it advertising
“Free” to User
Copyright (C) 2009 by Znak, Inc. 18
19. Ecosystem
Benefits to Content Providers
Marketer or Advertiser and
Users
In exchange for User‟s data
or action;
High CTR and competitive
CPC/CPA
Much higher conversion rate than
when using paywalls
Copyright (C) 2009 by Znak, Inc. 19
20. Frictionless Instant Access to Content
Two mouse-click access
and authorized payment;
No delays, no need to leave
content page or enter any
codes, PINs; no tracking
Copyright (C) 2009 by Znak, Inc. 20
21. Samples of Successful Application
In April 2011, we developed a new version – won the Florin Award
for the most innovative online transaction service
(EPCA, Amsterdam)
The current platform was launched
in August 2011 (public beta) – in the
first three months, 320 content
providers and 52,000 users have registered.
Now, we run several pilot projects with various content
publishers, incl.:
two regional news/magazine publishers
a photo sharing and media site, similar to Flicker
an online music service and soc net
global producer of video content: sports, fashion
& entertainment
Copyright (C) 2009 by Znak, Inc. 21
22. Pilot Cumulative Results
Based on the first month of each of the 5 pilots
(Nov 2011 – Jan 2012)
No of Content Price/piece in
Types of Content Supported
Pieces Znaks
Video clip (sports) 15 199
Music file (MP3 download) 90 99
Article bundled w/photos 60 49
Single article, free lead 30 39
Crossword puzzle 30 25
Photos 120 10
Total/average 345 52
1 Znak = $0.01
Copyright (C) 2009 by Znak, Inc. 22
23. Pilot Cumulative Results
Price/piece in
Type and No of Content Qualified Clicks Clicks/piece
Znaks
Video clip (sports) 15 199 678 18.0% 45
Music file (MP3 download) 90 99 1,297 34.4% 14
Article bundled w/photos 60 49 465 12.3% 8
Single article, free lead 30 39 397 10.5% 13
Crossword puzzle 30 25 169 4.5% 6
Photos 120 10 761 20.2% 6
Total/average 345 52 3,767 100% 11
„Qualified clicks‟ equals content purchases – 3,767 out of 43,299 visits, or 8.7%.
Assuming quality/user interest, etc., are all equal, music was most popular overall;
however, sport video clips generated the most clicks per unit.
Copyright (C) 2009 by Znak, Inc. 23
24. Pilot Cumulative Results
Revenue/
Price/piece Qualified Revenue
Type and No of Content piece
in Znaks Clicks in Znaks
in Znaks
Video clips (sports) 15 199 678 134,922 43.0% 8,995
Music file (MP3) 90 99 1,297 128,403 41.0% 1,427
Article bundled w/photos 60 49 465 22,785 7.3% 380
Single article, free lead 30 39 397 15,483 4.9% 516
Crossword puzzle 30 25 169 4,225 1.3% 141
Photos 120 10 761 7,610 2.4% 63
Total/average 345 52 3,767 313,428 100% 918
The average is $9.18 per piece of content; however, the revenues vary a lot between the
type of content with video clips generating nearly $90/piece
Copyright (C) 2009 by Znak, Inc. 24
25. Pilot Results, by Gender & Age
Based on a sample of 43 299 Unique Users
13.8%
24.2%
18 to 24
41.1% Males 16.5%
25 to34
35 to 44
58.9% Females 45 to 54
55+
22.4%
23.1%
The sample represents gender and age distribution typical for online
sites with high=quality news/magazine content, with a majority of
users being male and older.
Copyright (C) 2009 by Znak, Inc. 25 / 11
26. younger
When compared to the Buyers Population, the distribution shows a
considerable shift – younger users are more likely to be Buyers.
65.3%
58.9% Number of Unique Buyers – 1 281
41.1% 34.7%
29.0%
20.6% 21.0%
23.1% 16.5%
13.8% 16.5% 22.4% 12.9%
24.2%
Males
Females 18 - 24
25 - 34
35 - 44
45 - 54
55+
Unique Users Unique Buyers
Copyright (C) 2009 by Znak, Inc. 26 / 11
27. Revenue Per Transaction and Buyer
$2.79 $3.06
$2.45 $2.49
$2.36
$2.20
$2.18
$1.79
$0.83
$0.79 $0.92
$0.85 $1.00
$0.73
$0.75 $0.85
Total
Males
Females
18 - 24
25 - 34
35 - 44
45 - 54
55+
Revenue per Transaction Revenue per UB
Copyright (C) 2009 by Znak, Inc. 27 / 11
28. Conversion Rates by Gender and Age
Conversion rates 9 to over
15.6%
14.5% 15 times higher than those
generated by metered
10.3% paywalls (1%)
8.7%
6.4% 8.2%
6.3%
3.0% 5.2%
3.3% 4.4%
2.5% 3.3%
2.7%
2.2%
1.6%
Total
Males
Females 18 - 24
25 - 34
35 - 44
45 - 54
55+
Conversion Rate (Buyers/Uniques) Conversion Rate (Buys/Uniques)
Copyright (C) 2009 by Znak, Inc. 28 / 11
29. In Summary
Technology Can Make Payment Transactions Easy & Fair
Technology Can Help Publishers Generate Online Revenue
Open, On-Demand Payments – like Znak it! – Work Better
than Paywalls, esp. with Younger Users
Znak it! Shows about 9x Better Results than Paywalls
In Certain Age Groups Even 14 - 15x Better
SO,… ZNAK IT!
Copyright (C) 2009 by Znak, Inc. 29
30. 2012 The Year of the Dime & Nickel?
“As the economy sputters along, look for sites helping you sell
almost anything you can imagine and making you a “fortune”–
one micro payment at a time.”
Lance Ulanoff, Mashable
Copyright (C) 2009 by Znak, Inc. 30