Q&A: Tomáš Bella has ambitious plans for a one-stop paywall future

As the 50th member of Journalism.co.uk's inaugural j-list of innovators in journalism and digital media, what is Tomáš Bella doing that earned your votes?

Bella was editor-in-chief and deputy director of newspaper website sme.sk in Slovakia from 2007 until earlier this year, and was behind the country's popular blog portal and Digg-like service vybrali.sme.sk, which since its launch in 2006 has linked out to the competitors' sites from its homepage.

But now as the co-founder of Prague-based new media consulting company NextBig, Bella is taking on paywalls and paid content with plans for a new system for newspapers: Piano. The new system, which will begin trials in central Europe from January 2011, is focused on the experience of the user and will borrow design attributes and ideas from other paid services online.

Piano Media, which already has a holding page, will be the new company for the project formed by NextBig and Etarget, a central European PPC advertising company.

"Usually, most of the media are just waiting for Americans or Brits to show the way on the web and prove what works and what does not. But in the case of paid content, it might not happen because it would be probably much more risky to launch system like our at English-speaking market, where every news source has hundreds of free alternatives, compared to countries like Slovakia with only 5.5 million people or Czech republic with 10 million (and comparably small number of news portals)," explains Bella, who expects a full launch in March 2011.

"However, if the concept is proven to be successful in these countries, I think bigger markets can follow since we will already have the critical data on how do readers react, how much revenue can be expected and which of the dozens of various services and content types work best in such a system."

Under the new system, paying for access will give readers content and perks beyond financial news or specialist subjects including: comments on articles; exclusive access to articles from the newspaper the evening before they are published in print; forums with experts; and ad services.

So does Piano hold the key for newspapers looking to charge online or will it be just another one of a string of experiments for news publishers? Journalism.co.uk asked Bella to tell us more:

J.co.uk: How will Piano work?
Bella: We think that readers are willing to pay for the content online - but the user experience in most of the models tried so far has been so terrible that the readers simply could not be bothered to pay.

For example, we think the newspapers on the web could learn a bit from cable companies about pricing and bundling of content - if you were asked for a penny every time you wanted to watch a programme, you would watch much less TV (we think micropayments will not work on the web). But even if you were asked in advanced which channels you want to watch next month, you would undoubtedly choose much less programmes that you currently have - that is why even monthly subscriptions to individual websites are not good enough and easy enough from the users' perspective to generate significant revenues for most of the media. That is why our solution is to hide all the complexity from the user: "I pay only once and let the media sort it out, out of my sight, what share of my money each of them gets".

Also, we can learn from services like Apple's iTunes - it arrived during seemingly hopeless times, when the general mood was that nobody was ever going to pay for music online. But by combining better user experience and much more transparent and simple pricing Apple proved the theory that "customers will not pay for the content that they already got for free" to be wrong.

We believe that one flat, "all inclusive" price can be so attractive for the readers that it will help remove much of the mental barriers to paying for online content.

And the last key component: we want as many people as possible to pay by other means then via internet. For example we are making deals with internet providers so that even if reader comes across the paywall at the newspaper website at first, he is presented with option not to pay directly by his credit card, but to include the charge for the content on his internet bill (so it becomes a much more stable revenue stream).

How will the system work for readers?
Now, from the reader's perspective, it will work like this:
1. The reader visits his favourite newspaper site (site A). If he chooses the content that is paid, he is asked to pay €2,90 for 30 days' access.
2. There is a narrow ribbon above every participating site (something like the "TimesPeople" ribbon above nytimes.com site) that changes colour depending on whether you are visiting free or paid part of the site. It also tells you whether you are logged in or not and how many more days are remaining in your subscription.
3. If the reader, after paying at site A, visits any other website B that is using the system, he is not asked for any payment or even password any more - only the ribbon informs him that he has entered a paid zone, but he is automatically logged in and allowed the access to all the content.
4. Site A gets 40 per cent of the 2,90 € that the reader paid. The rest is divided between all the participating sites (including also site A again), depending on how much time that particular reader spent on each site. 

For readers, the main benefit is that only one payment and one login per month is required for access to all the paid content in that country.

What are the benefits for publishers?
For publishers there is plenty of content or services that have some value, but the value is not so great that readers would be willing to pay only for this content alone. Piano allows such content to bring direct revenue from readers by bundling many services and content together.

There is almost no cost for joining for the media, we do not ask for any entry fees and media groups only have to connect their CMS to our API. We will pay for all the development of the system, we make all the deals with the banks, internet providers, and so we greatly lower the cost of the media if they want to begin asking readers for payments.

We think that there is almost no risk for publishers - if the medium is not happy with the revenue, they can easily leave the system. But more importantly, we are advising the media not to include its biggest traffic generators in the system, but rather content used by most active readers.

In this system revenue is shared based on time spent on their sites - suddenly, producing expensive content such as infographics or video makes much more sense for many of them compared to when they were just selling banner ads around such a content.

Do you think media groups are willing to work together in this way?
The first reactions were much more positive than we expected - basically all of the major media companies in Slovakia said they were willing to participate. This does not mean in reality that all of them will finally sign the contract with us, but the outlook seems quite positive at the moment. In the Czech Republic the situation looks quite similar, although the online-only media, with no print operations are stronger there, so we will probably be able to cover a smaller, although still significant, part of the market.

If all goes well, we will probably be thinking about Hungary or another central European country after these two and then either south eastern Europe or countries where the owners of major central European media have headquarters, for example Switzerland, Germany or Austria. But, of course, these plans can easily change depending on which media from other countries will approach us and how enthusiastic about Piano they will be.

Do you see charging for all content or just parts of news websites as the future model?
We will start with charging for the content and features that have the most loyal users. When the system catches on, we think it will be spreading quickly to more and more content and the percentage of content on each site that is paid will be rising.

Mainly, we think that most of the new services and sections that will be launched in the future will be paid from the beginning. We already heard from some of the media that Piano will finally allow them to start working on projects that they always wanted to launch, but until now, did not make financial sense. So we have big hopes that Piano will actually boost the development of many new projects on the web.

We know that at the beginning, almost no media here are willing to bet their companies and put all the content behind the paywall, taking the risk that if their system fails, they will end up without online readers and online revenues. Rupert Murdoch may have been able to take this risk, because he wanted to communicate his ideas on what the world should look like, not because he was the first to have worked out the perfect system.

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