The name of the publication and / or company
Form of the company
Describe your site or business in few words.
Piano media is an online subscription-based content payment model. Its initial project is in Slovakia where nine publishers, newspapers, TV and multimedia, agreed to put some of their online content behind a joint subscription model in May 2011. Since then traffic to the sites has remained stable. Piano Media charge 2.90 euros for a monthly subscription to the content services. They manage traffic data, advise publishers about what to put behind the subscription, and track useability and manage the income generation. It is a cable-tv style bundling model where one fee is taken on behalf of many publishers. They are planning to extend out of Slovakia to other countries or other bundles of content, working with ISP providers and stores.
Who’s creating the content
How is your time divided between doing business and content?
“Most of our time is spent developing the business which means travelling promoting it and talking to publishers and around half is with the publishers tracking their data and monitoring subscriptions and user behaviour.”
Business, marketing & sales, paid full-time
How they make money
Revenue models and sustainability
Would you say your business model is sustainable?
We did studies to look at usability of payment methods as it has to be as easy as possible and the amount that people are willing to pay. The pricing by cost is not very good business. We wanted spontaneous buying so make it as cheap as possible and go for the mass. We compared it to what people buy daily, a drink in a bar and a cup of coffee. It is low enough that people even pay for access to the free stuff for the peace of mind that they can be spontaneous or some people just pay by mistake. They also understand that our goal is not to rip people off but that you need to pay for good journalism to survive online. It has proven to us that people are not against paying for content just against messing around with lots of different payments to different people. One of our co-founders had tried a paywall and it was a disaster when he was CEO a disaster.
‘Cable tv uses a bundle. They are more and more mature in this field as there are more complex bundling options available but the basic idea is the same. This is cable tv for publishing. One payment and everything is much more easy on the customer.'”
How much is your yearly or monthly revenue?
Enough for ten full time staff and 300,000 euros investment, plus 30% revenue on 2.90 euros per subscriber (with 40,000 subscribers in the first month).
Where does your revenue go?
Wages, technology, travelling, operations – no marketing yet. We wanted to see organically how it evolves first and really pay attention to the interesting data.
How much do you pay to your contributors?
“The model currently works on a 70:30 share, where publishers in the model take 70% and Piano Media taking 30% à la Apple. What is interesting, though, is the breakdown of the other 70%. Publishers get 40% of the revenues if the subscription is made on their site. But the remaining 30% is divided on time spent on the sites and services, thus incentivizing the publishers to keep hot on the competition between one another. Users who spend longer on long form articles and quality content will generate more money for the publisher. We are looking at reducing our 30% but increasing the share given to publishers on the time spent element, to incentivize them even further.”
What about profit?
“We think this model can work in many countries as cable tv does. It can work anywhere. It will be difficult in some countries like in the US as there are companies that have their own cash and can be independent but we are looking at 20 markets and launching a new one early next year. Slovakia one of the worst countries to launch as the willingness to pay is so low and internet penetration is low and paying online e-commerce is not that developed. An entry point is bundling when you pay for your ISP broadband providers and starting to do that in other countries. How to sell this to customers without them just hitting the wall – there are others. We are also selling through the book store and that works well so there are plenty of channels so we have to learn a bit more about this. Bundling the subscription with other services is definitely an important way forward.”
What is the main revenue stream?
Membership or subscription fees (Continuity Programs) and donations.
Do you see your publication as your main product?
“The infrastructure is the main product, which allows publishers to create their unique services. We have realized that publishers have to realise they are offering services not just content. We have 40 services from different publishes. People are not prepared to pay for breaking news, it is not exclusive the fact that it is happening is available everywhere, everyone has it. But long form people are willing to read and pay for opinion pieces from certain publishers or for in depth. Video and reading news, or tomorrow’s newspaper today. Some publishers are offering editions of the whole paper. Some have closed off comments unless you pay: some platforms are heavy on discussions and passionate about that and good quality so people are willing to pay for – even celebrities go on – and publishers perceive it as a way of cleaning up the discussions. You would have to pay two and three times if you wanted different accounts to use as spam. It is very important that the publisher understands their users and their content just uploading is not an option. That is why we call them services. Each of the publishers has the freedom to offer services that no one else has.
Customisation and video are key – you have to go above and beyond which is why we have services not products. It has to be exclusive and what you can’t get elsewhere. What we are learning from this every day so each publishers can do bespoke for each and it can be very different from what your competitor to do. So we have to give feedback to everyone individually. So we are bundling for the customer for a bespoke service but bespoke to the publisher too.”
What would be the most important thing on your road to sustainability?
“We have data on the number of subscribers but we are not releasing this yet, we are going to discuss this with the publishers at the end of the first year. Interesting dynamic a lot of people are watching this and the media will guess the revenue from the number of subscribers and there have been new services added but they are afraid of putting people off. It is a sensitive moment for the industry not really us. We are working with ISP providers, stores and other bundling services which will be key.”