Organisations have been distributing digital content, to consumers for a long time and yet for many the issue of how you best monetise that content refuses to go away. In the beginning many content producers believed that external sources such as advertising would provide the revenues and the content itself could be free. For some content providers (publications like The Guardian for example) this has worked but for others the solution had to be finding a way to get consumers to pay for the content. Other leading publications including The New York Times and Financial Times have made the call to go for a subscription based model in order to be able to monetise that content rather than rely on dwindling ad revenues. But the issues of digital content monetisation has become even more complex due to increasing digital diversity, the channelling of customer access through third-party stores like the App Store and the increased willingness of consumer to share passwords with friends and family in order to bypass paywalls.
The debate about paywalls continues to rage with many in the media industry fearful that asking consumers to pay for online content will drive them away - after all there is so much available online for free. If you put all your content behind a paywall how do consumers know that it is worth paying for? This is particularly vexing since content requires investment to produce and in an age of digital diversity, with today's consumers accessing content via numerous different devices from mobile phones to tablets and laptops, each with varying operating systems, different screen sizes and each connected via networks of varying speed, the cost of creating content to serve this digital diversity becomes even greater. In consequence, the challenge of setting limits as to what people can access, how often and at what price becomes very tricky.
If subscriptions are bought indirectly via a 3rd party, it's not easy for media companies to ensure that they are always aware of the status of those subscriptions.
Even small adjustments to your digital delivery strategy can have significant results. Just recently, the Sun.co.uk relaxed its paywall and saw traffic jump 62%. But a tweak in the wrong direction can have the opposite result. The Toronto Star recently abandoned its paywall strategy all together and went back to free access to content. And meeting this challenge of digital diversity is only going to become difficult as the Internet of Things develops with consumers potentially access content through many different devices from TVs to cars, to watches, to fridge displays and digital paper.
Third Party subscriptions
To compound the complexity presented by digital diversity, it is also necessary to account for the fact that consumers are purchasing media subscriptions in a number of different ways. Some come to the media company directly. Increasingly however they can purchase content subscriptions via Apple's App Store, or Google Play. If a subscription is bought indirectly via a third party, it is very difficult for the media company to ensure that they are always aware of the status of that subscription.
The limitations posed by the Application Programming Interface (APIs) presented by the 3rd party channel are limited in the data they provide. For example, many online newspapers are challenged to accurately understand when a customer has cancelled their subscription if they originally purchased it via a third party. They rely on the third party telling them that the subscription has been cancelled and if this doesn't happen the customer is still able to access their subscription even though they are no longer paying for it.
Some digital content providers operate subscription models whereby the consumer has access to an unlimited amount of content, across a limited number of devices, for example music or film streaming services. For these providers, password sharing is a big concern as they are unable to tell if there is more than one individual accessing their content. For example, in the OTT video services, password sharing will cost service providers more than $500 million in 2015.
Flexibility on tap; identity-based permissions
So what can digital content providers do to ensure they are adopting the best content monetization strategy and not losing revenue? One common method is the use of location-based permissions technology combined with simple logon credentials and cookie tracking but this falls down in situations where the customer is a regular traveller, using a VPN or looking to avoid a paywall.
Once you know who your customers are you can start to collect data on them and their preferences. You are not only in a position to develop new products and services, you can also effectively cross-sell existing ones.
An emerging, more flexible approach is the use of is identity-based permissions management where the user of an online service accesses cloud and corporate applications using a single identity. This provides media companies the ability to offer their subscribers a single point of access with which they are able to access a variety of online content using the same credentials. This identity can be cross-references against a content package a user has licensed to allow them to access the content they've subscribed for (and not the content they haven't). And critically, identity-based permissions allows content packages to be tailored to the user - it is no longer a case of one-paywall fits all.
Identity-baser permissions has also become more crucial since popular online services such as Google ID or Facebook Login have changed expectations regarding the ease with which a subscriber now expects to be able to access multiple pieces of content - anything more than a single set of credentials (usually email + password) and the subscriber will likely click away.
More effective targeting
Accurately identifying who your customer is can also provide the foundation for a far more effective sales strategy. Once you know who someone is you can start to collect data on them and their preferences. And with that knowledge comes the ability to offer much more granular and targeted subscription packages to suit a customers' needs. It also provides you with information that can fuel your product and service development. If, for example, you know that a sizeable element of your customer base is consuming a lot of sports focused content then you might want to consider investing in new services that can bring them closer to the sports they love; membership only online communities with the opportunity to engage direct with players and pundits, exclusive access to interviews or cut price tickets for events.
Identity-based permissions management therefore is about more than just making sure that subscribers are paying what they should be it also enables what marketers would call a 'single view' of the customer. If you know and understand who your customer is you are not only in a position to develop new products and services, you can also effectively cross-sell existing ones. For example, a media publication may hold several conferences each year - if that publication understands the particular interests of its readership at an individual level, it then has the opportunity to target those specific readers with very targeted offers.
Currently many digital content businesses including newspapers, magazines, music and film streaming providers do not have the systems in place to be able to effectively manage customer permissions. The challenge of digital diversity, 3rd party channels and emerging content hacks such as password sharing makes this capability a necessity for any content publisher. The alternative is giving a significant amount of content away for free unintentionally. Digital content providers should look to identity-based permissions technology not only to help them ensure that their customers only get what they have paid for but also to provide a platform on which to build valuable insights on who their customers are and what they want.