Washington Post Flex Payments Are Interesting Middle Ground
Over the years, AMO has taken a firm stance as being anti-microtransactions. In 2020, in an in-depth piece about why microtransactions don’t work, I said:
I’ll end on one final point… I can get behind subscriptions, ads, ecommerce, or whatever other monetization tactic you want to try. But please, can we agree this is the last time I write about microtransactions? Theoretically, a really cool idea, but in practice, just a horrible user experience. Unless the internet fundamentally changes, I don’t see that changing.
Fast forward to today and the opinion hasn’t much changed for the same reasons. First, the economics aren’t great since credit card processing fees take up a vast majority of the per-article fee. Second, any platform that handles it for you—Axate, as an example, or a web browser if we are lucky—owns the credit card relationship with the reader. And third, there’s psychological friction where the reader needs to make a value judgment every time they want to read an article. “Is this really worth $0.50?” a reader might ask.
But as more publishers strive to figure out ways to get more people paying for content, it behooves publishers to experiment with different tactics. Take the Washington Post, for example. According to a memo that CEO Will Lewis sent to the company:
Yesterday, we launched the very first test of our flexible payments product, giving readers the ability to access The Post on their terms. This means we no longer have only one way to pay for The Post and this first test offers the option of paying for access to our content for seven full days. Providing new ways to enjoy and pay for our journalism is an important step toward giving readers control, flexibility and value.
Nieman Lab found a couple of these in the wild at $4 and $7 per week. I found one where the weekly cost was $10, which is 2.5x the cost of a monthly subscription.
I’m unsure if anyone’s going to convert at $10, but it’s obvious that WaPo is testing how the audience reacts to various pricing to determine what gets the majority of users to pay.
The Washington Post is attempting to accomplish two things. First, it’s meant to speak to a reader that is afraid of either forgetting to cancel a subscription or believing that it’s difficult to cancel. You get charged once, you’re good to go. Second, it shows that the weekly payment is much more expensive than the monthly, so if a reader can overcome that fear, they get a lot more from The Washington Post by getting a subscription.
In both cases, this is decoy pricing. The judge of this CTA’s success will be how many incremental monthly and yearly subscribers it drives because it anchors the price of a week at $10. And so, the user realizes that if they were thinking of paying for the content, there’s no reason to choose that over the subscription.
But one test I’d like to see is a true discount on the one week price. For example, it could be $2 for one week or $1 per week for a monthly subscription. Does this get more people to pay the $2 because there is no renewal? While this might not help the subscription business, it could accomplish the goal of getting more users to give over their credit card. And that could have long-term upside.
Consider the friction associated with a subscription. You’ve got to give your email, buyer information, your credit card, etc. Each of those steps is another chance for the user to bounce. What if you already had the user’s credit card? Getting them to upgrade becomes a one-click conversion.
Imagine a user comes to the website and visits one article. Maybe you put a registration wall in front of them for the first time so that they now have an account. This bypasses a major friction point for future conversions. A week later, they land on an article and see the above offer, but instead of $10 for the week, it’s $2. For half the cost of a monthly subscription, they get a week’s worth of content. Now you’ve got their credit card and their email.
During that week, you can track what content they’re engaging with. You could email them more stories that fit within their consumption behavior. Habit is one of the biggest drivers of subscription growth, so this is your chance to really get the user hooked on the content. After that week, you can keep emailing them more content that they might pay weekly for or send them a marketing email that tries to get them to convert to a subscription.
This time, there’s no friction. One click and they’re now paying. This is where I see the real value in this flexible payment world. It’s less about generating $2 or $4 per user per week. Instead, it’s about getting the user comfortable with paying so that when they see a subscription offer, they feel ready to convert. There’s nothing that gets in their way.
To be fair, we could extend this thinking all the way to true microtransactions. Have the user pay for a single $0.50 article. Sure, the publisher won’t make any money. However, the publisher now has that user’s credit card. The user can now be marketed to repeatedly to upgrade to a weekly, monthly, or annual subscription offering. However, this only works if the publisher owns the microtransactions rather than using a 3rd-party.
I’m not bullish on the long-term future of microtransactions, in big part because of the friction associated with it. But if it can act as a middle ground to lead to stronger subscription results, I’m all for it. These weekly flexible payments are an interesting way to accomplish that. We’ll have to wait and see how it works over the longer term.
