Is the newsstand the future of online press in Central Europe?

Article  by  Karl DEMYTTENAERE  •  Published 30.04.2013  •  Updated 30.04.2013
[NEWS] A Slovakian start-up drew inspiration from satellite TV packages to offer an original model for online media content. Is this an example to look to?

Finding a reliable system to get Internet users to pay to access content is a holy grail of sorts for many media bosses. Which model should be adopted? How can digital media become a source of revenue able to compensate for the erosion of print sales? An original solution has been designed by a Slovakian company, already crowned with substantial success in Slovakia as well as Slovenia and Poland.

Founded in Bratislava in May 2011 by a former journalist named Tomáš Bella, the company Piano Media was inspired by the system of cable TV packages in developing its offer of a unique online paying platform for different newspapers: several press titles (dailies and weeklies) make available the content of their choice on a single portal covered by a single subscription.
 
This may recall the initiative of major press players in France[+] NoteThe dailies Les Échos, L'Équipe, Le Figaro, Libération, Le Parisien/Aujourd'hui en France and the magazines L'Express, le Nouvel Observateur and Le Point.X [1], which were brought together in the e-Presse Premium digital newsstand in July 2011, and formed a partnership with Orange for its site Read and Go. But Internet user enthusiasm remained limited, and in ten months, the e-Presse digital newsstand sold the equivalent of 50,000 print copies for only subdued success.
 
In contrast, enthusiasm was immediate in the small countries of Central Europe for Piano Media: 2.3 million users have already been won over in less than a year. Driven by its success in Slovakia, where 12 daily and weekly press titles are available, Piano Media set out to win over Slovenia in January 2012. After a few months, the site gathered eight Slovenian press publications and counted nearly 1.2 million users in the country.
 
How can such swift success be explained? Tomáš Bella, the former director of one of Slovakia’s main news portals, SME.sk, is a credible and respected player in the Slovakian media industry, able to use his network and influence to convince press titles to join his project. Subsequently, according to the president and founder, the countries of Central Europe - “pragmatic markets” - were able to be quickly won over by the centralization of a limited media selection. According to David Brauchli, head of communication for Piano Media, the decision of the New York Times to opt for a paywall in April 2011 managed to change the minds of media players reluctant to join the project up until then.
 
Furthermore, Slovakia is a distinctive market: the print offer is rather limited, newspapers are concentrated in Bratislava and there is not a single online-only player on the Web media landscape, with the exception of the site Aktualne.sk. This site is banking on online advertising revenues, a model that is destined for failure, according to David Brauchli, who thinks that these revenues will be increasingly monopolized by Yahoo!, Facebook and Amazon.
 

payment portal on the Piano Media platform

Piano Media is banking on total centralization of the offer and extremely easy access. Three options are available, granting total access to all of the network’s pages: weekly (1.39 euros), monthly (3.90 euros) and annual (39 euros) for Slovakia. The goal is to offer simple, user-friendly options, and payment can thus be carried out using one of ten different methods.
 
But how are revenues divided up in this model? They are shared between the media outlet of the first page visited by the user on the platform (40%), and the other media outlets on the system surfed by the subscriber, based on the amount of time spent on each page (30%); the remaining amount goes to Piano Media.
 
In order to make the subscription even more attractive, the media outlets present on Piano Media allow users to watch documentaries and TV series without ads, as the platform even attracts radio websites and TV channels. This is the case in Slovakia, where, since late 2011, most local magazines and a major TV station have joined the project.
 
Subsequently, Piano Media attacked a major market in July 2012: Poland, which counts 19 million Internet users. The landscape there is more difficult for the start-up, with strong media outlets located throughout the country. Despite the odds, the platform succeeded in bringing together nearly 44 websites, including that of Polish National Radio – a veritable institution in the country of Chopin. The site Forbes.pl is also present, making 10% of its content available in the platform’s “common pot”; and the owner of Forbes.pl is none other than joint venture Ringier Axel Springer, which includes Axel Springer, the biggest European press publisher[+] NoteNotably publisher of Die Welt and Bild.X [2]. Success for Piano Media in Poland could have a true impact and perhaps herald fruitful collaboration between the Slovakian start-up and Axel Springer in other European markets.
 
At a time when most western newspapers are seeking a model, along the lines of the Washington Post, persistent champion of free access which is finally making users pay for its content, the case of Piano Media may interest industry professionals. But can this revenue miracle really be applied everywhere? The days of the press’s quest for the holy grail do not yet seem numbered…
 
Translated from French by Sara Heft
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Photo Credits:
Courtesy of Piano Media
  • 1. The dailies Les Échos, L'Équipe, Le Figaro, Libération, Le Parisien/Aujourd'hui en France and the magazines L'Express, le Nouvel Observateur and Le Point.
  • 2. Notably publisher of Die Welt and Bild.
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