The Metered Model: Part 1

Posted by: Matt Shanahan

One of the hot topics with our customers right now is the metered model. The metered model blends advertising and subscription revenue by recognizing some visitors have higher or unique demand for the content and are willing to pay for the right to consume it.

The metered model assumes an audience can be segmented according the the value they derive from the publisher’s content. In the metered model, the publisher utilizes different pay points to package the content in the right monetization model for the right audience member. These pay points can be the following:

• High Demand: Visitors can view a certain amount of content within a particular time period.
• Premium Content: Some content is free, other content is paid.
• Premium Services: Visitors pay for personalization, access to commenting systems, tools to share content or other services.
• Time-Based: For a particular time period after content is published, it’s available for a fee; later, it’s free.
• Location-Based: Visitors pay based on where they are. For example, international visitors may have to pay because their visits don’t provide ad revenue.

The metered model works well because it creates a personalized exchange of value between the publisher and the audience. Audience members that don’t value the content as much (i.e., they don’t consume much) don’t have to pay for the occasional times they want it. Paying audience members are the ones that consume the content frequently because it is uniquely suited to their preferences or needs.

The metered model also works well because it can be gradually dialed in. The pay points can focus first on smaller segments of the audience with the highest demand or that use the most unique content. Rather than creating an all or nothing paywall, audience segments can be identified, targeted, and monetized to create incremental revenue without creating revenue risks.

HuffPo is generating $1/year/audience member compared to $4/week/standard subscriber at the FT. In part 2, I will run some math to begin understanding the lifetime-value of audience members in a metered model vs. an ad-only model.