If you survey the field of publisher subscription models, you’ll basically find that the vast majority of media outlets utilize one of two kinds of paywalls.
The first is the metered paywall, the kind that was pioneered by The New York Times and later adopted by hundreds of other companies. Publishers love this model because of how it monetizes a publication’s loyal audience without alienating more casual readers who want to sample the website’s content. When done well, a metered paywall allows publishers to generate reader revenue without forcing the outlet to take a negative hit to its web traffic. That way it can continue to monetize with ads.
The second kind of paywall, utilized by publishers like Business Insider, employs a “freemium” model in which the vast majority of the site’s content is made available for free, while a smaller subset of articles are placed behind a hard paywall. This approach allows far fewer freeloaders to get around the paywall, but requires a high rate of content production so you can service both your paying and non-paying audience.
There’s a third model that’s used by a much smaller group of publishers: the hard paywall. The upside to this approach is it requires every user to be logged in, so readers can’t use various browser tricks to get around a meter. And when done well, the hard paywall can squeeze out more revenue per reader, which means you don’t need to reach massive audience scale before you start generating real revenue.
Of course, there’s a reason why most publishers don’t pursue the hard paywall model. Without allowing readers to sample content for free, it’s much more difficult to convince them to open up their wallets and hand over their credit card information. This also limits word-of-mouth marketing, given that the publisher’s content can’t be as easily spread over social media and other distribution channels.
That’s what makes The Information’s paywall success so impressive. Most other news organizations that utilize hard paywalls — like The Wall Street Journal and Financial Times — have existed for decades and therefore could leverage their longstanding brands to drive digital subscriptions. But The Information was only founded in 2013 and was virtually unknown at the moment it started asking readers to pay for its content.
Despite these barriers, the site achieved profitability in three years and has driven up to 20,000 subscribers who are paying $399 a year for access to its content. Its coverage is widely discussed within Silicon Valley and it regularly scoops its biggest competitors on some of the important stories in tech.
So what are the secrets to its success? There are five components to The Information’s strategy that I want to call attention to.
Hire experienced reporters
With only two dozen reporters and editors at its disposal, The Information has to maximize the editorial impact of every journalist in its employ, which is why it relies on hiring some of the most experienced writers in the industry. That includes its founder, Jessica Lessen, who started working at The Wall Street Journal in 2005 and, by the time she left, was considered a one-woman scoop factory who was able to greet some of the most powerful tech CEOs on a first name basis.
Lessen lured many of the people on her staff — including her former boss at the WSJ — away from top tier outlets by offering them as much as $180,000 a year. Peruse the bylines on the site’s homepages and you’ll find alums from Bloomberg, The Wall Street Journal, and TechCrunch, among other venerable outlets.
Having A-list journalists on staff is vital to The Information’s paywall success. Veteran reporters are better sourced and have a higher likelihood of landing pay worthy scoops. And established journalists boast already-existing social media followings that they can leverage to promote their content. That following plays an important role in spreading word of mouth for content that isn’t shared easily outside of the site’s paywall.
Steer clear of commodity news
Listen to or read any interview with Lessen, and at some point during the conversation she’ll boast that The Information only publishes a handful of articles per day. On the day that I’m writing this, The Information has only published four new stories to its homepage. Compare that to TechCrunch, which published 43 articles today and counting.
Because The Information doesn’t monetize with ads and charges so much for a subscription (more on both of those points in a moment), it can’t get away with churning out commodity news that can be found on every other website. “You can’t put a paywall on a pig,” Lessen explained at a media bootcamp. If a story isn’t truly original, The Information doesn’t consider it worth publishing.
And it isn’t merely settling for small scoops. It aims for impact, the kind that results in executive firings or moves a company’s stock price. Its extensive reporting on sexual harassment allegations at a prominent venture capital firm, for instance, led to a partner’s resignation. It broke the news that eBay would spin Paypal off into its separate company.
Stories with that kind of impact directly drive subscriptions. According to a recent New York Times profile of the company, a 2014 article about the mistakes made by an executive at Google’s Nest division “converted over 600 new subscribers in the first day.” “We don’t have a sales person. The subscription business sells itself if you create a great product,” Lessen told Digiday. In another interview she expanded on this point. “I always say, you really need to go for the 10x and focus on the things that are 10 times better or different than what other people are doing.”
Many articles about The Information fixate on its price point, and for good reason. At $399, it’s priced higher than most general interest publishers like The New York Times and Washington Post.
That’s because it’s a niche product that has a potential audience that only numbers in the hundreds of thousands. If it cut its price in half, it wouldn’t necessarily be able to double its subscription numbers, and given that it targets its content to tech executives and Wall Street, its user base is relatively price insensitive. I wouldn’t be surprised if a substantial portion of its readers also pay north of $20,000 for an annual Bloomberg terminal subscription. “The lifetime value of our subscribers is way north of $1,000,” Lessen said. “ … Churn isn’t an issue for us. More than half our subscribers pay us annually, and the churn is negligible.”
And by setting your price so high, it gives you the freedom to offer discounts and also introduce lower-priced products. In 2019, it launched a $30-a-year app that offers a more consumer-focused version of its content without the inside-baseball minutiae that’s important to the tech elite. Not only does this allow The Information to generate additional revenue, but the app serves as a lead generator that can convert the app’s readers into subscribers for the more robust, $399-a-year product.
Leverage your community
I’ve written in the past about how publishers that closed down their website comments sections made a big mistake by doing so, but subscriber comments are especially important to The Information’s success.
Getting to comment on Information articles means you can essentially have a conversation with some of the most important and influential people in tech. Because the price of admission is set so high, fewer trolls can slip through, and the general quality of the discussion is higher than what you’ll find on a free news site. “It’s become one of the most powerful parts of the site,” Lessen told Digiday.
Information subscribers aren’t just limited to commenting on articles. They have access to a private Slack channel where they can engage on an unlimited number of topics. They also can attend a number of live, in-person events The Information puts on each year. Rather than trying to squeeze additional money out of subscribers, the publisher grants them free admission as part of their subscription.
Make your product ad-free
This one might raise hackles for some. I have nothing against companies that diversify their revenue by monetizing with both ads and subscriptions, but going ad-free like The Information did can strengthen a publisher’s value proposition in four ways.
First is the psychological appeal. A lot of news consumers justify using Chrome’s incognito mode to skirt around a metered paywall by telling themselves that the publisher is able to monetize their visit through advertising. Going ad-free removes this justification.
Then there’s the better user experience. While the rate of ad blocker installations has leveled off, there’s still widespread consumer disdain for website ad tech, both from a privacy standpoint and also for its ability to slow the browser to a crawl. The Information is just one of many news outlets that offers an ad-free version as a subscriber perk.
Going ad-free gives your publication a legitimate claim to independence. While most media companies tout the Chinese firewall between editorial and ad sales, there’s always a tension between the two departments, especially when you’re operating a smaller publication that can be hurt by the departure of a single large sponsor. Given the insularity of Silicon Valley, Lessen can plausibly claim that she isn’t subjected to pressure from The Information’s sponsors.
Finally, forgoing ads removes any remaining incentives to engage in clickbait journalism. The moment you introduce advertising into the mix, then there’s monetary pressure to expose the ad to the widest audience possible. An outlet without ads can devote the entirety of its focus to one goal: keeping subscribers happy.
Of course, Lessen would probably point to several other strategies that are vital to The Information’s growth, including extreme discounts for new enrollees, free trials for those willing to give up their email addresses, and promoted tweets targeted to those who work in the tech industry.
While all these certainly play an important role in The Information’s success, I think Lessen would agree that without the outlet’s unwavering focus on providing its subscribers with the best possible content, The Information wouldn’t be regularly hailed as one of the few bright spots in a struggling industry. As Lessen put it in a podcast interview back in 2018, “You become a successful subscription business not when you put a paywall up; you become a successful subscription business when you have content that’s worth paying for.”
Simon Owens is a journalist living in Washington, DC. His weekly newsletter provides deep analysis on the media industry. You can find it over here.