slate-plus-adEven though I am a regular reader of Slate, I missed this announcement last month that they are putting in a metered paywall for International (i.e., non-US) readers. Like many other news sites, you can have, in this case, 5 free articles a month and for more will have to pay $5 a month for access to everything. This is basically a new way of getting International readers to pay for its premium product, Slate Plus — that is, by the age old tradition of downgrading the quality of the free product. Fair enough, but why?

The reason Slate gives is that it is ad supported:

… there’s a problem: Our U.S.-based sales team sells primarily to domestic advertisers, many of whom only want to reach a domestic audience. This may sound provincial, but there are decent business reasons for it: Maybe the car company buying ads on our site doesn’t sell the model it’s advertising in your country. Or maybe the marketing strategy where you live is different. Whatever you think of the logic, the fact is inescapable: Many U.S. advertisers won’t pay us to reach readers outside of the United States.

Yes, that makes sense. The usual solution to that is to find advertisers outside of the US and if there is one thing that platforms such as Google’s DoubleClick are able to do is find those advertisers. Why would a site like Slate have a “US-based sales team” or a “sales team” at all?

Anyhow, the question is why? So only US readers are currently valuable to Slate and US advertisers don’t want to pay for International readers. That is all fine. What you can do is make sure you don’t serve up ads to International readers and get accurate measurement of US readership and impressions put in front of them. End of story.

But that is not what Slate wrote:

The end result is that, outside the United States, we are not covering our costs. That leaves us, as a business, with two choices: either make up for low ad rates by increasing the number of ads on the site, or turn to our readers to pay a fair share of the costs of producing the site. We’ve opted to do the latter.

“Not covering our costs”? What costs are those exactly? It is just a web page. One can imagine that International calls on that page add up but I would still be surprised if Slate as a marginal rather than a fixed cost intensive business. Again, even poor ad rates internationally would still likely cover those costs.

The bigger issue is this: it is easy for International readers to present themselves as being in the US. So many video sites, for example, as for it, that many already have the knowledge, plugins etc to do it. Slate is giving them yet another reason to do so. That may be a form of copyright infringement or something but, in this day and age, any reasonable media business has to expect it.

The problem for Slate is this: if, by encouraging International readers to mask their location, they do so in non-trivial numbers, then the data that Slate presents to its sales team to obtain US advertisers will be inflated. In principle, that won’t erode total revenue so long as Slate and those advertisers have an idea of precisely how inflated those numbers are. I don’t know how they would do that (beyond the very short term) so one suspects that this announcement pay reduce Slate‘s US advertising revenue over the medium to long-run.

The bottom line is that the last thing a media company wants to do is play games with second degree price discrimination. It is hard to have group pricing because then you have to identify whether someone is a member of a group at precisely the same moment you are giving them incentives to not reveal that.

7 Responses to Slate’s new international paywall seems ill-conceived

  1. cottoncloth says:

    Agreed. Why don’t they use a service to sell international ads to the appropriate customers? Like the rest of the web does. But even if that were impossible, Turner’s argument that extra non-relevant page impressions somehow dilutes the effectiveness of an ad is ridiculous. Does she really believe that? Doubtful. This feels all very hail mary-like.

    I’ve been reading Slate for long enough that I full well remember their first flirtation with paywalls. You could call me one of their most loyal readers. And now I’m surplus to requirements.

    It all just pisses me off.

  2. Donal Curtin says:

    I’m with ‘cottoncloth’ – I’m also a very early international Slate reader, and one that’s often happy to pay for good paywalled content, and now I see an ineffective attempt to charge me that won’t even work for Slate itself. So you have a bad idea operational idea with the added bonus of aggravating your readership. Nice.

  3. Bye-bye Slate says:

    Dumb, dumb, dumb, dumb, dumb.

    If only there were some way of targeting ads based on IP addresses or something. I mean, if Slate’s web-gnomes can figure out where I’m from, it shouldn’t be that hard to try and sell me something.

  4. Charlie says:

    I think it is down already, anyway. What I found irritating is that Slate has always shown me incredibly accurate affilate marketing ads based on my precise location, Berlin. These are the exact same ads I see when I visited German media, so it is hard for me to believe that Slate gets so little for them in comparison to say, Der Spiegel. I never see US ads unless I’m using a tunnel.

    It is a lie from Turner, I am sure of it. I guess they had some shocked board meeting his month when they saw their international readership drop 100% while private or “US” readers skyrocketed. And I bet exactly 2 people paid. How stupid did they really take us for? If we can convince iTunes and Amazon to regard us as US customers then whywould a silly paywall at Slate stop any of us?

    Now, if Slate had called out to all of us readers, wherever we are, pleading that they are going broke then that would be somethng else and I might just pony up and send them something. But lying to me, insulting my intelligence and discriminating against me because I do actually live abroad? Not a chance.

  5. Marno says:

    Suppose this is just a warm up to putting up a paywall for their US readers too? I might have been convinced if the rates were more chump change — like the price of a coffee for month’s reading, or $10-$15 for a year, but $30-$50/yr is what I pay to subscribe to proper magazines that have actual printing and mailing costs (and those are US based mags, too). I suspect that they simply aren’t commanding the ad revenue they need for their “provincial” domestic audience either. Adblock software is pretty easy to install, and only very canny websites know how to get around that. Also, Slate might not have the cachet it once did what with sites like Buzzfeed, the Gawker network, and Vice commanding a lot more attention, occasional notoriety, expansions, and forays into actual journalism from time to time. In comparison, a lot of Slate just seems quaint and rather grandfatherly in its persistent contrarian slant on most issues. (“Everyone says X is bad. We’ll write how it is surprisingly good. Now Y has a reputation for being helpful. Our article will describe how it secretly makes orphans and puppies cry themselves to sleep.”)

  6. Elaina says:

    As an international customer who enjoyed reading Slate, I decided to dig into my pockets and just pay up. Unfortunately, Slate is having so many issues with its paywall that I’m going to have to cancel my subscription anyway. Even when signed in, the paywall continuously blocks your access to content. So my advice is to find another site that offers similar content… or go stealth. Slate’s own technology team is so limited that they do not seem to have the ability or motivation to figure out the problems with the paywall, and customers are complaining in droves.

  7. Later, Slate says:

    I’ve always enjoyed Slate’s content, and also missed the international pay-wall announcement. So it was a bit of a disappointment to suddenly be blocked. I’m not willing to pony up to read their content, because as others have pointed out above, the subscription cost is similar to hard-copy magazines – who deal with printing & mailing expenses. I’ve also noticed that their pay-wall meter doesn’t work at all – it constantly tells me I’ve read my “5 free articles” for the month, when I haven’t opened a single one. There’s no reason to believe it will work better if I’m paying! So long, Slate!

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