Paywalls Rise Again: Pando is Latest to Introduce Membership Model

On Monday, Pando (formerly PandoDaily) joined the ranks of Slate and Time Inc., becoming the latest media company to turn its online content model from free-for-all to freemium. The site launched a membership-driven paywall where the newest articles on the site will be available to members first. Memberships cost $10 a month or $100 for the year. Like Slate Plus, Pando promises more exclusive member features to come.

The paywall coincides with a massive overhaul of the site, wrote founder, editor-in-chief, and CEO Sarah Lacy and editorial director Paul Carr in an announcement to Pando readers. The redesigned site is powered by an in-house CMS, inherited from the acquisition of Carr’s NSFWCORP in 2013. In that sense, wrote Lacy and Carr, the paywall has been over two years in the making.

In fact, the new paywall shares some key characteristics with NSFWCORP’s paywall. An unlock feature, which allows members to unlock a certain number of articles and share with non-members, was originally a feature of NSFWCORP’s paywall. “We had to solve that problem of how you show people what’s behind the paywall without just giving away a bunch of free stuff,” said Carr in an interview with Mathew Ingram (then of GigaOm) after NSFWCORP was acquired, “And the answer is you do what a member’s club does, you allow subscribers to share with non-members.”

The impetus for creating paywall, aside from having the tools at hand, was a need to diversify revenue streams, stem the reliance on advertisers, and remain an independent voice in the tech startup space. “We appreciate our advertisers, and we love hosting events, but for Pando to stay both fiercely independent and healthily solvent we knew we needed to add a third leg — subscription revenue — to the stool,” wrote Carr and Lacy.

The news of Pando’s paywall comes shortly after Time Inc.’s paywall launch for Entertainment Weekly. While Time Inc.’s move was partly in the interest of driving direct revenue, it maintained that there is an added value of richer consumer insights. “Deepening our relationships with digital audiences who value our premium content is of paramount importance to us,” said Ripp in a press release. “It enables us to better identify and understand the changing needs of our audiences and provide greater value by introducing targeted products and services.”

However, some argue that the bid for data isn’t worth the tradeoff of revenue lost from the inevitable dip in traffic and ad revenue that a paywall will affect. In a recent article for Fortune, Ingram wrote, “Although newspapers and magazines can get more information about readers who subscribe, in many cases there still won’t be enough scale to make that kind of audience worthwhile to an advertiser when compared with massive platforms like Facebook and Google.” These platforms can deliver even more granular data, at scale, to advertisers than subscription information can provide, argues Ingram.

Yet Pando cited the failure of GigaOm and struggles of TechCrunch and Re/Code to remain free and independent as support for its freemium move. Though the pendulum has swung in favor and against paywalls multiple times, it’s clear that some publishers are again bullish on paid online content. Whether Slate and Pando have cracked the paywall puzzle is yet to be determined.

Ellen Harvey is a freelance writer and editor who covers the latest technologies and strategies reshaping the publishing landscape. She previously served as the Senior Editor at Publishing Executive and Book Business.

Publish date: June 25, 2015 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT