Scott Karp of Publishing 2.0 has posted an interesting article today: What Is The ROI Of Requiring User Registration To Access Online Content? , in which he takes a close look at the registration wall used by the New York Times online and wonders whether it is worthwhile.
The theory goes that personal data collected from registered users enables sites to better target ads and charge premium rates. But I wonder whether the lost traffic from users who choose not to jump through the registration hoop — which I bet is particularly true of NYTimes’ large volume of visitors from search engines — outweighs the gain of higher ads rates (assuming NYTimes.com is consistently able to charge higher rates).
As Karp notes, the registration requirement presents a barrier to access for users who come in through a search engine, at a time when NYTimes.com is focused on growing their readership beyond the current regular readers; and these casual users are just the type of users who are likely to have a lower tolerance for jumping through registration hoops, notwithstanding the NYTimes.com claim that registration takes "only a minute".
I’ve run two registration sites, and have spoken with other newspaper.com site managers who have run their own registration-required sites, and two things I found to be true based on empirical evidence:
1) There is no drop off in traffic past the first 60 days of registration (after 60 days, traffic exceeds pre-registration numbers and continues to grow).
Personally I believe that the ROI of requiring user registration is questionable at best. Intuitively, it makes sense that at least some users will get discouraged and drop off when confronted with a "registration required" notice; so there's bound to be some negative impact, with all due respect to Howard Owens [perhaps the numbers he saw can be explained by other changes that happened at the same time, such as SEO enhancements that bumped up traffic, compensating for the impact of the registration?].
At the same time, there is another major trend currently under way that will increase the importance of this debate, and in my opinion, accelerate the crumbling of these registration and payment walls.
This big change is in user behavior. Individual consumers are increasingly flocking first to the major search engines when looking for information and data, rather than to individual web sites, even when they already know high-quality sites that can provide the information. It makes sense from the user's point of view: the user wants to find high-quality content in general, regardless of source, and using a favorite search engine is a quick, easy and comfortable way to do that. This overall trend is inevitable and irreversible. As Don Dodge noted in a recent article: Search engines are the Start page for the Internet.
Empirical evidence indicates that, even for major web sites with strong brands, the number of users coming in from search engines is increasing as a percentage of total traffic (although I do not have hard numbers to back up this claim). This forces content publishers to open up more information in order to satisfy those users, which further solidifies the position of search engines as the starting point - which in turn, forces publishers to open up yet more information - and so on, in a self-reinforcing virtuous cycle.
As publishers see this changing user mix - a higher percentage of traffic consisting of new users coming from search engines - engaging those users will increase in importance, and putting barriers in their path will be less acceptable. Instead, publishers will be forced to find new and innovative models for monetization; similarly, user tracking methods will need to be improved to collect data implicitly rather than requiring explicit action from the user.
As the user starts interacting with the site - if she wants to comment, post or otherwise participate, for example - then progressive upsells into registration and payment are perfectly valid and acceptable. By that point, the site is dealing with thoroughly-engaged users, not casual visitors.
I see it as a question of time before 99% of content from major publishers (NYTimes.com included) becomes free and openly accessible on the Web.
To paraphrase Cory Doctorow (he of the free books !) and Tim O'Reilly, on content: the real danger isn't loss of revenue through sharing, it's obscurity and irrelevance.