1. by Znak, Inc.
Paywall or Not To Paywall:
Alternative Solutions
Feb 23rd 2012 – Paywall Strategies, London
All presented here materials, ideas and business concepts are confidential. They are the property of Znak, Inc.,
a Delaware corporation; and, they cannot be used, copied, distributed nor shared in any form and means
(the appropriate US and international laws apply). Znak it! Is a registered trademarks owned by Znak, Inc. The
Znak it! business idea and a micropayment solution are protected by the USA and international patent laws – New
US Provisional Application No. 61/046,623
1

2. 2011 The Rise of the Paywall?
“The metered wall is the coolest thing since
the beginning of the WWW.”
Steve Brill
“The NYT paywall is working…
…it’s a dream.”
Felix Salomon
Copyright (C) 2009 by Znak, Inc. 2

3. 2012 – Paywalls Revisited
The NY Times Paywall is
Stupid… Really Dumb
Greg Satell
“’a cartel of news’…
’walled gardens’…”
Clay Shirky
Copyright (C) 2009 by Znak, Inc. 3

4. Lessons Learned
Paywalls can be:
 Expensive to start;  It took the NYT two years
technologically challenging; and $25 to $45 Million to
costly to run/market. launch its „metered wall;‟
 Additional $18 Million to
promote it in 2011 alone;
 Given the 390,000 new
subscribers at the end of
2011 -- $110 to acquire
one subscription;
 Loss of traffic and ad
revenue
Copyright (C) 2009 by Znak, Inc. 4

5. Lessons Learned
Paywalls can be:
 Expensive to start;  Before paywall the NYT
technologically challenging; traffic was about 39 - 41
costly to run Million uniques per month
(US traffic only);
 Require large scale;
conversion rates slow down &  Down 20% in Dec 2011;
plateau; „silo effect;‟
 With 390,000 subscribers
– 1% visitors signed up;
 Subs growth slowed from
124% Q1 to 20% in Q4
Copyright (C) 2009 by Znak, Inc. 5

6. Upside-down “Hockey Stick”
124%
45%
20%
Copyright (C) 2009 by Znak, Inc. 6 / 11

7. Lessons Learned
Paywalls can be:
 Expensive to start;  Long-term „blind‟
technologically challenging; commitment with up-front
costly to run payment; no a la carte;
 Require large scale;  Substantial cost if multiple
conversion rates slow down & sources/subs desired;
plateau; „silo effect;‟
 Registration (ID/PIN/cc
 „Walls,‟ after all – barriers to info) – can be lost/stolen;
readers‟ access & engagement
 50% apps have problems
recognizing sub ID/plans.
Copyright (C) 2009 by Znak, Inc. 7

8. Lessons Learned
Paywalls can be:
 Expensive to start;  One-way „engagement‟;
technologically challenging;
costly to run
 Readers as buyers -- You
pay, we deliver what WE
 Require large scale; want, incl. “free” content;
conversion rates slow down &
plateau; „silo effect;‟
 All or nothing;
 „Walls,‟ after all – barriers to
readers‟ access & engagement  Reliance on the most loyal
(local) readers; passers-by
(majority of all uniques) a
 Media/publisher-centric second category?
Copyright (C) 2009 by Znak, Inc. 8

9. Need Something Better
Copyright (C) 2009 by Znak, Inc. 9

10. Alternative to Paywall
Copyright (C) 2009 by Znak, Inc. 10

11. What is it? For whom?
Znak it! – an integrated premium
content curation and monetization
Content Providers platform
Znak it! – a frictionless, safe and
private way to access premium
content as-you-go Web Users
Znak it! – a direct-to-user
Marketers & promotion channel and market
Advertisers research tool
Copyright (C) 2009 by Znak, Inc. 11

12. A Win-Win-and-Win Solution
Web users can buy Znaks
(credits), using all types of
transactions available online,
i.e. credit cards, PayPal, bank
transfer, etc.
Or, they can earn Znaks and
thus fund their Znaccounts
through Marketers‟ programs
Marketers – the
Third Winner
“Free” or ad-sponsored
Znaks earned in exchange
for a clickthrough (CTR) or an
1 Znak = $0.01 or an action (CTA), e.g. answer to
equivalent in other currencies a mini-survey/market poll;
opt-in advertising, etc) or by
reading product content paid
for by a marketer
Copyright (C) 2009 by Znak, Inc. 12

13. Business Model Options & Benefits
Paywalls vs. Paygates such as Znak it!
 SaaS -- no set up and system maintenance
 Expensive, low ROI; costs; up to 94% return;
 Require large scale;  Also for the “long tail;” truly World Wide;
divide users into
categories  Technology- and portal-agnostic;
 Flexible, a la carte, on-demand access;
 Create „silo effect;‟
 Supports different payment methods, incl.
 Closed, rigid, might donations and ad-sponsored access;
cannibalize other
sources of revenue;  User-centric, payment as social engagement,
content sharing & recommendations;
 Media/publisher-centric ,  Private, intrinsically safe; can be used for
not engaging anonymous access – without registration;
frictionless
Copyright (C) 2009 by Znak, Inc. 13

14. Znak it! Market Niche
120%
Znak it! Payment Niche
Cost of Znak it! as compared to
100%
102.90% PayPal charges
Percentage Commission
Znak it!
80% PayPal
Regular
PayPal
60% Micropayments
52.90%
40%
27.90%
20% 21.67%
17.90%
8.85%
6.00% 5.40%
3.90%
0%
$0.3 $0.6 $0.9 $1.2 $1.5 $1.8 $2.5 $5.0 $20.0
Transaction value
Copyright (C) 2009 by Znak, Inc. 14

15. An Example – Online Magazine
Znak it! icons embedded into an
online version of a magazine to
indicate some extra content
(pics) available for a fee or a
feature piece with a free lead
Ten more Pictures of Polanski available
through Znak it
Source: MaleMen Magazine. Poland
Copyright (C) 2009 by Znak, Inc. 15

16. An Example – Online Newspaper
Examples of Znak it! embeddable links
and widgets – as payment gateways
Customizable shapes
Easy, copy-and-paste insertion of Znak
it generated codes by Publishers
For the User: two clicks with the mouse
to get access to and pay for selected
content. Payment authorization and fund
transfers done by the system in real time,
SSL-encrypted
Copyright (C) 2009 by Znak, Inc. 16

17. Frictionless Instant Access to Content
Two mouse-clicks access
and authorized payment;
No delays, no need to
leave content page or
enter any codes, PINs
Copyright (C) 2009 by Znak, Inc. 17

18. Samples of Successful Application
Znak it! was first presented during the 2008 Web 2.0 Expo in San Francisco.
Until 2011, it was used mainly to monetize music and gamming sites.
In April 2011, we developed a new version – won the Florin Award for the most
innovative online transaction service (EPCA, Amsterdam)
The current platform was launched in August 2011 (private beta) – 320 content
providers and nearly 100,000 users have since registered.
Now, we run several pilot projects with major content publishers, incl.:
 two regional news/magazine publishers (C. America, E. Europe)
 a photo sharing and media site, similar to Flicker (USA)
 an online music service (USA, Europe)
 producer of video content: sports, fashion & entertainment (global)
Copyright (C) 2009 by Znak, Inc. 18

19. Pilot Cumulative Results
Based on the first month of each of the 5 pilots (Nov 2011 – Jan 2012)
Price/piece in
Pieces of content No
Znaks
Video clip (sports) 15 199
Music file (MP3 download) 90 99
Article bundled w/photos 60 49
Single article, free lead 30 39
Crossword puzzle 30 25
Photos 120 10
Total/average 345 52
1 Znak = $0.01
Copyright (C) 2009 by Znak, Inc. 19

20. Pilot Cumulative Results
Price/piece in
Pieces of content Qualified Clicks Clicks/piece
Znaks
Video clip (sports) 15 199 678 18.0% 45
Music file (MP3 download) 90 99 1,297 34.4% 14
Article bundled w/photos 60 49 465 12.3% 8
Single article, free lead 30 39 397 10.5% 13
Crossword puzzle 30 25 169 4.5% 6
Photos 120 10 761 20.2% 6
Total/average 345 52 3,767 100% 11
„Qualified clicks‟ equals content purchases – 3,767 out of 45,939 visits, or 8.2%.
Assuming quality/user interest, etc., are all equal, then music is most popular overall;
however, sport video clips get the most clicks per unit.
Copyright (C) 2009 by Znak, Inc. 20

21. Pilot Cumulative Results
Revenue/
Price/piece Qualified Revenue
Pieces of content piece
in Znaks Clicks in Znaks
in Znaks
Video clips (sports) 15 199 678 134,922 43.0% 8,995
Music file (MP3 download) 90 99 1,297 128,403 41.0% 1,427
Article bundled w/photos 60 49 465 22,785 7.3% 380
Single article, free lead 30 39 397 15,483 4.9% 516
Crossword puzzle 30 25 169 4,225 1.3% 141
Photos 120 10 761 7,610 2.4% 63
Total/average 345 52 3,767 313,428 100% 908
The average is nearly 91 US cents per piece of content, and 83 US cents per user action.
We noted 1,281 unique users – each spending $2.45/mp during the pilot (auxiliary data)
Copyright (C) 2009 by Znak, Inc. 21

22. 2012 The Year of the Dime & Nickel?
“As the economy sputters along, look for sites helping you sell
almost anything you can imagine and making you a “fortune”–
one micro payment at a time.”
Lance Ulanoff, Mashable
Copyright (C) 2009 by Znak, Inc. 22

23. Thank you
Greg Golebiewski
ggolebiewski@znak-it.com
Znak, Inc ,
Sunnyvale CA, USA
Warsaw, Poland
Copyrights © 2011 by Znak Inc 23