The consent or pay model is a new trend in the world of subscription business, and it’s becoming a regular topic on news sites. In the UK, for example, the Information Commissioner’s Office (ICO) is inviting people to share their views on the model as it prepares its ‘final regulatory positions’.
If you run a subscription business, you need to understand how the consent or pay model stands to impact the industry in the future. To help you navigate this issue, we’ll take a closer look at how it works and some of the top publishers who have adopted it so far.
What is the consent or pay model?
At a time when it’s accepted that ads are just an everyday part of online products and services, the consent or pay (or ‘pay or okay’) model offers users a choice. They can either:
- Access online services without paying for them, but only if they consent to their data being used for personalised advertising.
- Refuse to consent to their personal information being used and pay to access the service instead.
Internet services that have been ‘free’ are now becoming paid in one way or another. You can either choose to pay for your privacy and prevent businesses from harvesting your personal data, or you can agree to personalised advertising based on your user and browsing data.
Personal privacy while browsing websites and online platforms has been a common topic of discussion in recent years. In the wake of the General Data Protection Regulation (GDPR), enacted in May 2018, users must consent to or reject tracking before using sites or platforms. But, businesses using the consent or pay model are taking away the option to reject tracking — unless they pay a fee.
Consumers on a tight budget may feel they have no choice but to consent, which may negatively impact their experience of a service. Others may resent paying but do it anyway, which isn’t ideal for the customer experience either.
Subscription businesses should consider these drawbacks carefully before switching to the pay or okay model.
5 publishers who have adopted a consent or pay model
A number of well-known companies have adopted the pay or okay model, and some have experienced a backlash. Here are five high-profile examples.
Meta/Facebook
Meta/Facebook switching to the consent or pay model has become a major talking point online. The social media giant started charging users based in the European Union for ad-free versions of Facebook and Instagram in 2023 (though both platforms would remain free for anyone who agreed to being tracked). The rate is €9.99 or €12.99 per month on web or mobile, respectively.
As reported by TechCrunch, eight consumer rights groups from across the EU have filed complaints with national data protection authorities about this move. The Bureau Européen des Unions de Consommateurs (BEUC) suggested that Meta aims to ‘coerce consumers into accepting its processing of their personal data’ and makes it ‘impossible’ for consumers to understand how data processing differs from option to option.
Heise.de
Translation: We and up to 182 partners use cookies and tracking technologies. Some cookies and Data processing is technically necessary. Others are used to improve our offering and make it more economical operate.
With our Pure subscription you can use heise.de without tracking, external banner, and video advertising for €4.95 / month. Subscribers to our magazines or heise+ only pay €1.95 per month. Information on data processing in general
Subscription can be found in our data protection declaration and in the FAQ.
Heise.de, one of the biggest German-language tech news sites, started using the pay or okay model in 2021. However, the Data Protection Authority of Lower Saxony (LfD) has since found this approach to be illegal after an investigation.
Specifically, the LfD decided that Heise.de failed to be clear about what users were consenting to and that the website started to process visitors’ data from the moment it was accessed — before they had the chance to pay to not be tracked. It also found that the consent or pay model costs were highly disproportionate.
Der Standard
Translation:
Continue reading with advertising:
Use derStandard.at with your consent to the use of cookies for web analysis and personalised advertising measures. Details can be found in the privacy policy.
derStandard.at Pure:
The subscription for derStandard.at completely without advertising and data tracking. Monthly subscription can be cancelled at any time.
In 2021, Austrian daily newspaper Der Standard introduced a paywall of €8.90 monthly (or €107 annually) to access its content without data being processed for ads.
However, the Datenschutzbehörde (DSB), the Austrian Data Protection Authority, found that granting consent to targeted advertising was 'invalid' as the cookie banner failed to meet GDPR requirements. It also stated that valid consent should be ‘free, specific, informed, and unambiguous’.
SPIEGEL.de
Der Spiegel, a German news site, has also moved to the consent or pay model. It requests that users either consent to sharing data in exchange for free content or pay €0.99 per week to access the site without ads. Existing subscribers, though, can add ad-free access to their account for €0.49 per week.
However, there is a lack of immediate clarity surrounding payment options and consent when accessing Der Spiegel. Visitors are presented with the choice of accessing the site ‘with advertising and tracking’ or to ‘read ad-free’. Clicking on the ‘read ad-free’ option takes users to another page that covers subscription costs.
Der Spiegel has introduced this payment option on top of its existing subscription, allowing access to all its content.
FAZ.net
Read as usual with advertising
"Use FAZ.NET with personalised advertising, advertising tracking, usage analysis, and external multimedia content. Details on cookies and processing purposes as well as on your possibility of revocation at any time can be found below, in the cookie manager and in our privacy policy. * Our terms of provision apply to this use. Access to articles marked with F+ continues only with paid subscription F+."
Ad-free with F.A.Z. Read pure
"Read FAZ.NET focuses almost without advertising and without advertising tracking for 4.99 € / 4 weeks or as a subscriber at a preferential price of 2.99 € / 4 weeks. Access to articles marked with F+ still only with paid subscription F+."
FAZ.net, another news site, presents users with two options when they arrive:
- Read as usual with advertising: This refers to using the site with ‘personalised advertising, advertising tracking, usage analysis and external multimedia content.’
- Ad-free with FAZ: Users can choose this option to read the site ‘almost’ without advertising and advertising tracking for €4.99 per month or on top of an existing content subscription for €2.99 per month.
As with Der Spiegel, Faz offers existing paid subscribers a minor discount to switch to ad-free content, but they still request that they pay more on top of their current fees to avoid ads.
What subscription businesses should consider about pay or okay models
The pay or okay model might be gaining traction, but it’s in murky legal territory in many countries worldwide. It puts potential subscribers in a no-win situation — no matter what they choose, they end up paying something to access consent-or-pay platforms.
The model may be considered anti-consumer, too, and could harm the public’s perception of companies adopting this approach. Subscription businesses considering consent or pay models should keep these factors in mind.
The consent or pay model will spark further controversy and discussions surrounding data privacy. For the latest updates and news on the subscription commerce world, keep reading the Limio blog! And if you need help improving the conversion and retention rates of your subscription sales, get in touch with us!