Paywalls Are On The Rise with Many Success Stories

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Drizzle
Nov 22, 2016 · 6 min read

When newspapers were the ultimate form of communication, they thrived using subscription plans. By paying a small fee to read the content of the paper in print, subscribers contributed to the production. These plans were the bread and butter of journalism right alongside advertising, but the Internet changed things.

Today, blogging is a way of life for many people. Blogging platforms like WordPress offer statistics that might surprise you [1].

  • 409 million people read blogs on WordPress each month
  • There are 22.1 billion WordPress pages read monthly
  • Bloggers produce 59.3 million new posts during a 30-day month
  • There are 43.8 million comments made to those blogs.

The problem is monetizing virtual content is difficult. There are few mechanisms in place that allow you to make money off of Internet posts. If subscriptions were the driving forces in print content, how can bloggers and online news sites hope to make money? A paywall introduces the subscription plan into the virtual world, answering the questions people have about how to make money with a blog.

What is a Paywall?

A paywall system allows you to limit access to web page content until the user has paid for the content. It’s a practical choice for online publications that is less intrusive than ads or clickbait — articles with engaging titles that drag readers into a quagmire of backlinks, quizzes and listicles [2].

A paywall offers websites a better way to measure the effect of their content beyond just views and clicks, too. A viewer willing to pay a small subscription fee is qualifying the effectiveness of the site.

Why is a Paywall Necessary?

Bloggers, newspapers and other forms of content sites can make some money using ads, but it is an uphill battle. Digital advertising only brings in around 10 to 20 percent of the revenue that the same ads do in print. It is not enough to keep major newspapers like the Wall Street Journal or the New York Times alive in digital format [3]. Online content venues need another source of income and a paywall plugin helps fill that gap.

Does Installing a Subscription Plugin Decrease Ad Income?

Surprisingly, large publications have found that adding a subscription service actually boosts the revenue they get from their ads. A number of general-interest publications are reporting as much as a 16 percent increase in ad revenue with the addition of subscription plans [3]. This form of content monetization is leading to an increase in searches, paid subscriptions and online advertising clients.

The goal is to create a new value system for Internet content that allows for direct monetization of websites. Virtual content sites need revenue just as surely as the old newspaper did.

What Kinds of Paywalls are Available?

The paywall is a plugin that you add to your website to protect the content. The viewer sees a slightly opaque cover over the affected areas on the page. Once the payment is made, the cover drops off. The subscription software allows you to customize options for your readers, as well. Paywall systems generally fall into one of two basic categories:

Hard paywalls — A hard paywall blocks all access to online content without a paid subscription plan. A few mainstream news sites take this approach. It is a little more challenging, but can work with the right factors in place such as:

  • High value, premium content
  • A targeted audience
  • Market domination

Papers like The Times were top sellers in print. This is one reason a hard paywall works for them. They already had a loyal audience paying for print subscriptions. They simply merged that market to an online website to allow readers to read from their phone, computers or tablets.

Soft paywalls — As the name suggests, a soft paywall provides more flexibility for both the website and the readers. With a soft paywall plugin, the site may offer some free content while blocking access to other articles. For example, this metered paywall can allow users to read 10 articles free each month. To continue reading the publication, they must pay a subscription cost. The New York Times increased their paid subscriptions by almost 225,000 readers using this model [4].

Some subscription software plans offer a combination of the two types of paywalls. With this setup, the website offers some free content. Subscribers also have access to premium content. The Boston Globe utilizes this combination strategy by offering free content on a mirror site, but providing more focused news articles on their premium site protected with a paywall plugin [5]. The free site still provides quality content like blogs and breaking news, but those who want to read community-based articles must subscribe.

The a-la-carte, or micropayment, option is an effective alternative to a subscription plan. You also see examples of this in action on iTunes and YouTube. The micropayment gives viewers cheap access to what they want to see at that moment.

At one point, North American newspaper Free Press charged just 27 cents per article and made about 8,000 dollars a month from the micropayments. They have since switched to a subscription plan that costs readers about 17 dollars a month [9]. The average micropayment would be under one dollar per view. Subscription plans vary, but The Washington Post charges 2.50 a week or 99 dollars a year for its lowest level plan.

How Does a Paywall Work?

Installing a paywall plan requires you to add a snippet of code in the right place on your website. Using the online tool, you select the type of paywall service you want and then add the code it generates to your pages. A paywall hides the content from view and gives the buyer options to make a payment to see more.

Are There Alternatives to a Paywall?

There are other ways to prevent access to content on pages that may generate some income. Google offers a micro survey platform that requires readers to answer questions before seeing the requested content. This helps monetize the website without costing the viewer anything but time. The surveys provide market research to ad companies that pay anywhere from 10 to 50 cents per response [6].

An alternative that is similar to a paywall system allows readers to pay for a membership program that will come with discounts on products and other types of rewards. The benefits go beyond just access to premium content.

How Successful is Paywalling?

Most mainstream publications report success using a paywall program. The New York Times calls this system a new business model for digital journalism. It adds back some of the value the Internet took away for newspaper publishing [7]. The media conglomerate Gannett Company originally tried adding a paywall to the Los Angeles Times in 2012 and found the experiment profitable enough to add subscriptions to 80 more publications [8].

The Wall Street Journal has an estimated 550,000 thousand paying online viewers and that number continues to grow. The paywall system is turning out to be the answer to one of the biggest challenges the news industry has faced. The digital age could have easily destroyed mainstream media, but adding membership software to the equation has saved it.

The Rutland Times Herald, a family-owned paper in Vermont and the oldest continuously published paper of its kind, found adding a paywall increased the company’s revenue by six figures. They lost less than 9 percent of their ad revenue when making the changeover [10].

It is unclear how many publications utilize a paywall system, but many of the mainstream companies are using one to increase revenues and add an additional layer of security. For content creators like media websites, academic publications and bloggers, direct monetization using a paywall is helping them increase revenues and continue publishing.

Are you a blogger or publisher? Learn more about content monetization: http://blog.getdrizzle.com

Sources:

1. https://wordpress.com/activity/ 2. http://www.wired.com/2015/12/psychology-of-clickbait/ 3. https://www.theguardian.com/media/2011/aug/07/paywall-that-pays-only-in-america 4. http://mediashift.org/2011/11/truth-and-contradictions-the-global-news-industry-looks-to-the-future325/ 5. https://gigaom.com/2011/09/12/419-bostonglobe-com-launches-today-shifts-to-subscribers-only-oct-1/ 6. http://www.thewire.com/technology/2012/03/googles-alternative-paywalls-customer-surveys/50513/ 7. http://www.csmonitor.com/Technology/Horizons/2011/0328/New-York-Times-paywall-How-it-works-and-what-it-means 8. http://www.dailymaverick.co.za/article/2012-03-19-piano-media-slovakias-surprising-paywall-success-story#.V3bFkrgXDIU 9. http://www.marketingmag.ca/media/inside-the-winnipeg-free-press-micropayments-experiment-174776 10. http://www.poynter.org/2013/how-two-small-family-owned-newspapers-in-vermont-had-success-with-a-paywall/222073/

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