A paywall is a digital payment barrier that publishers install to restrict users’ access to content. Users can access content behind the paywall only after paying a fee or signing up for a subscription.
It is not easy to capture users’ attention on paywalls: 68 percent of app users close a paywall in less than 10 seconds (source “App Promotion Summit SF 2022”).
It should be kept in mind that personalization can improve consumer engagement strategy: 80% of online newspaper users said they are more likely to subscribe to a content site that offers personalized experience (source: Epsilon 2022).
According to a recent study by the Reuters Institute for the Study of Journalism, 76% of newspapers in the U.S. now have a paywall, an increase of 16 percent year-over-year. In other words: Internet users are increasingly facing paywalls in order to access information and journalistic content.
Different types of paywalls and how to use them
Publishers use different paywall models to offer customers a variety of digital subscription offerings, and they are generally classified into different levels of attrition.
In this model, a large portion of web content is precluded to non-subscribers. Users who do not complete a digital subscription with the publisher do not have the opportunity to read any of the articles. This type of barrier is uncommon because it implies the risk that readers will leave to seek the information they want to read on another site.
Thus, a hard paywall greatly affects the number of visitors to a website and the bounce rate.
A soft paywall or freemium provides free content and other paid content. Users can read a wide selection of articles on websites with a soft paywall without having to pay a fee or subscribe. However, some special content is offered as premium and thus is visible only to paying customers. This freemium model is the most widely used method of partially monetizing digital content in the newspaper landscape.
Another option that offers a partial paywall is the metered model. The term comes from the word “meter” for “measure,” so a metered paywall is a payment barrier that dynamically adjusts to its users. In general, all content displayed on a website with a metered paywall is free, but each user has a limit, i.e., they can only read a certain number of articles for free, for example, on a monthly basis. According to cookies, when the maximum number of articles is reached, the user must either purchase a subscription or wait until the next month, when they can read the free articles again.
Similar to the metered model, dynamic paywalls is a model that adapts to the behavior of visitors to a website. Publishers can, for example, evaluate data on returning customers and user profiles. In this way, publishers are able to understand reading habits, interests, and the anticipated selection of articles that readers will read each month.
The most unobtrusive payment model to monetize digital content is one based on voluntary donations. This of course depends on loyalty and the strength of the publisher’s Brand, which must really be a “love-brand” for the reader: just think than a million readers financially contributed to The Guardian so that it could stay free and outside of a paywall, either through one-off or ongoing support to help make the newspaper sustainable.
Risks and advantages of using paywalls on your website
Having a paywall means having direct revenue without having to rely solely on advertising or other monetization channels. You will have users who directly target your business to provide regular, predictable revenue through a paid subscription model.
This will lead to having a smaller and more loyal community of customers, thus more valuable than a random selection of visitors.
For example, after years of declining traffic, in 2017 The New York Times reported that it experienced a 46 percent growth in online subscription revenue, totaling $360 million, after installing a paywall.
Of course, however, there are also cons:
- Firstly, the quality of the content must be high and the brand must be strong, otherwise the risk is that no one will want to pay to read it.
- Secondly, surely traffic will decrease, at least in the first phase of paywall activation, until users start subscribing.
- Finally, it is possible that the amount of social sharing will also decrease, precisely because users will no longer be able to share articles that are not publicly usable.