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Paywalls and Subscriptions

Report: Paywalls Rising, But Free News Still Reigns

The Reuters Institute has released its 2019 report on the state of pay models in online news, and the findings paint a bright picture for today’s digital-first publishers. It turns out, more publishers are putting up paywalls and making subscription revenue a key priority, even as digital advertising holds steady as a reliable source of revenue for news organizations around the globe.

In surveying more than 200 leading news organizations in seven markets in the U.S. and Europe, researchers found that usage of paywalls is increasing among online publishers, but the use of digital advertising also remains high. Despite the bulk of digital advertising revenue now being claimed by large technology companies, like Facebook and Twitter, 81% of news organizations still say digital advertising is a key source of income, followed by subscriptions (78%), and native advertising (75%).

Of all the revenue models tracked in the report, subscriptions seem to be growing the fastest. More than half of the executives surveyed in the Reuters Institute (52%) expect subscriptions to be their main revenue focus in 2019.

Looking more directly at major newspapers, Reuters Institute found that 69% of those organizations have paywalls of some kind, which is a slight increase since 2017.

The past 12 months have been a difficult time for legacy news companies, particular newspapers, as advertising revenue has continued to decline. Although fears about the potential of paywalls to limit access to quality journalism are widespread, the report found that those fears are not quite borne out. Hard paywalls are still rare, with just 3% of the organizations surveyed by Reuters Institute having hard paywalls on their websites, which prevent non-paying subscribers from accessing any content at all. What’s more common are porous paywalls or dynamic paywalls, which only go into effect once a visitor has read a certain number of articles each month.

For the study, Reuters Institute looked at the business practices of 212 news outlets, including newspapers, weekly newspapers, magazines, broadcasters, and digital-born news outlets.

Other key findings in the report include:
• 69% of the newspapers in the sample operated some kind of a pay model, which is a slight increase from 64.5% in 2017.
• Almost all digital-born news outlets (94%) in the survey say they offer free access to the news.
• Of those news organizations that operate some form of paywall, fees range from $2.25 to $46 per month. The average subscription price is $15.80 per month.
• Top newspapers and news weeklies in the U.S., Finland, France, Germany, and Poland were more likely to have adopted pay models than those in Italy and the U.K.

Key Takeaways for Digital Publishers

Digital publishers are asking what these findings mean for them, and how they can use the data from the Reuters Institute report to improve their own business practices.
For starters, the report’s analysis of average subscription prices lays a framework for publishers who struggle with deciding what to charge their readers for access. Given that the average subscription price in the survey is $15.80 per month, digital news outlets should be able to comfortably price their subscriptions at anywhere from $10 to $20 per month, depending on the volume of content they publish online.

With a growing number of publishers now charging readers to access digital news, publishers should feel even more comfortable launching their subscription programs and putting up paywalls. Just be sure not to put up a paywall without first cultivating a wider range of revenue sources. For example, selling native advertising, e-commerce products, and hosting live events. These were all cited as profitable strategies in the Reuters Institute survey.

If one thing from the report is clear, it’s that paywalls aren’t going anywhere. The strategy of locking down online content and requiring readers to pay for access is one that more and more publishers are adopting. The strategy is seeing particular growth in the U.S., where paywalls are far more common than in Europe.

To read the full report, Pay Models for Online News in the US and Europe: 2019 Update, click here.

Intelligent Paywalls

What Are Intelligent Paywalls?

The latest trend in digital publishing involves using artificial intelligence technology to create intelligent paywalls that adapt based on reader behaviors and interests. Are you ready to give this strategy a try?

It’s hard to believe that nearly a decade has passed since publishers first started implementing paywalls on their websites. Originally, paywalls were created as a way to promote subscription sales and increase digital news revenue, after signs that ad rates would soon be shrinking.

Publishers believed that by preventing readers from accessing content on their websites for free, they would push those readers into becoming paying subscribers. The fault in that logic, however, was that visitors can’t see for themselves how great the content actually is behind paywalls. Without knowing what kind of quality content is hiding behind a paywall, website visitors aren’t effectively persuaded to subscribe. These challenges led digital publishers to explore different paywall strategies.

We’ve covered the latest paywall strategies extensively here at Web Publisher PRO. Porous paywalls, metered paywalls, hard paywalls, dynamic paywalls—we have seen publishers have great successes, and failures, with each of these strategies.

Now, a report from FIPP and Innovation Media Consulting, looks at an entirely new paywall strategy that could shape the next wave of digital media startups. So-called intelligent paywalls are being used by publishers who are interested in developing multiple revenue streams, and they have the potential to change online publishing as we know it.

What are intelligent paywalls?

Publishers with intelligent paywalls are relying on artificial intelligence (AI) to create paywalls that adapt to visitor behaviors. Intelligent paywalls can be setup to restrict access to content for certain website visitors, even while giving other visitors unrestricted access to the same articles or website sections.

Intelligent paywalls are really a response to the one-size-fits-all approach that digital publishers have been using, with mixed success. Intelligent paywalls are also called adaptive paywalls, hybrid paywalls, or flexible paywalls.

One of the best examples of a large news organization that’s utilizing intelligent paywalls is the Wall Street Journal. The publisher spent years refining its machine-learning algorithm to track visitor activity and adjust its paywall flexibility based on variables like visit frequency, depth of read, preferred devices, and preferred types of content.
In an article in The Drum, WSJ Analytics Manager John Wiley said these variables contribute to a “propensity score” that relates to a website visitor’s likelihood of subscribing. Certain website visitors get more free articles than others, usually within the topics they’re most likely to care about. The WSJ’s algorithm is capable of predicting when certain readers are most likely to convert, and its intelligent paywall is designed to capitalize on that information.

Other publishers use variables such as reading histories, website visit times, and number of email newsletter subscriptions to personalize their intelligent paywalls.

Intelligent paywalls take all of these variables into account in an instant, as they time their calls-to-action and set unique prices or discounts to incentivize users to take action at the precise moments they’re most likely to convert. Website visitors might also see unique messaging on the creatives they’re being shown as they hit the paywall each time.

Being able to understand which website visitors should be shown which marketing messages, and what the right combination of tactics is at any given time, is at the heart of data-driven audience acquisition, and it’s really what intelligent paywalls are all about.

Are intelligent paywalls hard to implement?

The answer to this question depends on the publisher that’s asking. Unlike traditional hard paywalls, which block out any visitors who haven’t input their subscription credentials, intelligent paywalls have to be developed using AI technology. That technology is expensive, especially for a publisher that needs customization. Because of that cost, it’s unlikely that intelligent paywalls will become mainstream among the smallest local publishers, at least in the immediate future.

What we’re more likely to see is intelligent paywalls taking off among larger digital news organizations and among the most tech-savvy publishers. Large media organizations are more likely to have the manpower necessary to implement intelligent paywalls, while tech-savvy publishers have the technical expertise necessary to design their own flexible paywalls using similar techniques.

Have you thought about implementing an intelligent paywall on your own website? If you’d like to learn more, reach out to our team at Web Publisher PRO for a one-on-one consultation.

Best Paywall Strategy

Metered, Hard, or Dynamic? Choosing the Best Paywall Strategy

The rise of the paywall has been well documented. While most digital publishers understand the value in restricting content to promote their subscription programs, there is still debate within the publishing community about which paywall strategy works best.

With advertising rates on the decline, digital publishers have largely turned to subscription programs to generate revenue and keep their publications afloat.

Unfortunately, what most publishers found as they implemented their subscription programs is that readers—even loyal readers—will not pay to subscribe to a publication without some sort of impetus. Publishers that were giving away content on their websites for free have discovered that cutting off the stream of available content is one of the fastest ways to boost subscription rates.

But what happens when you cut off all the content? Sure, loyal readers who know what they are missing might be encouraged to subscribe. First-time readers, on the other hand, are actually less likely to subscribe when a publisher restricts all free access to articles.

Finding a happy medium here has been harder than publishers anticipated, which is why there is still so much debate within the community about which paywall strategy is best.

Defining the Paywall Strategies

Hard Paywalls

The most restrictive paywall strategy for digital publishers is the hard paywall. In a publication with a hard paywall, non-subscribers are restricted from accessing any content without first subscribing or paying on a per-article basis.

Pros: Hard paywalls tend to be the most difficult to get around, which is a feat in today’s digital environment. Loyal readers are most likely to subscribe to a publication with a hard paywall, since they won’t be able to access any content—even five or 10 articles per month—without first signing up for a subscription.

Cons: The biggest downside of the hard paywall strategy is that non-subscribers can’t see what great content they are missing out on. Publishers can’t “hook” new readers with their great reporting if those readers can’t access that reporting. Hard paywalls can also lead to a sharp decrease in page views, which is a problem for publishers who rely on advertising revenue of any kind.

Metered Paywalls

With a metered paywall, website visitors can access a certain number of articles per month for free before they are cut off from access. The only way to read more articles past that point is to pay for a subscription. The New York Times is one of the most well-known publications to adopt this approach.

Pros: Unlike hard paywalls, metered paywalls encourage new readers to subscribe. With a metered paywall, casual readers get hooked on the publication’s top quality content, and then once they see the value, their access is revoked and they’re required to pay for more.

Cons: The metered paywall strategy is ripe for fraud. Whether it’s through the use of extensions, private browsing apps, or other widgets, readers who want to find a way around metered paywalls can surely do so.

Dynamic Paywalls

The dynamic paywall is a newer approach, pioneered by digital-first publications. Whereas a hard paywall restricts all non-subscribers, and a metered paywall places the same limitations on all non-subscribers, dynamic paywalls are designed to lure in readers who exhibit specific behaviors that suggest they are likely to subscribe to the publication. For example, when New York Magazine launched its dynamic paywall strategy last year, the company setup its paywall to appear more quickly for readers who spend lots of time consuming news across all of the company’s websites.

Pros: The dynamic paywall strategy is solely focused on data. Publishers are relying on website analytics and tracking data to pinpoint the readers most likely to subscribe. This strategy also lets the publisher soften or strengthen the paywall depending on advertising commitments. If the publication is running an important display advertising campaign one week, then the publisher might loosen up the paywall to allow enough readers in to drive scale.

Cons: Dynamic paywalls are sometimes considered to be too opaque. Although the idea is to optimize audiences and traffic, whether those goals are ever realized can be difficult for publishers to track.

Have you tried these paywall strategies at your publication? We’ve love to hear which paywall strategy you think works best for digital publishers today.

Paywalls

When Should Local Publishers Use Paywalls?

Do they work, or not? It seems like everyone in the local news business has an opinion on using paywalls as a strategy to generate revenue. If you read news online, you’ve no doubt run into a paywall yourself.

Paywalls are a useful tool for encouraging people to subscribe by restricting access to content. Visitors who have not paid for access run into virtual walls when they try to read certain stories on publishers’ sites. The only way around these virtual walls, in many cases, is to become a paying subscriber.

Although paywalls have been in effect for more than 20 years, they really started picking up steam within the digital news industry after The New York Times instituted its paywall in 2011. In that incarnation of the paywall, non-subscribers were blocked from accessing content after reading 20 articles per month. (That number has since been reduced to 10.)

In the years since The Times launched its paywall, the tool has become more common, especially as hyperlocal news publishers began instituting their own subscription programs. The Times now generates more than 20% of its revenue from digital-only subscriptions, which is something that hyperlocal news publishers would love to replicate.

Who Needs Paywalls?

In an analysis by the Columbia Journalism Review, news sites with higher traffic were more likely to implement paywalls than younger sites with less traffic. The most popular paywall strategy, in that same analysis, involved using metered access for non-subscribers, with just one or two exceptions. (For example, visitors could still access articles when they clicked on a link from social media.)

Paywalls are most useful for publishers trying to build their subscription programs, but they can have their downsides, too. Placing content behind a paywall can drive down pageviews, which limits advertising revenue. Restricting too much content can also make it hard to build an online community, and some readers might be so turned off by the restrictions that they stop visiting a site altogether.

Which paywall strategies are most effective?

To overcome those obstacles, some publishers favor what’s known as “leaky paywalls.” Leaky, or porous, paywalls are something that visitors can get around. The Times’ strategy of giving away 10 free articles to readers each month is one example of the leaky paywall strategy. Other publishers have loosened the restrictions on certain types of articles—for example, bringing down the paywall on breaking news stories and during local emergencies.

Removing a paywall for certain readers or reader segments is a form of promotion, and when it’s done in the right way, the strategy can encourage repeat visits and boost subscription rates.

One strategy that’s flown under the radar among local publishers is the dynamic paywall strategy. Dynamic paywalls are flexible based on the individual or segment trying to access an article. For example, a publisher may restrict content that a non-subscribing reader has been highly-engaged with, even while that same content remains available to a first-time reader. Dynamic paywalls are most popular among digitally savvy publishers who are well versed in web analytics.

Another strategy that some publishers are using involves tracking the time readers spend on their sites, rather than the number of articles they consume. Introducing paywalls on a section-by-section basis—for example, limiting access to articles on a particular topic after a reader has spent a certain amount of time reading about that topic—can encourage readers to explore new areas of the website. In that case, the paywall is serving as a redirection tool more than a blockade.

Do paywalls actually work?

That’s the million-dollar question. Publishers tend to have the most success with paywall strategies when they cater to a young, highly-educated, high-income audience dominated by males who identify as Democrats. According to the American Press Institute, news readers in this group are twice as likely to subscribe to large metro news outlets as other subscribers. The further a publisher strays from that audience segment, the more challenging it’s going to be to successfully implement a paywall strategy.

Questions to Consider Before Adopting a Paywall Strategy

  1. What goal am I trying to achieve?
  2. Does my website have enough traffic to make a paywall strategy sustainable?
  3. Could a paywall stymie my publication’s efforts to generate community engagement?
  4. How will my paywall strategy encourage visitors to become paying subscribers?
Premium Content for Publishers

3 Rules for Generating Revenue with Premium Content

The notion that readers won’t pay for news is a myth. Local publishers around the country are finding that readers are willing to pay for access to premium content.

According to research by the Media Insight Project, an initiative by the American Press Institute and the Associated Press-NORC Center for Public Affairs Research, 53% of adults already pay for news and 26% of those who use a source for free would be “at least somewhat likely” to pay for it if they were asked.

Local news websites that publish compelling, original content have a valuable product, and yet oftentimes that product is being given away to readers for free.

Coverage of a specific topic is the No. 1 reason why people start subscribing to news sources, according to the Media Insight Project. This is a particularly important point for hyperlocal publishers, because in many communities their websites are the only sources of truly local news. In these towns, readers are showing that they are willing to pay for access to content and information that’s unavailable anywhere else.

Publishers who have found the most success in using premium content to generate revenue are following these three basic rules.

Rule #1: The content must be incredible.
In order to justify the price tag, publishers should make sure their premium content is compelling, original, and valuable to readers. It isn’t enough to have information that readers can’t find elsewhere on the web—although that is important, too. Publishers must package their premium content in a way that makes it irresistible to readers. That means including infographics, images, and videos whenever possible.

Look at The Atlantic. The Atlantic isn’t the only publisher covering politics, business, culture, and technology, but the company has found a niche in publishing the type of thoughtful, long form journalism that readers can’t get anywhere else. The Atlantic’s digital-only subscription cost $24.50 per year, which is the same as its print-only subscription.

Rule #2: Premium content can be a commodity.
When most people think of premium content, they think of paywalls. That’s for good reason. The majority of publishers with premium content utilize a subscription model that requires readers to pay on a monthly or yearly basis for access to articles. But premium content isn’t just about dollars and cents. Or rather, it isn’t about that directly.

Publishers with membership models or subscription models can also trade premium content in exchange for valuable data about readers. The Economist is a great example of an outlet that does this. The Economist sells a digital-only subscription that costs $12 for 12 weeks, as an introductory price. But readers who haven’t become paying subscribers can still read three articles per week when they sign up to receive free daily newsletters.

It might look like The Economist is giving away content for free, but in exchange, the publisher is getting into its readers’ inboxes each day. Within those emails, publishers can target readers with paid ads and additional solicitations to sign up for paid subscriptions.

Rule #3: It can pay to give away something for free.
Readers need to know what they’re missing. Hiding all of the best content behind a paywall will make a publication stagnant, which is why most hyperlocal publishers using premium content models are inclined to give some content away for free.

The sweet spot here is pinpointing the exact number of articles or amount of content that it takes to persuade a reader to pay for more. Many digital publishers let readers access a certain numbers of articles for free each month before putting up a paywall. The New York Times, for example, lets readers access 10 free articles per month. Many hyperlocal publishers have dropped that number to three.

The Ken is an independent site that publishes one original article from India every weekday. The Ken gives away four stories per month. For anything beyond that, readers must sign up for paid subscriptions. It’s made clear on The Ken’s website that articles “are not free,” and that the site’s staff puts a lot of effort and resources into its content.

Some publishers don’t feel like giving away a pre-determined number of articles to readers each month is a good value proposition. Instead, these publishers have decided to manually determine which content is “premium” and which content should be accessible to all readers for free. This is the strategy behind local publishers who allow complete access to news and sports articles, while still placing features and opinion stories behind a paywall.

The upside to this strategy is that it’s usually harder for readers to game the system when certain articles are available for free and others are available only paying subscribers. The downside to this strategy is that a site’s best content—the very content that’s most likely to inspire readers to sign up for more—is usually locked away behind a paywall. That’s not a great practice from a reader acquisition standpoint.

If you’re interested in learning more about the latest premium content strategies, feel free to reach out to us for more information.