What is a paywall?

A paywall describes a method of re­strict­ing access to online content via a paid sub­scrip­tion. Es­pe­cially digital content providers like news­pa­pers or magazines and their re­spect­ive pub­lish­ing houses use paywalls to monetise their websites. According to a recent study by the Reuters Institute for the Study of Journ­al­ism, 33% of news­pa­pers and weeklies in the United Kingdom now have a pay model in place. In other words: Internet users can no longer read a spectrum of online content entirely for free, and instead are in­creas­ingly being met with paywalls.

In the analogue pub­lish­ing industry, the paywall concept has already existed for a long time in the form of sub­scrip­tions: If you want regular access to current articles and to the contents of a print product, then you have to complete a sub­scrip­tion. Likewise, if you want to pick up your morning paper at the newspaper stand, then you’re expected to pay. In the past, news­pa­pers, journals, and magazines were financed by sub­scrip­tions, retail sales, and ads, and continue to do so to a lesser extent today. In­creas­ingly, pub­lish­ers now also carry this payment model forward to online media.

With a growing online journ­al­ist­ic offering, the revenue made through print sub­scrip­tions and retail sales has decreased, as during the 2000s the greater amount of digital content belonging to online news­pa­pers was still free. In the mid 2010s, a shrinking amount of readers were buying news­pa­pers and magazines at a physical shop: The internet became more and more important for in­form­a­tion gathering, and the behaviour of newspaper readers changed with it. News­pa­pers’ print versions were being bought more rarely. 

Today, journ­al­ist­ic content is for the most part read online. So, pub­lish­ers have had to find a way to monetise their journ­al­ist­ic work online. The solution: payment barriers. Overall, the UK charges the highest average fees for news­pa­pers and weeklies per month, but has the lowest pro­por­tion of titles requiring such payments.

Different kinds of paywalls exist: pub­lish­ers use different models to offer customers a variety of digital sub­scrip­tion offers. Some are so subtle that readers won’t even perceive them as a paywall, while other models act as hard payment barriers that can’t be worked around. Paywalls are therefore clas­si­fied in different friction levels.

In this model, a selection of web content is closed to non-sub­scribers. Users that don’t complete a digital sub­scrip­tion with the provider also don’t have the option to read any of its articles. This kind of barrier is not as common, because when readers stumble across hard paywalls then they’re usually inclined to find the desired in­form­a­tion elsewhere. The risk that otherwise in­ter­ested readers should leave for a com­pet­it­or is therefore very high.

In addition, a tough payment barrier will hugely affect a website’s visitor numbers. For this reason, fewer ad­vert­isers might be prepared to show their ads on these platforms. However, well-known news­pa­pers and magazines with a hard paywall do exist: the Wall Street Journal, the Financial Times and the British Times are among them.

A soft paywall (also known as a freemium model) provides free content and premium offers. Users can read a big selection of articles on websites with a soft paywall without paying fees or com­plet­ing a sub­scrip­tion. However, in­di­vidu­al articles are offered as premium content, and are only visible to paying customers. This freemium model is the most widely used method to partially monetise digital content in the newspaper landscape. While this model is par­tic­u­larly strong in France and Germany, in the United Kingdom this type of paid content is rare, with only 5.5% of pub­lish­ers putting it in place.

Another option that provides a softer payment barrier is the metered model. Stemming from the word “meter” for “measure,” a metered paywall is a payment barrier that dy­nam­ic­ally adapts to its users. Generally speaking, all content displayed on a website with a metered paywall is free, but every user has a cap on the number of articles that can be accessed.

With the as­sist­ance of technical materials (news­pa­pers often use cookies, pub­lish­ers are able to follow how many articles a visitor has read per month. Once the limit has been reached, the user must buy a sub­scrip­tion or wait until the next month, when they’re able to read free articles again. While users can easily leverage on this model, many websites using this model require user re­gis­tra­tion, allowing them to better un­der­stand their readers’ behaviour. In the United Kingdom, the Telegraph launched a metered model in 2013, but in 2016 decided to replace it with a premium digital sub­scrip­tion.

Next to the metered model, different dynamic payment barriers exist, which perfectly adapt to a website visitor’s behaviour. Pub­lish­ers can, for example, evaluate data on returning customers and user profiles. After just a short time, pub­lish­ers are able to un­der­stand their reading habits, interests, and the an­ti­cip­at­ing selection of articles they will read every month.

For a user who returns to the page several times a day to read business news, a dynamic paywall will re­l­at­ively quickly point to the payment barriers. On the other hand, a reader who visits the page just a few times every week and reads only a few articles will continue to be able to read content for free. New York Magazine employs this kind of dynamic paywall and cal­cu­lates the prob­ab­il­ity that a reader will complete a sub­scrip­tion based on data. The challenge is to con­sist­ently deliver value to make sure readers return.

The most un­ob­trus­ive payment model to monetise digital content is one based on voluntary donations. More 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. In this open paywall model, donations are made by readers who value the newspaper’s editorial in­de­pend­ence and com­mit­ment to in­vest­ig­at­ive reporting. While readers can freely engage in all content on the site, a sidebar links to various funding options.

Seven and a half years after the in­tro­duc­tion of its metered paywall, the New York Times managed to acquire more than 2.5 million digital news sub­scribers. This number accounts for 36% of the company’s sub­scrip­tion revenues in the first nine months of 2018.

Paywalls are es­pe­cially prob­lem­at­ic when al­to­geth­er relevant in­form­a­tion and news is sealed behind payment barriers. Critics argue that those with a lower income don’t have the financial means to pay for this kind of premium content. The prin­ciples of the open internet and freedom of speech are buried due to this. In addition, paywalls can also promote digital bubbles, since readers with a monthly digital sub­scrip­tion will be more inclined to read articles written by that source. Moulding public opinion therefore becomes easier.

Paywalls can also have negative effects on the marketing efforts of media providers. Hard paywalls can lead to a decreased number of website visitors. And since fewer users will see ads on this website, ad­vert­isers may instead choose to run their ads with pub­lish­ers employing soft paywalls or metered paywalls.

A host of paywall providers exist for the UK market. Their soph­ist­ic­ated mech­an­isms allow pub­lish­ers to monetise on a single article by employing a paywall.

The German start-up Steady offers paywalls for different kinds of online content. Different mem­ber­ships allow providers to turn everything from articles, podcasts, and news­let­ters into money. Besides the mem­ber­ship option, Steady offers pos­sib­il­it­ies like ad­vert­ising and donation models.

This Dutch company has until recently offered in­di­vidu­al articles for sale in a digital newspaper stand. Via mi­cro­pay­ments, users had access to their articles of choice, without having to commit to a sub­scrip­tion. In August 2019, this strategy was given up in exchange for a premium sub­scrip­tion model. Now, Blendle offers select news articles for a small monthly fee, oriented around the business model of big streaming providers like Netflix and Amazon.

The award-winning sub­scriber man­age­ment and billing platform of MPP Global, eSuite, is designed for the media and en­ter­tain­ment industry to power paid content strategies. It supports freemium, metered, and dynamic paywalls with maximum flex­ib­il­ity, and boasts a client list that includes Sky and NBC Universal.