Paywalls are barriers that restrict a user’s access to premium content at a given website and usually charge a fee or offer a subscription model, to those willing to gain full access. Since their introduction, paywalls have become a popular source of revenue for online businesses, especially news agencies that have started banking on online readership in the wake of the significant reduction in print readership. The subscription-based model of revenue has found success with numerous newspapers around the world like the Boston Globe, The Athletic, The Guardian, The Spectator, etc. but there are also those news outlets that think paywalls will make business difficult.
As mentioned already, paywalls are a source of necessary revenue and the access to the content of such websites depends upon either direct purchase or subscription to the service. Websites that follow paywall models vary in ways they offer services; there are many news agencies or academic websites that offer limited access to their content in the form of free access to a certain amount of articles per month, a soft paywall design. A hard paywall design – another type of paywall – is more strict in providing access to its content, such websites work on subscription first policy and content later.
Even though many websites have found success in the subscription model, it is generally considered that experimenting with revenue models is the only sure way to keep generating revenue for online businesses. What works now will indeed become redundant tomorrow or what might not work today becomes a potential jackpot tomorrow.
As is with every case, paywalls might allow you to form a dedicated base of users, but these websites still receive many unsubscribed visitors that are greater in numbers than the already existing subscribers. Given that, it is obvious there is a large number of users that are not interested or don’t have the means to afford the paywall models. This situation has created an opportunity to come up with a solution to bank on its potential. The freemium model or the case of giving free access to a certain number of articles per month is a step towards bridging the above-mentioned gap.
Now, there is another situation looming over the head of such websites. The demand for paywall labels for a better user experience in accessing information has taken up a contentious position on the internet. As was highlighted by this recently conducted poll, a staggeringly high percentage (just over 67%) had preferred the idea of a label and found the service to be of great use. The argument for greater transparency is valid, but it can create challenges for such websites that are already adapting themselves to a newfound way of generating revenue through paywalls. The demand of users facing friction in accessing information and the consequent frustration has allowed them to voice their uneasiness.
The paywall labels will filter and label both the free and paid content in the search results page that will enable the user to skip over the content and direct their attention towards smaller sites that provide similar information with free access. This simply does not bode well for sites that run on hard paywall designs and subscription-based revenue structures.
Unless they find a way to get around it, in theory, these online businesses should get most affected by paywall labels if they stick to hard revenue models such as The Boston Globe, Wired, Handelsblatt, The Financial Times, and The Athletic to name a few.
As an option where all parties are satisfied, the current best thinking would see an adaptation to hard paywall structures and opening up towards a more inclusive premium model that allows both those that signed up and casual visitors enough quality content to continually generate traffic and create new subscriptions going forward.