Paywalls are becoming increasingly more common online, as a way for publishers to monetize from their content, particularly with the continuing fall in print revenue alongside the rise in content consumption online. What's more, they require a user to create an account, meaning valuable first-party data can be collected.
But what are paywalls? What are the different types of paywalls? How can they be used to benefit online publishers? And, most importantly, how can you use a paywall to increase conversions and revenue?
- What is a Paywall?
A paywall is employed by a publisher online to restrict access to content.
Paywalls show a form of value exchange. Namely, that a user gets access to content in exchange for subscription fee. Content is therefore at the heart of the value proposition. What's more, this isn't just the case for press sites and online journalism but for any content-based business. From e-learning platforms and brands to content marketplaces such as YouTube and video streaming sites. monetizing from restricting access to content is becoming increasingly important.
Netflix, for example, has always used a paid subscription model and has benefited from this over the years, allowing them to become a worldwide success and even produce their own video content. The Financial Times is another company well-known for their paywall model. On their website, users are blocked from accessing any content without subscribing first.
Although paywalls are fairly new in the content-producing-world (the NYT only adopted a paywall strategy in 2011), they are now very common and see on a huge variety of sites. Not only is the number of publishers adopting a paywall growing but the amount of content being placed behind a wall is rapidly increasing - in 2018, 1 in 6 articles was blocked by a wall, this went up to 1 in 3 by 2020 (see part 1 here from our Digital Media Review).
2. What are the different types of Paywalls?
Just as there isn’t one type of content-producer, there isn’t just one type of paywall. 4 high level models of paywall exist; soft/freemium, metered, hard and dynamic, although other forms are beginning to emerge and two models can be combined into a hybrid paywall.
What is a soft/freemium Paywall?
In this model, some content is free and accessible to all users whilst the rest is hidden behind a wall and only available to paying subscribers.
An example of this is the French publisher Le Monde. Around 37% of the articles produced are reserved for subscribers only (figure from 2018, according to digiday.com). Without subscription, a reader will be cut off after a few paragraphs and presented with the paywall.
‘The rest is reserved for subscribers’ - Le Monde’s paywall cuts you off with their paywall on premium content.
Premium content is given a yellow tag and placed next to free articles, highlighting the value in subscribing to readers.
What is a metered paywall?
With a metered paywall, all content needs to be paid for, but a reader will be able to access a small number of articles within a certain period, e.g. a month. Publishers will generally tighten their article limit over time to encourage subscription.
The New York Times has a metered paywall, which arguably saved the newspaper from failure. Launched in 2011, it was one of the first of its kind and, with its success in monetizing online, led the way for other online publishers to ask readers to pay for content in the digital era. Readers without a New York Times subscription will only be able to read up to 5 free articles per month, a number which has significantly decreased from the original 20 in 2011.
They’ve additionally integrated a register wall, asking users to register on their site in exchange for one article.
Want to learn more about the NYT’s paywall and how they convert readers into subscribers? Take a look at this article.
What is a hard paywall?
This is the toughest form of paywall where all content is for subscribers only. A hard paywall is a risky wall to use but is often only employed by those who are already successful, with a large readership, or who have a monopoly in their market.
The Financial Times is well-known for utilizing a hard paywall, doing so successfully for 18 years thanks to the unique content focus and specific target audience. Interestingly, however, FT relaxed its paywall during the coronavirus pandemic to capitalize from the surge of online users during lockdown. This allowed readers to sample its premium content that has always been known as too good to not be paid for, leading to FT reaching its end-of-year subscription goals within 3 months.
To find out more, we’ve written an article about the stages of The Financial Times paywall which can be found here.
What is a dynamic paywall?
Unlike the rigid paywall systems that we’ve seen so far, a dynamic paywall segments your audience and allows a publisher to create different paywall journeys for each type of reader. It is a highly data-driven paywall strategy that recognizes that there is no one-size-fits-all system for every individual user. Importantly, the audience can be segmented based on any variant chosen by the publisher, such as propensity to subscribe (user profile), device being used or type of content (context).
This paywall arguably gives you the greatest chance of converting the most readers as each individual can be presented with a paywall that is suited to their behavior and propensity to subscribe. For example, showing a volatile reader a hard paywall as soon as they enter your site will likely turn them away for good. If, however, you tempt them with a free article if they sign up to your newsletter, and another if they fill out a questionnaire, then they might be more inclined to subscribe as you’ve been able to show what content you have to offer.
The Wall Street Journal is perhaps the biggest publisher using this system. Their paywall divides visitors into 3 groups based on propensity to subscribe, presenting them with a paywall journey adapted to their grouping. This isn’t all however. The WSJ dynamic system has also allowed them to teach their paywall to learn from its interactions with users, to the point that it is now over 90% accurate at predicting whether a visitor will subscribe or not.
La Croix International is another publisher that has integrated a dynamic paywall (Poool Access paywall) into their site, allowing them to achieve fast and promising results: not only did traffic on their website rocket after just a few months, but they improved their conversion rate and doubled the number of subscribers within a year.
Here, a volatile reader is offered a free article if they subscribe to one of the publishers’ newsletters.
Thanks to the journey-creation tools in Poool Access, La Croix has been able to create the optimal journey for each of their audience segments as well as personalize the paywall design to match their brand. Luckily for you, Poool has a free demo of their dynamic paywall which you can trial here.
What other types of walls exist?
More varied wall systems are beginning to emerge to match the different goals of content-producers online. Register walls, for example, ask users to sign up/register to a company in order to access their content whereas cookie walls require someone to agree to cookie settings, or accept another option (pay, subscribe, register) on a website before they can access their content.
3. Why employ a Paywall?
The benefits of integrating a paywall are endless and it’s becoming increasingly necessary for content creators to do so, not only to monetize from what they produce but also to compete against others in the market.
1 - Diversify your revenue by converting users into subscribers.
Monetization from a paywall is perhaps the most obvious and important benefit for a business. It can allow you to create new revenue streams by developing subscription offers and premium content for these paying consumers, as well as build on existing revenues such as increasing your subscriber-base. In particular, with a dynamic paywall, your audience will be more likely to subscribe as you can provide the most optimal paywall journal to suit their behavior. This article on converting readers into subscribers is especially insightful if you’re looking into or starting to use a paywall.
2 - Achieve multiple goals simultaneously
As we’ve learnt, a paywall could be employed to not simply encourage subscription but also to increase engagement, collect 1st party data and get users to register on your site. Given this, make your paywall strategy fit with your goals, your users and the context of your business. In doing so, through using a paywall, you can achieve so much more than simply increase your subscriber-base. If you’re interested in trying out a paywall strategy, why not make use of our free demo and see how beneficial a paywall could be to your business.
3 - Learn about your audience and their behaviors
As users login and interact with your paywall, you’ll be able to collect first-party data, learning about how they behave and what makes them subscribe. This can prove extremely useful and not only allow you to make your paywall as optimal as possible, but also support decisions in other areas of your business. The WSJ’s paywall for example has been taught to learn from its interactions with visitors to the site, allowing for full optimization of their dynamic wall.
4. Where do I start?
So now you know what a paywall is and the different types, but how do you begin to integrate one into your site and strategy?
First and foremost, there is no one-size-fits-all paywall. Every content creator is different and so, although this is a good place to start, remember that you need to tailor this to you, your audience, and your goals. Keeping this is mind, we’ve come up with some starting points and questions to ask yourself at this stage of paywall integration.
- Which paywall best suits you? How can you fit this paywall system into your goals? This mostly depends on: your goals, your monetization model (a hard paywall wouldn’t be recommended if you rely heavily on ad revenue) and your maturity as a business (again, hard model’s would be risky for a new content publisher as users don’t know you nor understand your value)
- What is your value proposition? How can you show this to your audience? Construct a subscription offer that is enticing to your audience and will encourage engagement. Take a look at this white paper on value proposition and subscription offers for more information.
- Ensure that your premium content is of a high quality. A user will only pay (and continue to do so) if they believe they are getting a good value exchange.
- How visible is your premium content? What percentage of your content is premium? In our Digital Media Review, we found that more and more content is being placed behind a paywall. This is with good reason as if you only block a small amount of content, users won’t see the value in subscribing as they already have access to the majority of your content.
- Who are your audience? How do they behave? How likely are they to subscribe?
Remember that the paywall is only the tip of the iceberg (a tool). You should begin by focussing on these key aspects of your strategy (image from this white paper)
If you’ve established your strategy but still aren’t sure where to go next, maybe launching a paywall and A/B testing it on fans-only is a safe place to start. This approach will allow you to see if readers are willing to pay for your content, without taking too big a risk, particularly for publishers with an advertising model as this will have a limited impact on ad revenues. Poool can help with this. Our dynamic paywall Poool Access allows you to segment your audience, configure journeys, A/B test and analyze results, making changes with ease where necessary.
5. Best practices
To end this article, we thought we’d throw in a few of our top tips for ensuring you get the most out of a paywall. Of course, as mentioned, keep in mind that your paywall needs to be optimal for you and your strategies, not anyone else's.
- Try to find a paywall solution that allows for easy testing and analysis of user behavior. A paywall can tell you a lot about your readers aside from simply helping you to monetize. The more you know about your users’ behavior, the more you will be able to optimize every part of your site and strategy. So measure KPIs, analyze tests and adapt accordingly to ensure continuous optimization of your strategy.
- Make everything easy for the user. We all know that the more steps needed to do something, the less inclined we are to do it. If you make the subscription process long and require a user to fill out a huge form, they are more likely to give up halfway and not complete the process. Make everything, from signing in/creating an account to payment quick and easy to achieve. We recommend limiting the number of steps towards conversion and using a well known and reliable payment method such as Paypal or ApplePay.
The FT and The NYT have made it quick and easy for a reader to register and subscribe.
- Think about this insight #5 from our Digital Media Review: The pressure created by a paywall has an impact on both the conversion rate and on the frustration held by readers. This suggests that a balance needs to be found between the two. Design your paywall so that you put pressure on a user to subscribe, but be careful not to tip it over the edge to the point where they become frustrated and leave the site. But how? Measure KPIs, work on paywall visibility rate, optimize paywall branding/UX, improve paywall content (text, etc) and the value proposition as well as allow readers to explore your content and offers.
For more tips, tricks and paywall examples in action, have a browse of Poool’s blog. This collection of articles is particularly interesting to look at, as we study the conversion journey of various content creator sites, including on Netflix, Wired and Audible, amongst others.