Paywalls In Newspapers: Are They Profitable?

Paywalls are often used by digital periodicals and papers to commercialize their platforms. This technique assures that readers cannot access all of a website’s material without first purchasing a membership.

Types of Paywalls

1. A hard paywall—The paywall allows users to view one or two articles for free before prompting them to pay for a membership when they try to open the next one. This could be difficult because site visitors may exit the page without further actions.
2. A metered paywall— Visitors are allowed to view a specific number of articles like 5 or ten before the restrictions appear.
3. A Freemium paywall—The restrictions mean a visitor can view articles and see adverts, although premium content is restricted by a paywall.

According to the strategy taken by organizations that use a hard paywall, like the Financial Times, paywalls provide significant revenue to the media houses. Since the late 2000s, the newspaper business has been in a state of decline, with dwindling subscriber and advertisement income.

To counter the decline, they had to find a way to add revenue, settling on subscriptions. The online paywalls include a digital subscription to the newspaper’s content. Today, a significant number of readers subscribe to any of the three formats, depending on the financial capacity.

In most cases, the subscription to a paywall is dependent on the organization’s reputation and availability of exclusive news articles. For organizations with minimal exclusivity, they have experienced losses after implementing a paywall for the online material.

One of they key issues faced by the organizations in ad revenue. Whereas subscription services have been a success for some news outlets, the cumulative outcome of a paywall on digital revenue has been negative for many others, as a sharp decline in digital ad revenue due to the reduced visits to their webpages effectively cancelled the freshly created digital subscription revenue.

Overall, prominent newspapers with exclusive content are likely to fare better with the paywall model. Before adopting the subscription services, the media house should consider the effects on their incomes.