The different types of paywalls (and how publishers use them)
Earlier this month, @CJR published an article titled, “What the pandemic means for paywalls,” which talks about the dilemma faced by many large publishers about which content to put behind the paywall and which to keep freely available in public interest.
“Journalism is, at its core, a public service,” Joy Mayer, the director of Trusting News, a research and training project that promotes journalistic credibility, said in the article. But for any newsroom with a paywall, “There is always going to be tension between financial sustainability and the desire to offer that service in a way that is accessible to everyone.”
Paywalls started showing up on the Internet only in the mid-2010s. Long after standard banner ads, as an alternate means for publishers to generate revenue. Declining revenues from print and the rise of adblocking were both contributing factors for the growth of paywalls.
In this post, we’ll explain what paywalls are, the advantage and disadvantage of various paywall strategies, how effective paywalls are, and whether or not it’s the right strategy for your website.
A paywall is a mechanism for restricting access to content, especially news, by offering it via purchase or paid subscriptions. More broadly, paywalls can also be seen as a form of value exchange between a publisher and its audience. Despite the name, not all paywalls necessarily require a monetary exchange. For example, an adblock wall (a subset) can persuade readers to whitelist a particular website. Publishers might also offer access to content in exchange for users providing their email address. Or sharing content on social media.
Hard paywalls require a paid subscription before providing access to any content. They are usually the most difficult to circumvent, but also the riskiest strategy overall. Hard paywall examples include The Times and Financial Times.
It is known that websites that implement a hard paywall lose a significant chunk of their audience. Users can exit the site and find the information they’re looking for elsewhere. Jimmy Wales, the founder of Wikipedia, has argued that using a hard paywall diminishes a site’s influence, and that by implementing a hard paywall, The Times “made itself irrelevant”.
- Advantage: Users cannot circumvent hard paywalls
- Disadvantage: Riskiest paywall strategy, most users will abandon the website
In contrast, soft paywalls allow users to access some digital content based on criteria that is decided by the publisher. The idea is to allow visitors to experience the quality of the content before requiring them to purchase a subscription. The New York Times uses a soft paywall. It is frequently cited as one of the most successful digital subscription programs.
Soft paywalls are often “metered.” Meaning they allow access to a set number of articles before restricting access to content. Then, nudging the user to buy a subscription. The metered model is less disruptive than hard paywalls. It allows the publisher to entertain casual visitors. While also being able to use the larger visitor data set to run tests and fine-tune the metering.
Publishers who use metered paywalls pay close attention to something called “stop rate.” This is the percentage of total visitors that eventually hit the subscription paywall after exhausting their weekly or monthly limit of free articles.
Soft paywalls also tend to be more “leaky” or “porous.” Meaning that they allow certain technical conditions that enable users to access content beyond their metered quota. For instance, when a user deletes their cookies or visits the site in incognito mode.
- Advantage: Allows publishers to entertain most casual visitors
- Disadvantage: Only a smaller subset of users eventually turn into paying subscribers
In addition to hard and metered (soft) paywalls, some publishers also selectively restrict access to premium content. Keeping the majority of the content open and free to access. One publisher that uses this strategy is eMarketer, wherein they publish report summaries and articles that are free to access, but users must pay to get the full reports.
The freemium paywall allows publishers to use both the ad-supported and subscription-based revenue models in conjunction. Therefore, have something to offer to all types of users based on their individual preferences related to content consumption.
- Advantage: Allows publishers to offer something for all types of visitors
- Disadvantage: Only a smaller subset of premium content is monetized
Hard and metered paywalls follow relatively simple models that decide when the paywall should appear. Dynamic paywalls go deeper and present subscription requests and pop-ups only when the probability of a visitor converting into a paying subscriber is discovered to be high.
To do this, dynamic paywalls analyze data related to visitor frequency, reading habits, and interests to correlate and predict how likely they are to turn into a paying subscriber. The New York Magazine employs this kind of a dynamic paywall.
- Advantage: More likely to accurately identify users who are likely to become subscribers
- Disadvantage: Implementation is more complex relative to hard and metered paywalls
Most publishers have an adblock rate between 10-40%. Not having a strategy in place to engage this audience means leaving revenue on the table.
One of the ways in which publishers engage their adblock audience is by setting up an “adblock wall.” With the intention of educating users about the business need for advertising revenue and convincing them to whitelist a website. If the user accepts the whitelist request, the publisher can continue to serve advertising and generate revenue.
Although there are exceptions, most adblock walls function as “hard paywalls” for adblock users and suffer a high rate of page abandonment. Adblock walls also tend to be ineffective when set up as a soft or metered model. This is because it’s usually easier for users to dismiss the notice instead of complying with the request to whitelist.
- Advantage: Offers a way for publishers to communicate with their adblocked audience
- Disadvantage: High rate of site abandonment, users can easily dismiss the whitelist request
Server-side vs. client-side
Paywalls can be either server-side or client-side. Based on where the decision of whether or not a particular user gets to see the content happens. With client-side paywalls, the content is delivered but hidden out of view, making it easier to circumvent. Server-side paywalls are almost impossible to get around. However, since search engines crawl and index web pages based on the content that is publicly available, using them might lead to reduced coverage in search.
Thankfully, there is a lot of data and industry opinion on the subject of how effective paywalls are. More importantly, the various factors that affect the chances of success or failure.
The Canadian Media Research Consortium (CMRC) found that of the 1,700 users that were surveyed, 92% would rather find a free alternative than pay for content on their preferred site. An earlier research by Pew Research Center found that 82% of Americans hold the same opinion. Based on public opinion, the CMRC study concluded that given the “current public attitudes, most publishers had better start looking elsewhere for revenue solutions”.
A quick look at Google Trends shows the growing popularity of the search keyword “bypass paywalls”, which is almost exclusively Internet users trying to circumvent them.
Despite general reader perception, the use of subscription-based revenue models is growing among publishers. A study from Reuters Institute showed that more than two-thirds of leading newspapers (69%) across the EU and US were operating some kind of online paywall as of 2019. With the average price for paywalled news at $15.75/month.
The general industry consensus about hard paywalls is that, with very few exceptions, they are hard to sustain and that the negative effects (loss of readership) outweigh potential revenue.
Other approaches, such as metered, freemium, or dynamic paywalls have been successful for many premium publishers. However, success is strongly correlated with the following factors:
- Targeting a niche audience
- Providing unique, exclusive, or highly valuable content
- Having significant insight and data related to users’ reading habits and preferences
- Testing and choosing the right paywall delivery strategy
There’s a better way to engage adblock users
When publishers first started setting up adblock walls to engage their adblocked audience, a lot of users just saw it as another annoyance and wondered why their ad blocker couldn’t simply block the whitelist request pop-ups. Here’s an article Vice wrote about it.
While most ad blockers have the technical capability of blocking adblock walls, they don’t want to limit the publisher’s ability to communicate with its own audience. Although uBlock Origin has said that it will block adblock walls that are not “dismissable”, and are therefore anti-user.
The 2017 PageFair Adblock Report revealed that when presented with an adblock wall, 74% of the users simply leave the website. The high rate of page abandonment is the most problematic aspect of using an adblock wall. Even if a publisher manages to convince a small segment of their adblock users to whitelist the site, the majority will simply ignore the request or walk away.
Blockthrough enables publishers to recover their adblocked revenue using Acceptable Ads, a standard that defines a light, non-intrusive ad experience that excludes the most annoying and interruptive forms of ads such as video ads, animated ads, and ads that obstruct content. Acceptable Ads has a <90% opt-in rate among adblock users, making ad revenue recovery via Acceptable Ads one of the most direct and efficient ways to monetize adblocked traffic.