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How to Choose the Right Paywall Strategy for your Content Business

Published on 19 Jan 2023 | Team ConsCent | 8 mins read

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It can be difficult for publishers to generate significant revenue from digital advertising alone as it becomes increasingly fragmented. This is why many publishers worldwide are looking for sustainable revenue models for their businesses and exploring various paywall strategies and solutions to generate direct revenue for their readers.

Some of the first movers have painstakingly built a massive subscriber base, such as The New York Times and The Financial Times. For years, their teams have been experimenting with multiple methods for understanding their users, scoring them for engagement levels, and matching the right offer to each user's intent. However, publishers cannot afford to wait years before figuring out the best paywalling strategies for their media business in this rapidly changing market.

Our blog answers some of the most frequently asked questions about figuring out a paywall strategy for your media business. Read it to the end for a step-by-step guide. Let’s begin with understanding;

How do paywalls work?

How do paywalls work

Paywalls are a method used by news publishers to limit access to their content. Typically, they require readers to subscribe to a website or pay a fee to access articles. They may also offer limited access to certain stories or sections of their website. Paywalls can increase revenue and encourage readers to become loyal subscribers. They also help to protect the publisher's content from being shared or copied without permission.

Paywalls mimic the classic offline practice of readers paying for newspapers or magazines in exchange for information.

Using a payment gateway, publishers can create their paywall. A paywall, however, serves more than just collecting payments. You can use intelligent paywall solutions to analyze your user's behavior and serve them better in the future based on the information you collect about them.
For that, publishers need paywall solution providers such as ConsCent, a full-stack user lifecycle management platform for news publishers. Talk to an expert!

Why do websites have paywalls? Are they effective?

Websites have paywalls because they need to generate revenue. With a paywall, they can charge readers for access to their content. Paywalls can be effective if they are used correctly. They should be used to generate revenue while still providing value to readers. This could include offering ad-free content, exclusive access to certain articles or features, or micropayments for premium content.

Digital publishers have flocked to subscription products in recent years to establish more sustainable business models and better serve their audiences' needs and interests. Any subscription product offered by publishers runs on paywalls. They are the most effective way for online publications to generate revenue from their content.

With a digital user’s paying propensity rising yearly, paywalls are crucial to diversifying revenue generation methods. Here are some common ways to maximize revenue using them:

  1. Offer Exclusive Access: Offer exclusive access to premium content or services to people who pay for it.
  2. Offer Tiered Subscriptions: Create multiple subscription levels with different prices and features. This will make it easier to target different types of customers.
  3. Introduce a Freemium Model: Offer basic content or services for free while providing premium features or services with a subscription.
  4. Offer Time-based Subscriptions: Offer subscriptions that are limited to a certain period. This can help encourage people to renew their subscriptions, as they won’t want to miss out on the content they paid for.
  5. Offer Ad-Free Access: Give people the option to pay for ad-free access. This will attract people who don’t want to be bombarded with ads.
  6. Offer Special Deals: Offer special deals to people who have been subscribers for a certain amount of time. This will help encourage loyalty and ensure people continue to pay for your services.
Create, customize, and monitor your paywalls using ConsCent's Paywall Builder

What are the different types of paywalls?

#1 Hard Paywalls

Hard Paywalls

A hard paywall is a website content access system in which all content is blocked from view unless a user pays for access. This type of paywall does not allow free access to content, no matter the user's prior engagement with the website. Despite forcing people to subscribe or leave, a hard paywall prevents "freeloaders" from getting access to premium content.

This paywall works best for publications with niche and valuable content, such as research papers. Publishers such as The Economist, Financial Times, and Wall Street Journal successfully use hard paywalls.

Attitudes Toward Paywalls
Source: NRG_Toolkits_Digital_Pub_Subscriptions

However, hard paywalls may not be the right fit for you if you are a niche publication looking to encourage new sign-ups and expand your subscriber base. According to our understanding of consumers, most users prefer to test content before subscribing.

#2 Soft Paywalls

An example of soft paywall used by The New York Times
Source: Nytimes

Soft paywalls are a type of paywall that allows visitors to access a certain amount of content without requiring payment. This often offers visitors content sampling before asking them to pay for a subscription or purchase. The content that is available for free is often limited by allowing only a limited number of articles or videos to be accessed for free. A soft paywall can build an audience by offering free content and increasing the likelihood that visitors will convert into paying customers.

Different soft paywall strategies utilized by publishers:

i) Metered Paywalls

metered paywalls
The Boston Globe attributes its success to experiments with the metered model of the online paywall

Metered paywalls help publishers by allowing them to monetize their content while still providing access to readers. With a metered paywall, readers are given a certain number of free articles before they are asked to pay for a subscription. This allows publishers to capture readers who may not be ready to commit to a full subscription right away while also giving those more engaged the ability to pay for the content they are consuming. This type of paywall also helps publishers build a loyal audience, as readers are more likely to become paying subscribers if they have already become accustomed to the content.

ii) Micropayment Paywall

Micropayment Paywall
Source : Indiatoday

A micropayment paywall is a type of paywall that allows users to purchase access to a website, piece of content, or service in exchange for a small payment. Micropayment paywalls are usually used to offer content or services on a subscription basis, where users pay a small fee on an ongoing basis to access the content or service.

What is the difference between Micropayment Paywall and Metered Paywall? Which one is better?
- Metered paywalls allow readers to access a certain number of articles before being asked to pay for a subscription. Micropayment paywalls allow readers to pay for a single article or a bundle of articles.

- Metered paywalls are better for capturing user interest, whereas micropayment paywalls have the advantage of capturing user interest and their paying intent.

Choosing a paywalling strategy depends on your goals and unique user behavior, for which experimentation is necessary. Read to the end for a step-by-step overview of how to find the best paywalling strategy for your media business.

iii) Freemium Paywalls

Freemium Paywalls
Source : Digiday

A paywall strategy blends free and premium content so that visitors can access free content but must pay for premium content. Freemium has been adopted by some of the world's top periodicals, such as The Guardian, The Telegraph, Business Standard, Outlook India, and India Today.

Freemium versus metered paywalls continue to be debated globally. Freemium and metering strategies make sense for platforms with a big reader base, many loyal readers, and often a wide variety of content, which often serves as a stepping stone to premium content, ultimately, subscriptions.

iv) TipJar Paywall

TipJar Paywall
Source : The Guardian

With TipJar's paywalling model, there is no monetary obligation. Asking for a tip for free content is the most challenging task a publisher faces. In addition, it is impossible to enforce habit formation for tipping. While some small, non-profit publications are getting used to Tipjar, they haven't had much success.

#3 Dynamic, Hybrid Paywalls, or Intelligent Paywalls

Dynamic Paywalls or Intelligent paywalls are the next big thing for digital publishers because they offer a more targeted approach to monetization than blanket paywalls. Intelligent paywalls allow publishers to customize their monetization strategies to better serve their readers by offering different levels of access to content based on user behavior, browsing history, and other data. By tailoring their offerings to their readers, publishers can ensure that they provide value to them. In addition, intelligent paywalls provide publishers with more information about their readers, which can be used to optimize monetization strategies.

Dynamic, Hybrid Paywalls, or Intelligent Paywalls
Dagbladet is a large Norwegian newspaper that has leveraged the power of personalized paywalls to drive digital revenue.

Here are some ways intelligent paywalls are helping publishers maximize the value of their website's total audience without sacrificing user experience or revenue:

1. Increased Revenue: Intelligent paywalls are powered by data and artificial intelligence and offer better subscription conversion rates than one-size-fits-all paywalls.

2. Improved User Experiences: Intelligent paywalls are designed to recognize and understand user behavior, allowing publishers to tailor their paywall to the individual reader. Based on user loyalty, earlier consumption patterns on the platform, and propensity to pay or likelihood to subscribe in the future, these paywalls can appear as registration barriers for some users and hard paywalls for others.

3. Increased Engagement: Intelligent paywalls can also help increase engagement with readers. By understanding user behavior and offering personalized content, readers may be more likely to return to the website or app in the future.

4. Promote Retention: Track user activity and behavior across all platforms to gather behavioral data to develop an automated paywalling strategy and enhance engagement, personalize recommendations, increase stickiness, and improve retention.

5. Reduced Piracy: Intelligent paywalls can also help reduce the amount of online piracy, as readers are less likely to illegally share or download content if they have paid for it. This can help publishers protect the value of their content and ensure that they get paid for the work they put into creating it.

5. Promote Inclusivity: The hybrid and a dynamic paywall are also more inclusive as it doesn't have a one-size-fits-all price. Newsrooms can price content based on effort, quality, uniqueness, urgency, importance, and depth. It allows content companies to treat each piece of content as a different SKU and price it accordingly.

6. Educates Newsroom: It gives newsrooms a better understanding of the types of content people are willing to pay for. It is possible to modify content further for micropayment, repeat payment, and subscription audiences

Publishers worldwide are trying new things and adapting to a changing environment to develop more innovative, intelligent paywall solutions that don't just solve one part of the problem: giving access to premium content in exchange for data and recurring revenue.

Here's our secret spice to winning at content monetization, which may help publishers generate recurring revenue.

Tailored Paywall

Published By Team ConsCent

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