It is no news that publishers — particularly those with a legacy of selling print newspaper and magazine subscriptions — are trying to figure out their business model for the new digital world. As they go through this process, paywalls and digital subscriptions are among the tactics they’re trying out.
There are two types of paywalls publishers are trying:
- Hard paywalls. This is when website visitors can’t access any complete articles unless they have a paid subscription.
- Soft paywalls. Also known as a “metered model,” this is when visitors are allowed to read a certain number of articles per month for free. To read more, they need a paid subscription.
We work with most of the industry’s large publishers, so we see firsthand how they’re grappling with this issue — but we don’t see a consistent approach across the industry. We thought it would be interesting to conduct a bit of informal research to look at what publishers are doing.
Through a review of research and individual newspapers’ practices we found:
- Newspapers have a lot of experience with paywalls and digital subscriptions. Newspapers have been experimenting with paywalls for awhile. The Wall Street Journal, for example, implemented a hard paywall in 1997 and still uses it today. According to a survey conducted by the International News Media Association, as of late last year 73 percent of newspapers had deployed some type of paywall.
- Soft paywalls are the predominant choice among newspapers. According to the INMA survey, 40 percent of newspapers that reported having a paywall use the hard paywall model, with The Wall Street Journal and London’s The Times being the most high-profile examples. The New York Times and 78 newspapers owned by Gannett, including USA Today, are among those using the soft paywall model. Some newspapers — such as The Boston Globe — started with a hard paywall then transitioned to a soft paywall. And there are many newspapers — such as The San Francisco Chronicle, The Dallas Morning News and The Toronto Star — that tried some type of paywall and stopped.
- There’s no standard limit for soft paywalls at newspapers. For newspapers that employ a soft paywall, there’s no standard limit of free articles readers can access each month before they have to subscribe. For example, among Gannett’s 78 newspapers that use a soft paywall, the meter limit ranges from seven to 20 articles a month, depending on audience nuances. Some newspapers have experimented with their limits to find a number that drives the best results. For example, The New York Times started with a limit of 20 free articles per month in 2011 then, a little more than a year later, dropped the limit to 10 articles, where it remains today.
- Newspapers are experiencing some success with paywalls. At least among larger newspapers, paywalls seem to be paying off in terms of boosting digital subscription revenues. In 2013, The Gannett Company said digital subscriptions added more than $100 million to its operating income, and The New York Times recently announced it has topped 1 million digital-only subscribers.
Magazine and Other Digital Content Site Paywalls
Newspapers aren’t the only publishers trying paywalls, but they have a longer history of experimentation than magazines and other digital content sites. Here’s what our review found outside of the newspaper industry:
- Magazines are just getting into paywalls. Magazines, for some reason, have experimented less with paywalls than newspapers. Some large magazines — such as The New Yorker — have implemented soft paywalls and others — such as Entertainment Weekly and The Nation — are about to implement soft paywalls.
- New digital sites are even looking into paywalls. Even newer digital sites that don’t have a hard copy legacy — such as Slate and The Huffington Post — are starting to experiment with paywalls. In the case of The Huffington Post, the move is ironic considering back in a 2011 April Fools’ joke, it poked fun at The New York Times for instituting a paywall.
While paywalls and digital subscriptions have been around since 1997, it seems clear we’re still in their early stages. There will no doubt be more changes ahead as publishers continue to experiment with the concept and figure out the best business model for the digital world.