Do Paywalls Actually Work?

The challenges of coping with today’s economic setbacks are indeed very real. For digital publishers, many discussions are taking place behind closed doors regarding how to preserve the livelihood of their publications while maintaining the loyalty of their readers. Paywalls have worked for many publications, however, they do not work instantly, as there are a lot of variables to consider. Some of those variables include; targeting, positioning, user experience, and more. Setting up a paywall without a strategy in mind is like fishing without bait, you have to make it look inviting in order to get a nibble.

What is a Paywall?

Let’s start with the basics. A Paywall is an online virtual content barrier, whereby access is limited to users who have paid or signed up to subscribe. So far so good, right? Well, it’s not all as black and white as you might think, and in the following sections, we’ll discuss why.

Where Is The Skepticism Coming From?

With the lack of data combined with the fear of the unknown, controversy is arising in the publishing industry as publications discuss whether or not paywalls are a good fit for their organizations. Prominent publications like The Guardian have publicly criticized paywalls, stating “a belief in an open Internet”, as their logic behind not gating their content. Most of the skepticism centers around a belief that it won’t work, assuming that browsers will refuse to pay for something they are used to getting for free.

Wikipedia co-founder Jimmy Wales also did not hold back his thoughts about paywalls, as he found them to be fundamentally flawed due to the vast supply of free and widely available content on the internet. He feels that readers would always go for the free alternative anyways.

On the other hand, however, figures like Warren Buffet and Rupert Murdoch have had a long history of supporting paywalls as they both believe that people will always receive top-quality content if they paid for it. They also assumed that paywalls would promote the freedom of journalism altogether as lobbying and other directed media efforts will begin to suffocate once funding becomes crowd-based.

Signs That Paywalls Work

There are countless examples and a ton of evidence to prove that paywalls work quite well, but to effectively persuade you, we must base our proof on evidence that has been studied and reviewed. In a recent first-of-its-kind study carried out by Doug J. Chung, a Harvard Business school associate professor, the effects of digital paywall strategies were observed from a profit and effectiveness standpoint.

In the study, profit sheets of 79 major US publications have been analyzed from two separate streams of income, one being the traditional advertising stream and the other being the subscription process altogether. The results were gravitating more toward the effectiveness of paywalls in general, as the author concluded that “This study of media paywall strategies in the US finds that adopting a digital paywall can lead to positive demand substitution from digital and print channels, particularly for large-sized firms and those with unique content.”

Additionally, the American Press Institute states that since 2020, around 80% of US papers with a readership base of over 50,000 are already using a thriving digital subscription model which is helping maintain their steady and predictable income.

What Makes a Paywall Successful?

The quality of the content being gated and its scarcity make up 50% of the equation, the other 50% however, relies more on the technical aspect of things. So, in order to have a successful paywall strategy, you are going to want to make sure that the content you are encouraging readers to pay for can’t be accessed anywhere else and that its quality is unmatched.

On the technical side though, you’ll need to focus on targeting, positioning, and user experience. Subscribers have come to expect a self-serve experience as a standard and they will not be shy to cancel their subscriptions if the information they are seeking cannot be accessed quickly.

To further simplify the answer above, we have constructed the equation below as a reference and generic guide to help guarantee the success of your paywalls.

{ Content Quality & Scarcity + Effective Paywall Strategy & Platform = Growth in Subscribers }.

Read more about the different types of paywalls here.

1. Content Quality & Scarcity: The quality of the content is entirely dependent on your editorial team and how much you are willing to invest in quality journalism. Make sure that this part of the equation is settled before going forward as your paywall’s success depends on it. Also, before getting too hung up on the quality of your content, ask yourself whether or not the topics you’re covering are unique enough for people to actually want to pay for them.

2. Effective Paywall Strategy: Your ideal paywall strategy is all about understanding your customers and knowing what offers to put in front of them and when. If you are looking for ideas or inspiration, check out this webinar on Marketing Strategies for Subscription Businesses.

3. Platform (managing your paywalls and subscribers): Your chosen subscription management platform should offer the flexibility to create, structure, design, edit, and control the entire subscription process. You’ll want to be able to both manage the way your paywall looks and interacts with users as well as have the ability to manage and interact with the subscribers yourself.

About Pelcro Paywalls

At Pelcro we make it our mission to cater to the unique needs of your subscribers. You can use advanced targeting filters to personalize the language and currency based on your users’ location, only show paywalls on certain pages or devices, and much more in minutes. To learn more about Pelcro’s Subscription Management Platform, Book a Demo with one of our representatives for an exclusive one-on-one product tour, or get started with your free trial right away.

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