top of page

What Is a Paywall? 5 Reasons Why Your Business Needs One

Updated: Feb 1

What Is a Paywall?

A paywall is an online virtual content barrier, whereby access is exclusively restricted only to users who have paid or signed up to subscribe. Paywalls are mainly useful for publishers who suffer from the inconsistent and unpredictable flow of income that is generated through their published news or content. It has been reported that over 76% of American newspapers now function based on some sort of paywall. This makes paywalls the optimum solution for any media or news organization that is facing trouble with revenue.

The Rise of Paywalls

Paywalls only started appearing in 2010, as banner ads were the sole source of revenue for digital publishers prior to that. With ad revenues tanking, traffic being swallowed by social media networks, and layoffs spreading in every corner of the industry; paywalls came to the rescue. The introduction of the paywall technology was a necessary transition to maintain a steady stream of income for a wide variety of content producers.

The progress and success achieved by the implementation of this technology were unprecedented. The New York Times in the first quarter of 2020 acquired a total of 567 thousand new subscribers, a number that took them 18 months to achieve before was easily surpassed in just three months. Not to mention that the newspaper now tripled its revenue by just relying on its readers. More recently, L’actualité has seen renewal rates increase by 87%, while overall revenue has risen by 13% within the six months of implementing a paywall.

Who Would Benefit From a Paywall?

Whether you are a small-scale publication or a big media conglomerate, as a publisher you would benefit from implementing a digital paywall and developing your offerings into a subscription or membership-based business.

Five Reasons Why a Paywall Would Be Beneficial

1. Increase in Revenue: When talking about digital publishers and online content, the main concern is always related to the consistent flow of revenue. Using a Paywall will definitely guarantee you that steady flow of revenue you need in order to continue creating top-quality content.

2. Encourages Quality: Putting up a paywall on your website will definitely take the quality of your content to a whole new level. People won’t pay money for mediocre content that is available everywhere for free. However, they will pay for premium content that is offered exclusively by your organization. Thus, adding pressure to invest a lot into the quality of your content.

3. Ensures Loyalty: Reader loyalty will be something absolutely guaranteed. It’s as simple as that, if your audience paid for something they sure will want to get their money’s worth out of it.

4. Segment Audience: Your subscription-based model will allow you to have a database for each of your subscribers. Which will enable you to get creative with re-marketing to your audience.

5. Improved Brand Image: Gated content in general is very appealing to readers. It makes them feel like the content you have to offer is premium and better than any other piece of content on the internet (which should be true).

After being provided with just some of the reasons why a paywall would be extremely beneficial for your business, now we head to the tricky part. Choosing the right paywall can indeed be tricky, as you probably wouldn’t know which specific paywall to implement. Nevertheless, here is a list of the different paywalls you need to know about before setting your mind on one of them.

The 4 Types Of Paywalls:

1. Hard Paywalls: This is when a publication completely closes off its content unless users sign-up for a paid subscription. It’s arguably the riskiest as you would lose a lot of readers with this strategy. However, this paywall is the hardest to maneuver around, ensuring your content is, for the most part, gated. An example of a hard paywall would be the Financial Times. 

2. Metered Paywalls: In contrast to a hard paywall, a soft paywall, also known as a metered paywall, allows users to access some of your content but not all of it. This paywall is more engaging than the hard paywall because it allows readers to get a taste of your content before nudging them to subscribe. It is usually equipped with a countdown timer of how many articles a reader has left. An example of this paywall is The New York Times. 

3. Freemium Paywalls: For publishers that don’t want to gate all their content behind a paywall, they can offer a freemium paywall. This allows for the majority of the content to be accessible to the public. However, a selected portion of the content remains accessible to premium members only. This paywall is ideal for generating revenue through ads and subscriptions simultaneously. The Guardian uses this paywall.

4. Dynamic Paywalls: A more data-centric and personalized approach to the paywall. Works on analyzing the readers and their onset reading patterns. Moreover, selecting only those who are most likely to subscribe and restricting the selected content to prompt them to sign up. Although it takes time to implement in comparison to the other options, it has a higher success rate in guaranteeing revenue. This paywall is relatively new to the industry but publications that use it include New York Magazine and Hearst Newspapers.

Why It’s Worth It

Selecting the right paywall becomes increasingly important in ensuring that your readers are translating into subscribing users. It’s also important to ensure that you are reassessing your paywall strategy to drive up subscriptions instead of driving them away. If you are looking for ways to implement a paywall, look no further. Here at Pelcro, our goal is to make your journey to a profitable subscription business, smooth and seamless. To learn more about Pelcro, 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 and see for yourself.


bottom of page