Subscription Management System Integration: What Is Paywall and How Does It Work for Media Platforms?
In today’s rapidly evolving publishing market, your monetization strategy strongly depends on upcoming trends that shift at an exponential pace. Whether we enjoy it or not, the production of quality online content requires reliable funding.
However, over the last few years, the access to free online magazines and newspapers has been discreetly replaced by advertising-founded journalism, along with all its drawbacks, including poor performance, privacy harms, ad blockers (according to Statista, the number of Adblock users has grown from 15% to 27% since 2014) or increasing audience retention, caused by an intractable subject-agent conflict of displaying the unwanted advertisements, depriving the site of needed funding.
Regardless of this funding method is most common, in the nearest future it may become a faded memory, being driven out by an increasingly popular alternative - paywalls and the “pay-for-access” model.
This shift from “advertising-but-free” to a paywalled web, is rife with unexpected pitfalls and offers the system where high-quality articles or blogs are available to fewer and fewer people, instead of providing free information flow.
The implementation of paywalls will have potentially huge benefits for the web and society, so let’s dive deeper into detailed aspects.
What is a paywall, actually?
Having that said, let’s summarize that paywall is a monetization model that's widely used by publishers to allow access to a small portion of content before a pop-up block the rest of the content in some way. This approach drives more interest to your publications without being too restrictive and lets users dive into the content you offer and decide whether they’re ready to pay for more or not.
Simply put, according to Reuters Institute, subscription and membership is the key priority for the news industry going forward. Eventually, 52% of respondents, editors, CEOs, and digital leaders expect this to be the main revenue focus, compared with just 27% for display advertising, 8% for native advertising, and 7% for donations. This is a huge change of growing trends for the industry.
Being pressured by coronavirus pandemic restrictions, the audience's appetite for quality content has drastically soared in popularity, so the publishers put up paywalls left and right to benefit from a relatively uncrowded market. Honestly, the pay-for-access strategy is supposed to be a more straightforward and transparent monetization model, so maybe that’s the reason why it’s accepted by users more friendly and now more people are ready to pay for what they read online.
More specific talk: The types of paywalls
Today, there are 4 major types of paywalls available, including:
- The hard paywall
- The soft paywall
- A metered paywall
- A freemium paywall
- Dynamic paywall
- Hybrid-dynamic paywall
The hard paywall
A Hard Paywall has been essentially designed as an absolute restriction on content, that prevents users from accessing any online publications unless they purchase a subscription. If publishers decide to go with this option, they have to negotiate the risks, as hard paywall more likely leads to losing readers, destroying SEO through limited user engagement/conversion, or abandoning a reading habit providing no trial periods to demonstrate the value of a subscription to evaluate if it’s right for readers and worth investing in.
That said, hard paywalls can be used more effectively by well-known media publishers with loyal admirers (like The Wall Street Journal), who already dominate the market or target a specific audience since the acquisition of new readers seems to be another issue, associated with this model.
The soft paywall
There are several types of soft paywalls, including metered, freemium, dynamic, and hybrid-dynamic models. This option allows publishers to design and set up their own unique criteria to get access to premium or all content on the platform. When this accepted limit is reached, readers will run into the pop-up, reporting the trial period is over and offering to subscribe in order to continue consuming content.
For better understanding, let’s dive into each type and run through their specifications separately.
In some cases, media portals that try testing the hard paywall eventually replace it with a metered system and optimize it from time to time until reaching the desired results.
For example, The Telegraph has been refined its gated strategy for years, but anyway in 2017, they cut back from five to two on the number of free articles available for visitors every 45 days.
It’s one of the most popular types, as metered paywall produces quite a flexible approach, opening a set amount of content within a specific period of time. Regardless it’s widely adopted by the media portals which are at square one, leading publishers, like The New York Times used it, though that has since evolved further into a dynamic paywall.
For instance, a publisher may open access for users to read 5 articles every month. When the fifth article is read, the reader will be presented with a pop-up, and all other content will remain locked until the time period ends. This option often requires registration, which should essentially guarantee a paywall offer no matter the device - but it doesn’t always work like this in practice.
Despite this model builds some flexibility, it doesn’t provide an advanced data-driven strategy, since first-time visitors might be consuming large amounts of content within a small time frame - even a single session, will be treated the same as a user who’s been active for months and consuming their limit of metered articles as this first user who’s new will more than likely not return for the next month or resort to using other strategies to bypass the meter. That’s where the dynamic type fits better, leading to a more customizable monetization model and building better engagement.
Freemium (aka “reverse paywalls”) is more acceptable for portals with smaller audiences and offers a mix of free and premium content. Publishers can handpick those blogs and articles that have to be paid for, close the access to them with a hard paywall and make the rest of content unlimited and accessible all the time. In most cases, the website will also offer premium content for highly popular topics or in-demand articles, however, in order to access this premium content, the user must subscribe. Some content (for example, breaking news) might be free for all users, but in-depth analyses and investigative stories remain locked down, but it’s always a question what content has to be put behind the paywall.
The revenue will strongly depend on that choice, since a large amount of free content will be open, so you may be losing out on slightly less engaged users who may be ready to move to a higher level of engagement or who may not be aware of the value of the subscription you offer.
Also, constantly blocking access to specific content may lead to paywall fatigue. In other words, it becomes common for users to see a paywall, this way they simply click away to other content when necessary, and stop considering making a purchase, staying absolutely intact by your banners and pop-ups.
Here at Apiko, in the Novoe Vremya case study we decided to go with the freemium paywall, so there are 4 available subscription options, offering different benefits and terms. For example, choosing the NV Premium package, users will get access to premium content, disabled advertising, and the chance to share blogs and articles. Users will leverage the best option and pick up the most appropriate one depending on price, benefits, and other subscription options.
Dynamic paywall is another form of the soft type, that operates on similar principles, but the timing of the paywall trigger will be determined by each user’s behavior. There might be different engagement levels, designed in accordance with reaching a high enough propensity to subscribe and be allowed to consume whichever content they choose.
This approach may be considered as the most tailored one, that creates payment offers depending on the user’s consumption.
Driven by artificial intelligence and a highly individualized system, this kind of paywall can help you to increase the percentage of engaged users who convert, which in its turn leads to the revenue growing. However, it’s critical to set up the proper level at which the paywall is triggered. If it is too high or too low, potential subscribers will be lost.
This is a form of paywall built upon the blend of essential benefits of the dynamic and freemium models as well. So, while premium content remains blocked behind the paywall, free content is available until these free articles also become dynamically locked when a user reaches a certain level of engagement - allowing the publisher to monetize their free content on top of their premium offering by targeting a highly specific segment of users and keeping the content circulating within the platform.
Using the benefits of two successful paywall types effectively, this type of combined paywall can yield a 50% greater purchase completion rate in users who viewed the Hybrid-Dynamic Paywall over the standard paywall model through the propensity to subscribe (P2S) algorithm.
Server side paywalls put the focus on your content security and tend to provide the highest level of protection as the decision regarding what the user gets to see is made at the server stage before anything is actually sent to the browser, so every single blog will be saved intact.
Nonetheless, the problem with this type of paywalls lies in that search engines will only index what can be seen by the browser so search engines can miss your content. If you want to get around this issue - decide on choosing to allow access to a small amount of content either directly on the web page or hidden in meta tags.
These are the opposite of server-side paywalls in that the decision regarding access is made once the page has actually been accessed in the browser. It is the browser application that determines whether access is allowed or not. Besides, some problems arise here.
The issue with this type of paywall is that the content is actually on the platform, it is just hidden. This means that some people are able to find different methods to block the paywall and gain access to the content.
Which paywall model is the best?
Based on our expertise as software developers we can strongly highlight two main principles of implementing the paywall and choosing the most effective type for your platform.
First, if you install a paywall and expect to carry on like you always did, it won’t work definitely. Changes have to be taken on each level, from the way you produce the content to how you evaluate its performance. Don’t count on the loyal audience, that will accept any paywall model that actually works.
Secondly, A-class journalism is one of the keywords for a successful subscription model, so you’d better say goodbye to clickbait and stop cheating on your readers.
Honestly it’s a cornerstone - to decide which pieces of content are good enough to be locked up or what pieces of content will turn a curious reader into a paying subscriber and keep them coming back.
If you’re not ready to choose which type of paywall will work with your solution best - rely on your software development partner, an experienced team can always give you a piece of advice. At least, for our experts it’s a pleasure.
From the very beginning, maintaining even this relatively low percentage relies on encouraging readers to ascend to higher and higher levels of engagement. Moreover, depending on the type of publisher - pay attention to choosing a paywall that will not push them to subscribe before they are ready. If the subscription offer is launched too soon - the chances are that they will not convert.