A complete guide to paywalls

Paywalls are everywhere, thanks to creators’ pushing for monetization and offers of exclusivity to their consumers. In 2022, Netflix made about $32 billion, an approximately 6.5% increase from 2021’s $29.69 billion revenue, by using a paywall service to access their video content.

Likewise, the New York Times reported about $414.1 million in revenue from paid subscriptions for the fourth quarter of 2022. A paywall is now a norm for content creators and online publishers to generate revenue while delivering exclusive content to their paid members.

This comprehensive guide explores the different paywall types, their benefits, strategic usage, and top recommendations for online publishers and content creators.

What is a paywall?

A paywall is a website feature restricting access to content on publishers’ websites, apps, or digital libraries. If you’ve been in a situation where you must make payment before accessing digital content on a website, you’ve hit a paywall. It is particularly used to increase revenue generation.

Paywalls are website coding systems that allow only authenticated paid users to pass through and access content. A paywall is often built with JavaScript but can also be built externally using a subscription experience platform. This may include:

• User Interface JavaScript to display premium content sign-in walls to visitors
• Reading metered article counts or access levels from the membership system
• Dynamically showing/hiding restricted content based on user authorization
• Obscuring or blurring parts of an article to non-members

While some businesses choose to build paywalls in-house, this often results in long project durations and reliance on technical teams. Others choose to outsource or use plug-and-play platforms.

A brief history: the rise of the paywall

Publishers have been using paywalls to boost their revenues for about three decades. The Wall Street Journal (WSJ) was the first news outlet to implement a paywall in 1996. Although there was criticism and skepticism around its success, WSJ had over a million subscribers around 2007 and more than 15 million users in 2018. This redefined how paywalls could add to revenue generation.

By 2010, others followed suit, and The Times had also implemented a paywall. Unfortunately, it received a lot of criticism from the internet, and it wasn’t as successful. Attempts like TimesSelect in the mid-2000s to put columnists behind a paywall failed to cultivate enough exclusive value with readers now accustomed to free content access. Fear of losing aggregation reach and digital advertising dollars stalled bolder paywall moves.

However, by 2011, mounting industry pressure forced The Times to implement wider paywalls for digital subscriptions, allowing limited free articles per month—finally striking a balance of maintaining exposure while gating highest-volume users.

Examples of businesses that use paywalls

Many businesses across various industries use paywalls to monetize their digital content. Here are some examples:

Publishing and streaming

The Wall Street Journal, the New York Times, and the Economist have implemented a paywall, and millions of subscribers use their platforms. Wired.com implemented a paywall in 2018 and recorded a 300% increase in subscribers in their first twelve months.

As of Q3 2023, The New York Times had roughly 10 million total subscriptions, including a net gain of 210,000 net digital-only subscribers in the three months leading to September. This shows the progress toward the company’s goal of reaching 15 million subscribers by the end of 2027.

Streaming platforms such as Netflix, HBO, Disney+, and Spotify use hard paywalls to restrict access to their content entirely. This means you have to pay for whatever premium plan you can afford in order to access their content. Despite the risks of using a hard paywall, Netflix has 247.2 million paid subscribers globally as of the third quarter of 2023.

Also, In the second quarter of 2022, Disney Plus had 137.7 million subscribers. A 37% increase compared to the same period in the previous year. That’s like adding more than a third of the entire number of subscribers they had around the same time last year.

SaaS

Most software companies monetize their software solutions using different paywall methods. An example is how Adobe Creative Cloud, Evernote, and Dropbox require payment before accessing shared content.

Specialized blogs and columns

Specialized blogs or columns target a particular demographic interested in content about specific topics. Studio Bloom is a specialized blog focused on empowering motherhood through fitness during pregnancy and the postpartum period.

Types of paywalls

There are various types of paywalls, each designed to generate revenue while providing varying levels of access to users. Choosing the right paywall is not always easy. It requires businesses to know about their users, understand their needs, and accurately predict what paywall is right and when to show it in a potential subscriber’s journey. Showing a paywall too early may deter a user, and showing one too late may decrease the user’s sense of value.

Soft paywall

Soft paywalls are subscription models that allow visitors to have access to some content solely based on the publisher’s criteria. A soft paywall makes it possible for members to join a community for free and enables visitors to feel the quality of the content, which can then influence their decision to pay for a subscription model.

Using a soft paywall is common amongst various online platforms, including news sites such as the New York Times and music platforms such as Spotify.

Hard paywall

A hard paywall is often regarded as the strictest paywall to use as it’s rigid, and no content is accessible for free. This is a challenging paywall model to implement as visitors can potentially be lost if they are confronted with making payments before getting to know a brand. Typically businesses with a strong reputation and recognisable brand strength are the few who implement this type of paywall.

As much as they can discourage visitors, they can also boost revenue if you are in a niche where you dominate the market or have a target audience. An example of an effective hard paywall is how the Times of London now generates tens of millions of dollars in revenue. Other examples of organizations using hard paywalls are the Financial Times and the Economist.

Dynamic paywall

A dynamic paywall is significantly different from other paywalls. It is a paywall tailored to visitors based on their website activities. It deals with data from analytics and how visitors use the website.

Dynamic paywalls key into the behavioral patterns of visitors. As a result, visitors receive subscription prompts that are tailor based on their profiles and data. This type of paywall often uses artificial intelligence and machine learning to optimize engagement and revenue growth.

An example is how Neue Zurcher Zeitung (NZZ) has grown its subscriber base using the dynamic paywall model.

Metered paywall

A metered paywall is a subset of the soft paywall. When a publisher uses metered access, customers can view a fixed number of content or articles per day, week, or month before receiving a prompt to subscribe. The average industry stop rate for a metered paywall is five interactions. This is less disruptive than the hard paywall mode.

After the soft or freemium model, the metered paywall is the second most widely used paywall. The metered model also has a conversion rate of about 5-10% more than other paywall models, but it can hinder a company’s momentum if done wrong.

The membership model

Similar to a soft paywall, the membership model is a passive way to use a paywall. Instead of asking a user to subscribe before gaining access to content, businesses subtly put the “ask” button at the bottom of the page, often with listed benefits of becoming a member.

This means that readers can access most content for free but can’t access exclusive membership content readily available for subscribers. The Guardian is a prime example of a successful business who used the membership model of a paywall to generate revenue.

Why should you use a paywall?

Using a paywall can be a strategic decision for various reasons, depending on the nature of your content, business model, and revenue goals. Here are some compelling reasons as to why you might consider implementing a paywall:

Increase in digital subscriptions and revenue growth

Digital subscriptions are increasing because paywalls are helping businesses monetize content at the right time. By strategically placing these paywalls at optimal points in a user’s journey, companies are significantly increasing the likelihood that users will subscribe. This then leads to more revenue generated as a result.

For example, The New York Times made $340 million in 2017 and $414.1 million in the fourth quarter of 2022 through its digital newspaper subscription model.

Enhance brand authority and reputation

Paywalls enable brands to focus editorial resources on raising standards rather than chasing traffic. When users consistently get high-value content, it shapes their perception of the brand as one that values its expertise and is confident in its value, and improves the publisher’s authority from the audience’s perception.

Related: Nurturing digital brand authority in the age of subscription business

Build loyal communities

As a brand, a paywall gives you access to individuals willing to commit to your brand and become returning members or customers. When done right, it significantly benefits your brand as a loyal community develops.

People who want exclusive access to digital content exhibit a level of commitment and loyalty. These invested subscribers often become brand advocates that amplify growth through word-of-mouth referrals. So beyond direct subscription revenue streams, paywalls facilitate passionate communities broadcasting reach on the brand’s behalf.

Fair value exchange

While a paywall enables you to monetize your content, it also allows you to receive other forms of value exchange from your subscribers. This can be their personal information like emails, interests, demographics and income brackets. With this information, it becomes possible to further personalize a user’s experience and content recommendations, leading to a more satisfactory relationship with your brand.

When to use a paywall?

The following will help you decide whether it’s time to implement a paywall.

What is your goal?

A paywall isn’t always about the payment. Before setting out and deciding when to use one and which model to implement, consider the goals of the business first. Your goal can be as simple as improving revenue, fostering content quality, or strengthening reader loyalty. Each of which will use a different paywall model.

Who is your competition?

Competition can be a significant factor in any decision you make for your brand. If you compete with brands popular in comparison to your own growing brand but offer what your competition can’t and doesn’t offer, you might start charging for access.

Are you adding enough value?

People want to know the value they will get for their money. Your service should offer great value to your audience. A paywall might change revenue generation if your value cannot be competed with.

Your audience demographic

Audience demographics are critical when making revenue decisions for your brand. You need to know who your audience is in order to charge them appropriately and deliver the kind of content they want. Having solid demographic information about your audience can help you determine how best to use a paywall and when to use it.

Your current reader acquisition channels

Are newsletters, social media, or organic searches driving the masses to your content? An effective and efficient acquisition channel ensures that a paywall is the right step for access to your premium content.

The loyalty of readers

When you have a database of loyal readers committed to your brand, that might be the best time to shoot for a paywall. Their loyalty and commitment can help extend your brand’s influence.

How to start using a paywall

Using a paywall involves a strategic approach to implementing a subscription or payment model for your digital content.

Know your audience

The first important factor to consider is the kind of audience you serve. Using the information you have about them effectively is critical. Ensuring the quality of your content meets your audience’s needs is crucial before you implement a paywall.

Knowing your audience helps tailor messaging to encourage conversion and retention. For example, analyzing content preferences and reader’s intent across user segments allows for crafting targeted subscription offers. This personalizes perceived value.

Also, knowing demographics, like industry, seniority level, and organization size, aids in distinguishing commercial audiences from informational ones and can help tailor discounts and deals, e.g. student discounts for students.

Define your strategy

Identify what type of content will be behind the paywall. Whether it’s premium or exclusive content, ensure it provides  unique value to your target audience that they’d be willing to pay for. Consider balancing premium and free content to attract and retain subscribers. The free content gives your potential subscribers a taste of what you’re serving.

Select the right paywall solution

When deciding which paywall service to use, assess if it is the right platform for your brand or business. The ease of technical implementation, the business’ brand strength, the subscription model, and the audience should all be significant factors to consider when choosing which paywall service to use. Look out for a paywall with seamless integration with your content management system.

Your pricing strategies

Pricing is key. The audience wants to know their options when paying to access your content. You might deter your best members if you don’t have appropriate pricing strategies. Consider A/B testing to determine if a subscription model or one-time payment option will work for your brand as you begin using a paywall.

Set up payment processing

A payment processing system provides subscribers with a secure and seamless transaction. An effective one has the right integration and configuration, enabling you to set a payment frequency and accepted currency.

User experience

When using a paywall it is vital to find a balance between giving access to your members and setting some restrictions. This affects user experience and can contribute to how easily you obtain more subscribers or lose them.

A good user experience provides clear instructions on subscribing and accessing premium content. Ensure your paywall interface is customized to match your brand.

What to consider when choosing the right paywall solution

Here are key considerations to keep in mind when selecting a paywall solution:

Does the platform support your pricing models and strategies?

Using a paywall on your website for revenue generation is a fantastic idea. Ensure that your paywall service supports your pricing strategies and models. Compatibility with your pricing strategy can make or break the success of your paywall’s implementation.

Customer support and training

Effective customer support provides training materials and promptly addresses customer issues to reduce frustrations and dissatisfaction. If you choose to outsource the paywall build or implement a paywall platform, be sure to choose a paywall brand with good customer support and training materials for implementing their paywall service.

Paywalls can be complex, and having the right support for this critical part of your revenue generation strategy is key to avoiding big losses.

Integration capacity

The right paywall solution integrates seamlessly into your existing content management system and website. It ensures smooth flow and minor disruption, which can impact your user experience.

The solution should also integrate with your payment gateway solutions, customer relationship management (CRM) and single sign-on (SSO) to keep users from having to sign in multiple times.

Analytics and reporting capabilities

For effective optimization of your paywall, it must have efficient analytics that can capture real-time data from your platform visitors and members and report accurately for marketing campaigns. This will enable you to make informed decisions and can change the course of your paywall implementation when maximized appropriately.

Vendor reputation and reliability

A good reputation is hard to develop quickly. Many agencies make big promises yet deliver subpar services. If you’re choosing a paywall provider, consider the vendor’s credibility, customer reviews, and support response time. This gives you a sense of their reliability and an assessment of how best their services can help your business.

Scalability for future adaptations

A paywall solution is built to bring you more revenue. And with market changes, flexibility and the ability to pivot to new revenue strategies is crucial. Look for a paywall solution that allows experimentation and implementation with scale. This gives you a competitive advantage in adapting your paywall solution to the ever-evolving digital space.

Opt for a paywall solution that allows you to consistently test its product innovations and perform different tweaks for business purposes.

Challenges and drawbacks of paywalls

Consider the following challenges and drawbacks if your content is behind a paywall.

Subscription fatigue mitigation

Consumers are increasingly wary of managing multiple subscriptions. To mitigate this, companies should consider bundling services or offering tiered subscription models that cater to different needs and budgets.

Providing clear value propositions for each tier can help users feel more in control and less overwhelmed. Companies should also invest in building user-friendly paywalls that make managing and understanding subscriptions straightforward. Transparency about each subscription and how it can be cancelled or modified is key.

User resistance

Finding yourself on a website asking you to pay before accessing news content can be frustrating and interruptive. To overcome this resistance, offer a taste of what’s behind the paywall through free trials or limited free content. Clearly communicate the added value they’ll receive by subscribing, such as exclusive content, an ad-free experience, or additional services.

Engaging with the community to understand their needs and preferences can help shape a more accepted and user-friendly paywall system.

Finding the right balance

Creating the right balance between free and paid content is crucial. This ensures that your customers have access to content worth their money. Meanwhile, you want it to be competitive and sustainable for the paywall service you use. Likewise, it is essential to use customer feedback as insights on how best to serve them with your content.

Paywall and future trends

As more businesses monetize their content, the following trends will likely influence paywalls.

Emerging technologies such as blockchain

Paywalls have boosted revenue generation for online publishers. However, there are some hurdles they must overcome to maximize their paywall service. Users are now more sensitive about personal information. As a result, publishers need to seek alternative payment methods. This is where blockchain comes in.

With blockchain technology, users don’t need to fill in their information before making payments. Blockchain provides a secure decentralized platform that also enables micropayments. Likewise, they can pay for a particular content segment instead of accessing the whole website.

Evolving consumer preferences

Digital media consumption keeps evolving. Thus, a brand must pay attention to changing consumer preferences. This gives you an insight into new trends and how to tap into them. Your brand evolves as content consumption evolves. As a result, your paywall can become more effective for your brand.

Regulatory considerations

Online payment has raised a lot of debates around data security. People are now more sensitive about their information due to the variety of illicit activities perpetrators could conduct with their data and how they are sold on the dark web.

It’s important to ensure all data collection and processing is safe and secure, as well as being GDPR and CCPA compliant. Reminding users of the safety features you have in place can also help put potential worries at ease.

FAQ on paywalls

Are paywalls illegal?

Paywalls are legal to use. They give you that critical advantage of charging your subscribers for the quality content they enjoy while committing to your brand within the industry.

What does it mean to go behind a paywall?

Going behind a paywall means bypassing a paywall. This means a user has intentionally tried to access premium content on a platform without paying or registering an account.

How do I implement a paywall without alienating my current audience?

While implementing a paywall, ensuring existing subscribers don’t feel cheated is a primary concern for many. To do this effectively:

• You want to phase the paywall in gradually using a metered or freemium model to get readers accustomed to changes.

• Clearly explain the value offered to paying members. Let them understand the exclusive benefits, premium features, and unique advantages that set their subscription apart from non-paying users rather than over-restricting access.

• Analyze usage data to keep popular areas accessible as entry points.

• Allow sharing selective content to social networks for limited exposure.

Will implementing a paywall affect my site’s traffic?

While some research has shown site traffic can dip, it all depends on the type of paywall, with one study indicating that a hard paywall has a more negative impact on traffic.

For premium publishers, adopting a paywall strategy is less about maximizing site traffic and more about focusing on cultivating a dedicated readership willing to pay for quality content. This approach emphasizes the value of nurturing a high-quality user experience and building a loyal, engaged audience.

In the long run, while initial traffic might dip, the trade-off can lead to a more sustainable and profitable business model, as content is directly monetized and customer loyalty is strengthened.

How do I determine which content to place behind a paywall?

When determining which content to place behind a paywall, it’s essential to balance the value of your premium content with the need to attract new subscribers. While it might seem intuitive to place your most valuable and unique content exclusively behind the paywall, this approach can be counterproductive.

Instead, consider offering a taste of your high-quality content to all readers, showcasing the value and encouraging them to subscribe for more. This method ensures that potential subscribers are enticed by the quality they can expect but are motivated to pay for deeper access.

Ideal content for exclusive paywall access includes specialized features, detailed opinions, and commentary from well-known figures. These types of content provide unique value that readers are more willing to pay for. By strategically determining what content goes behind the paywall, you can effectively balance attracting new readers while offering substantial value to subscribers.