For centuries, newspaper publishers offered the same stories and advertising to masses of people and then collected their shekels each week as part of a subscription payment. The act of the paper delivered coming to the door each Friday to collect on the subscription costs had become as much of a part of daily life as the morning coffee. When something is done successfully for hundreds of years, those doing it can find change to be difficult to accept.

When it became obvious that the Internet was where news publishers would have to put their content if they wanted to reach a large audience, the idea of collecting shekels each week started to disappear. In 1997, the Wall Street Journal launched the first online paywall that was designed to charge an online subscription rate for the Journal’s content. It worked so well for the Wall Street Journal that all of the other local, regional and national newspapers thought that paywalls would simply become the new way to collect subscription revenue. As time has gone by, the idea of a paywall for every newspaper has started to fade.

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The Metered Paywall

According to TheConversation.com, the New York Times has been a newspaper that has successfully used the idea of a metered paywall to bring in revenue. With a metered paywall, users get a limited number of free looks at articles before they have to buy a subscription. The metered paywall can also take effect after the subscription is paid for to allow access to only parts of the newspaper or a limited number of articles.

For some of the established newspapers, the metered paywall has worked out well. When faced with the possibility of not getting content from a reliable news source, many people do buy an online subscription. But the success is mixed, and many newspapers have started to do away with metered paywalls in lieu of no paywalls at all.

The Younger Generation Gives Insight Into The Future Of Paywalls

The experts at EditorandPublisher.com point out that younger news readers (29 years of age and younger) tend to be very apathetic about metered paywalls. The general attitude is that if the news is no longer free, then the younger generations simply will not read it. In this way, paywalls become a deterrent for the massed of newspaper customers that are growing up in the digital age.

Some publishers think that the days of seeing newspapers under the arms of Millennials as they sip coffee at an outdoor café are not gone, and they may be right. A very interesting infographic offered by the Newspaper Association of America shows that 56 percent of Millennials read either printed newspapers or online newspapers. But what is more interesting is the fact that 68 percent of people ages 18 to 24 read and use coupons and advertisements from printed newspapers. It looks like the younger generation would rather buy a newspaper or get their online content for free rather than go through a paywall. This sort of data is very telling, and gives newspaper publishers reason to suspect that paywalls many not be effective.

Mass Advertising Versus Customized Advertising

Newspapers used to rely heavily on advertising revenue to survive, and they still do. But the mass advertising that sustained the newspaper industry for decades is showing signs of no longer being effective. Many newspapers are using Internet analytics and specialized Internet programs to create customized experiences for their readers. These experiences are delivered through native advertising, or advertising that is designed to go along with the schedule and reading habits of individual readers.

If newspapers are going to drop mass advertising in lieu of native or targeted advertising, then many people wonder if a paywall is going to be an effective way to bring in more readers. Publishers can charge more for targeted advertising and while paywalls do elicit a tremendous amount of analytical information, the idea of being able to speak directly to a consumer is becoming more appealing to advertisers.

Micropayments

In Germany, several large newspapers decided to experiment with a concept known as micropayments for news content. The system works by allowing readers to put money into an account and then small amounts of that money are withdrawn each time the reader clicks on a news story. If the reader does not request a refund (which they are allowed to do under the system) then the newspaper gets its payment of anywhere from 15 to 25 cents per article.

Several American newspaper publishers are looking into micropayments as a way to enhance native advertising to generate more revenue. But will Americans pay a quarter to read one story when a whole paper only costs around a dollar? Younger news consumers may be more apt to use this sort of a system, but getting older readers to pay as much for one story as they used to pay for the whole paper is going to be a challenge.

Who Will Have Paywalls And Who Will Not

According to Yahoo! News, it appears that tabloids and new news sources are the ones having issues with paywalls. While publications such as the New York Times, Wall Street Journal and the Times of London have very successful paywalls, tabloids such as Britain’s The Sun are dropping their paywalls in lieu of other forms of revenue.

Many tabloids and new news sources are experimenting with putting premium content and interactive features behind paywalls, and this method is becoming somewhat successful. But it is becoming apparent that if your newspaper is not a trusted source of real news or financial information, then a paywall is not going to work for you.

Paywalls, for now, look to be here to stay for the more established newspapers around the world. But the problem is that digital advertising and paywalls are simply not making up for the billions of dollars in print advertising revenue that has been lost since the Internet became the publishing platform of choice. In 2014, it looked like subscription revenue was on the rise and paywalls were working. But as paywall revenue starts to drop and many newspapers around the world start abandoning their paywalls, it looks more and more like newspapers are going to have to develop new ways to generate revenue if they want to survive.

What strategy can publishers develop in order to increase the revenue generated from paywalls. Will this revenue ever come anywhere close to the lost print advertising revenue?