When a Paywall Might be a Good Idea

Unless you’re running a website purely out of the goodness of your heart, your website needs to earn its keep either by inspiring purchases, bringing in ad revenue, or increasing membership or print subscriptions.

Generally it's best to nurture multiple income streams for your website.
Generally it’s best to nurture multiple income streams for your website.

At first glance, the paywall sounds simple: make people pay if they want your awesome content. But it basically never works out that way. That is not to say a paywall can never work. However, the type of paywall you choose must be carefully tailored to your web traffic and designed to help you meet specific goals.

What Doesn’t Work

The “hard” paywall, where someone must fork over the price of a subscription before being granted access to any content, rarely works. In fact, even for entities that dominate their own market, the hard paywall is a turnoff to readers and brings in money at the expense of severely choking off web traffic. In an age where everyone wants to share everything on Twitter or Facebook, walling off your site with an inflexible paywall is usually a suicidal business move.

Paywall Options for Trade Publishers

Two options that publishers of all types tend to gravitate to with regard to paywalls are the metered paywall and the “freemium” paywall model. You have no doubt encountered metered paywalls when you click on a search engine result for any number of newspapers. You’ll notice a banner on the page notifying you that you can read a certain number of articles for free each month, but if you want to view more than that, you’ll have to subscribe.

The “freemium” model is a website model that offers some content for free, but offers premium content (such as white papers, ebooks, videos, and webinars) for sale. “Freemium” sites may sell premium products individually, or they may offer premium memberships where members get automatic access to all premium content.

Another option that has not achieved much traction in the United States (but which has worked well in Europe) is the “day pass” concept, where a person can purchase 24 hours of premium access for a couple of dollars. Though some American newspapers (Like the Orange County Register) have implemented day passes, it isn’t in wide enough use to really gauge how successful this approach will be in the US.

Multiple Revenue Streams Are Preferable

Even if you have a dependable income stream, adding other income streams is smart.
Even if you have a dependable income stream, adding other income streams is smart.

If you count on a paywall to satisfy all your website’s revenue needs, you could be in for a rude awakening. Companies that have looked to the hard paywall to solve what is at root a business model problem have generally either changed their paywall model or shut down altogether. Ad-supported media is still a very popular option, although ad rates are lower than they used to be due to market splintering.

Affilliate programs are also popular as a revenue stream. Former Gizmodo editor Brian Lam started his own site that has fewer, longer features, and most of his site’s income comes from an Amazon affiliate program. Custom job boards are becoming another dependable revenue stream, particularly for trade websites. Developing multiple revenue streams keeps a website from dependency on one source of income and increases earning potential.

Audience monetization is a complex issue, and has to be worked out individually for each site based on the amount of traffic the site. Hard paywalls only work for the tiniest percentage of dominant sites catering to visitors with the means (and willingness) to pay. Softer paywalls, using the metered approach or charging for premium content tend to work better, because they give the site visitor the feeling that he has control over how much he spends. For most sites, depending on a paywall alone is not sufficient for a site to earn its keep, and should be bolstered by the use of advertising, affiliate programs, job boards, and other revenue generators.

Photo Credits: Stuart Miles / freedigitalphotos.net, cooldesign / freedigitalphotos.net


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