The subscription business model might not be anything new, but applying it to your publication successfully requires research and ingenuity. This way of operating might be difficult for both current and potential readers to buy into, so it is of great importance that news sites and magazines adopt the model that doesn’t drive their readers away.

At Content Insights, we have a lot of clients who successfully operate on a subscription business model. The Süddeutsche Zeitung, The Local, Mittelbayerische Zeitung, Badische Zeitung, De Persgroep are just some of the subscription-oriented publishers with whom we have already discussed subscriptions and how this specific business model is helping them generate more revenue. So, a great portion of the knowledge within this post will come first-hand, thanks to these talks with people who actually run subscriptions.

Even though each of these publishers are different, they all share one thing: they had to select the right paywall model for their publication, and that is an extremely delicate process.

There’s not much room for trial and error. Especially if you don’t have an insanely big audience. For smaller publishers, it’s either do or die with subscriptions. They have only a single chance to introduce a paywall to their readers without driving them away, so they need to be extra careful with introducing the right paywall at the right time.

In this article, I will explain various subscription models and how publishers can figure out which one of these solutions will work for their site and audience.

Hard paywall: pros and cons

As you can probably guess on your own, the hard paywall restricts access to all the content published on a specific website, making it accessible only to subscribed users.

In most cases, unsubscribed visitors can only see the headlines of articles on the website. However, there are certain hard paywalls that are a bit more generous with casual readers, allowing them to see the first couple of paragraphs of the article along with the headlines.

The hard paywall is the riskiest paywall option of them all, especially for smaller media outlets. It is mostly used by the likes of the Financial Times (and, until quite recently, the Wall Street Journal), publishers who are aware of their amazing brand strength and reader loyalty. They know that their readers don’t just seek information, they seek information on domains that they trust. They trust the expertise of people writing for these publications and they are perfectly satisfied with the overall quality of their content. Brands like WSJ and Financial Times have a long and rich history, and they can basically win big with any business model.

It probably comes as no surprise that the hard paywall usually works best for strong niche websites or domains that publish specialized, high-quality articles on a certain topic from an angle that nobody else does in the industry, and if that’s not you, this probably isn’t the best paywall option for your business. After all, The FT is essentially a trade publication. If you have a classic news website, the hard paywall could definitely drive your audience away because the information you’re planning to charge your readers for can be found somewhere else online for free.

Metered paywall: pros and cons

The metered paywall is, for many publishers, the gateway subscription approach. If the hard paywall is the Great Wall of China, the metered paywall is more like a garden fence. It’s no surprise that it’s one of the most popular approaches used by publishers and leading media outlets.

Why’s it a ‘gateway’ approach? Well, while there have been high-profile examples of metered paywalls (The New York Times is the obvious one), many of those publishers have in fact moved on from this approach. We’ll get to that in a bit*.

There’s nothing particularly complicated to understand about the metered paywall. It allows unsubscribed readers to read articles on the website for free – but only a limited number will be accessible before you are invited to sign in or sign up. Publishers using this approach don’t differentiate between regular content and ‘premium’ content, so the limit is set purely by number of articles read.

In the case of The New York Times, the brand used device-specific charges, offering 20 articles for free per month per user. People who come to The Times website through social media links can also read content for free. It is designed to serve three different types of readers: loyal customers, free visitors, and social media users.

This type of paywall is used by publishers who don’t necessarily want to give up on traffic that comes from their casual readers.

Installing a paywall often reduces the unique visitor count on a specific website, which can discourage advertisers. With this approach, publishers try to keep at least a certain portion of revenue coming from ads. It helps them get the most from their casual and loyal readers as well.

If you’re still focused strongly on growth, but you feel you already have a decent enough audience – you should definitely consider the metered paywall. It will help you with:

  • serving your most loyal readers with content that they will be willing to pay for
  • generating new engaged readers by baiting them with quality articles that will slowly encourage them to convert and become your paying subscribers

As you already know, modern internet users are quite cautious with their money. They don’t really buy stuff based on impulse. It takes them more than a single glimpse at a product before they decide to commit to a sale. According to Accenture’s research, people are more likely to buy from sellers they recognize by name.

Brand recognition plays an important role in today’s sales processes. If you allow new audiences to take a peek behind and familiarize themselves with what you have to offer before forcing a paywall on them, they will be more likely to pay for your subscription. Simple as that.

The dynamic paywall: pros and cons

Just to confuse matters slightly (but only slightly), the metered paywall has evolved. The dynamic paywall shares many of the same traits (and pros and cons) as the metered approach, but has the advantage of tech of its side. Both The New York Times and The Wall Street Journal have implemented this on their sites with obvious success.

While the metered paywall sets a number of articles the reader may read without scrambling around for a credit card, the dynamic paywall uses machine learning to ascertain the point through the reader’s journey they’re likely to be the most receptive to a subscription offer.

There’s a flexibility with this approach that can, in the words of Digiday’s Max Willens, “muddy the value proposition” as different users can hit the paywall at different times. In the case of the New York Media group, the threshold for triggering the subscription offer is lower if readers are habitually consuming content across multiple titles in that brand. Readers using a single title would likely be able to read for free for longer because their loyalty is not considered to be quite as strong.

Having said that, this approach clearly has its advantages: the algorithms required to make these subscription placement decisions can reveal a more nuanced understanding of reader loyalty, which hopefully translates into a better retention rate because you’ve accurately identified genuinely habitual users. In short, there’s a flexibility here that’s obviously appealing.

Freemium paywall: pros and cons

Unlike the metered paywall that limits the number of free articles unsubscribed readers can consume for free per week (or other time period) on a certain website, the freemium model offers a few more options for the casual user. This specific model helps publishers separate the free from their premium content, meaning that casual readers get access to around 80% of published content, while those who have subscribed get to read it all.

In most cases, the content that is free to everyone usually comes in forms of breaking news, and complex, in-depth analyses and investigative stories remain locked down. A great example of an intelligently implemented freemium paywall is Dennik N.

For those who are not familiar with this publisher, Dennik N is independent Slovakian newspaper and website that has managed to reach an impressive number of 33,000 digital subscriptions in just 4 years. In 2018, the number of registered readers hit 220,000, while website visitors have increased to 762,000. But that was months ago, and the numbers have surely gone up again since then. There’s a separate article on State of Digital Publishing about this independent Slovakian publisher. You can read it here.

I also had the chance to talk with Tomas Bella, Co-Founder and Head of Digital of Dennik N. In an interview we did for Content Insights, Tomas shared his recipe for success and explained that Dennik N doesn’t have a vast pool of writers and that they live by old-school journalistic principles, meaning they invest in long-form content and put the focus on quality instead of quantity.

However, Dennik N still makes a certain amount of money from ads, so they still need to embrace their traffic.

Dennik N primarily focuses on investigative reporting. They don’t really publish a lot of content. Once you land on the publisher’s website, you will notice two things:

  • Free content comes in the form of very fast-breaking news
  • Long-form investigative pieces are placed behind the paywall

Dennik N doesn’t charge its readers for breaking news. That’s all free and accessible to everyone. Everything else is paid. Readers get a couple of paragraphs to view for free, and then a paywall goes up and they have to pay if they want to consume the publisher’s in-depth pieces.

As you can see from this example, the freemium subscription model offers the best of both worlds for small and medium-sized publishers. It makes it available for them to cash in on their hard work, operate on old school journalistic principles, build brand authority, while still leaving enough room to maintain another revenue stream and grab those low hanging fruit through ads.

Hybrid paywall: pros and cons

This is basically a combination of the freemium and metered paywall models, meaning that unsubscribed readers are given access to specific number of articles per month for free. The publisher basically flags each article individually as free or premium, making it impossible for the readers to read everything they want free of charge.

In practice, it looks something like this: you get to read five articles per month, but 30 percent of the content chosen by the administrators remains behind a paywall.

As with the freemium model, which content is free to read and which demands payment solely depends on your personal business strategy. It’s certainly never easy to decide what type of article you should consider putting behind a paywall, or what type of content is good enough to lure new readers to the website and then transform them into regular readers who will eventually become your subscribers.

There’s even a dilemma about what triggers the subscription anyway – whether it’s a single article or a group of articles that readers have been consuming over a longer period of time.

A great example of a hybrid paywall in use is Algemeen Dagblad. Owned by De Persgroep, Algemeen Dagblad, also known as AD.nl, is the biggest news website in all the Netherlands. It’s read daily by more than two million people from the region.

Algemeen Dagblad uses a specialized metered model with three free articles a month. Unregistered users have free access to content upon their arrival to the website, but at the end of any premium article they choose to read, they will see a message: “You just read a premium article” and it will count against the monthly allocation of freebies.

When the visitor arrives at the fourth article, the system remembers they’ve already used three of their free reads and they get a notice to either login or register.

This specific paywall model helps AD.nl give their casual readers a sense of the quality of content they can expect to see on this website. They believe that 4 articles is a decent enough sample size for someone to figure out if they plan to stick around on a specific domain or not. With this type of paywall, AD.nl has cut their casual traffic down to size and separated “article scrollers” from people who really want to consume their content.

Closing Words

As you can see from everything written above, choosing the right paywall for your media outlet is never an easy thing to do. If you take anything from what’s been laid out here, it’s that you shouldn’t just pick any paywall and hope things work out, but rather find the one that’s best suited for the size and nature of your publication. It’s not enough to switch to a subscription model and imagine your woes are over: whatever type you pick has to be at the centre of every aspect of your business. You need to implement it fully and stick to the plan in order to succeed. It’s time to abandon shady clickbait techniques and sacrifice some traffic in order to get more loyal readers that will actually consume your content and stick with you for a long time.

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