With fewer people picking up their local newspapers and more people consuming content on their mobile phones, the quest for sustainable revenue has caused a major challenge for publishers of all sizes.

Making things worse, advertising revenue – once a reliable income stream – has shrunk due to the prevalence of ad blockers, and managing the changes in third-party cookie support hasn’t been straightforward either.

Over time, paywalls have evolved into a reliable source of consistent revenue for publishers. But as these now compete with countless other sources on social media, driving traffic to their site to begin with is an even greater challenge than before.

The 2023 edition of the Reuters Institute Digital News Report highlighted the competitive nature of today’s media landscape. TikTok’s use for news gathering grew from 1% in 2020 to 6% in 2023, while Instagram’s has also increased, from 2% in 2014 to 14% last year.

With the ongoing financial pressures on publishers and the constant battle for attention, is there still a place for the paywall?

Peeking over the paywall: A brief history

Paywalls have been around since the 1990s, with the Wall Street Journal (WSJ) arguably pioneering the system, having implemented a hard paywall back in 1996.

At that time, most newspapers didn’t need to resort to these, as they made enough from advertising revenue and print margins were still positive.

Today, things are markedly different. In 2019, a Reuters Institute report showed that 69% of “leading newspapers” in Europe and the United States used some form of online paywall.

This trend has grown in recent times, especially in the United States, where statistics show it has increased from 60% to 76% over the past seven years.

So what changed?

One of the main explanations for this shift is the decline in the demand for print newspapers, which has forced publishers to look toward alternative sources of revenue.

The abundance of free news online has also reduced the incentive for people to pay for it (and this, in turn, explains why so many established news organizations have pivoted from straightforward reporting to analysis and opinion pieces).

Some might argue that the average person is more likely to try and find their way around a paywall than to simply subscribe to the publication in question.

In the UK, merely 9% of people surveyed in 2023 said they had paid for online news in the past year.

A similar attitude can be seen in the US market too, where 51% of those questioned as part of a 2024 Medill survey said that “no one should pay for local news.”

What are the different types of paywalls?

Publishers use a range of different paywall models to restrict access to content and generate revenue. Here’s a breakdown of the main approaches.

Hard paywalls

The simplest form is whereby this paywall restricts all content and forces the reader to subscribe before showing any meaningful level of detail.

For publications that have high-value stories, like the WSJ, this model can be effective as it helps build a loyal user base, but also limits the extent to which your news can reach.

Metered paywalls

Metered paywalls balance access and exclusivity by allowing readers to view a limited number of articles before blocking further access.

These can often be found with a clear pop-up telling readers how many articles they have left in a given time frame, the idea being that such regular reminders may encourage them to reconsider their level of subscription.

Freemium paywalls

This model provides a mix of free and premium content, whereby readers can access basic articles for free, while in-depth analysis or exclusive reporting requires a subscription.

This is common in B2B scenarios and allows users to experience the publication’s value before committing.

Dynamic paywalls

Dynamic paywalls personalize access based on user behavior, and aim to optimize their subscription offers.

Although it might take some time to set up, offering a more personalized approach that considers factors like reading habits and visit frequency should, in theory, increase the potential for conversion.

When paywalls have worked

Perhaps one of the most successful implementations of a paywall was by the New York Times.

Launched in March 2011, the company revealed its subscription funnel in an article titled How The New York Times Uses Machine Learning To Make Its Paywall Smarter, which highlighted the effectiveness of a layered, dynamic approach.

By using a limit system combined with AI, the New York Times allows visitors to access a certain number of articles before pushing the paywall in front of them to register.

After that, the user is in their loop and can access additional articles. However, now they’re part of their system and are gathering data, the organization can retarget more effectively and encourage them to subscribe to their wider product which generates revenue.

This bundle of entertainment and information approach has proven more successful than previous paywall strategies, with almost half (41%) of its subscribers having either “bundles or multi-product packages.”

This recurring revenue is what many publishers strive for in today’s environment and it creates a direct bond between the readers and the publisher, although it does rely on consistent levels of quality, or else they risk reputational risk and losing customers for good.

When paywalls haven’t worked

On the flip side, there have been a few instances where bringing in paywalls hasn’t quite worked, for whatever reason. British news outlet The Sun is one example of this type of u-turn.

The Sun’s publisher, News UK, originally decided to place all articles behind a paywall in August 2013, before backtracking just over two years later.

Subscription services and paywalls are often a tougher sell for everyday news since there isn’t anything much exclusivity, so people can go elsewhere to find similar stories.

Similarly, the Toronto Star explained that paywalls only created a higher churn rate and reverted to focusing on paid editorial pieces and advertising.

Moving forward: Are paywalls sustainable?

Today’s online news space is filled with clickbait and entertainment-led articles, which are often produced simply to get attention rather than give true value.

This “true value” requires transparency; a clear explanation of the true cost of quality journalism and the consequences of not supporting it financially.

For publishers that decide to stay on the paywalled path, their future relies on convincing readers of their value.

Readers are more likely to subscribe if they believe they’re getting unique, high-quality, and in-depth reporting that they can’t find elsewhere – or, as we have seen, if they can gain additional value through the bundling of additional services.

Paywalls offer some level of financial stability, but a surge in unsubscribers is all it takes for a publisher to find itself in a worse position than before.

And no matter what, at least for the foreseeable, there will be a certain section of the public that believes news should be free.

As Richard Stengel writes for The Atlantic: “Democracy Dies Behind Paywalls”. Ironically, the article is behind a paywall.

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