Paywalls: Can Paying for Information Save Digital Media?

A glance around online news outlets in 2019 reveals a startling change to digital media: Information that used to be free is now locked behind a paywall.

Major news outlets like The New York Times, The Washington Post, and The New Yorker require paid subscriptions for unlimited access to their content. Some sites offer a handful of articles for free before dropping the paywall. Others lift the paywall restriction if readers agree to disable ad-blockers.

But the trend is clear: Online media is shifting away from ad-sponsored content and moving to a subscription model.

It’s not a smooth transition, though. It’s estimated that 90% of readers who encounter a paywall will simply bounce off the site, choosing either to find the news somewhere else or skip reading it entirely. Others will use up their free articles each month without ever converting to paying customers.

The average reader, in other words, is prone to be a window shopper, unwilling to commit.

Are Paywalls Necessary?

Information may want to be free, but journalists need to get paid. That’s the fundamental tension at the heart of journalism, and it’s not a new problem.

When newspapers really took off in the 1830s, it was on the backs of advertisers. Subscriptions have never really covered the costs of paper distribution; ads and classifieds have always subsidized readerships even as far back as the 19^th century.

The problem is ad revenue has simply dried up for many digital content producers. It’s due in large part to media mega-giants like Facebook and Google. Advertisers just aren’t going to spend their money placing ads in newspapers when they can get cheap, highly-targeted, and extremely effective access to buyers on social media. Couple that with the always-rising popularity of ad blocking software and you have a recipe for potential disaster.

Some online content creators have shifted their techniques.

BuzzFeed’s native advertising model, for example, runs “sponsored content” provided by brands. The content, in turn, subsidizes the more serious journalistic pieces on BuzzFeed News. But such branded interests raise ethical concerns for some consumers of the news, and in an environment where readers are concerned about “fake news” and media reliability, there’s more pressure than ever for media outlets to be transparent about their funding.

Do Paywalls Work?

There are a few immediate advantages to the subscription model:

• In order to be worth the price of entry, paywall-bearing sites are forced to offer content that is deeper, richer, and of higher quality than what can be found for free elsewhere.
• A direct subscription model avoids the potential influence of corporate money from advertisers, which may keep reporting more balanced.
• Sites subsidized by readers are somewhat insulated against changes brought by tech giants to the digital economy.

However, despite these compelling advantages, there also are plenty of drawbacks to the paywall model:

• It may not be enough to cover the costs of production.
• News consumption may become more fragmented as consumers subscribe to just a single news source.
• Information may be tailored to the tastes of the readership that’s paying the bills. This creates new sources of partisanship or bias.
• The sites that are most successful will likely be those with well-known names and a large reader base, meaning news could once again pool into conglomerates.

At this point, pay-to-read news sites are still mostly in their infancy, and it’s hard to know for sure what the long-reaching implications might be.

It’s possible that the experiment will fail as it did for many sites that tried to put up paywalls a decade ago. But it’s just as likely that consumer tastes have shifted enough to allow a change in paradigm.

Alternative Funding Models

As media sites contemplate new ways to stay afloat in an ever-changing sea of digital economics, it might pay to think outside the box.

One digital-native staple that has served the mobile app and gaming community well is the “freemium” model. With freemium, the base functionality is free but additional features can be unlocked for a fee. There are a few ways freemium could be employed in digital publications:

• The free version of the site could be ad-heavy, with a subscription removing the ads (some sites already employ this option).
• Sites could enforce a reading cooldown, where readers could only access a certain number of articles per day unless paying.
• Allow free access to articles but provide additional benefits like swag, multimedia, exclusive content, etc. to paying members.

Tip jars, voluntary donations, nonprofit-style funding drives, and more are all options worthy of exploration. There may be other long-term funding opportunities yet to be unearthed in the digital landscape.

The important takeaway is that, as always, the future of media is changing, and only those who can adapt will survive. But if the history of the news has taught us anything, it’s that journalism always manages to find a way to hang in there.

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Tiana Gibbs is an Associate Customer Content Specialist with PR Newswire moonlighting as a freelance copywriter. When not writing for the web, she can be found trying (and sometimes failing) to build an urban homestead in the Land of Enchantment.