More and more publishers are putting up paywalls because ad revenues continue to reduce. According to a new report, “roughly 76% of publishers have a paywall in place, however, only 10% of news publishers report a thriving digital revenue model.”
The report, Why a paywall isn’t enough, covers the challenges faced by publishers trying to generate revenues by implementing a paywall strategy, and offers solutions to overcome them.
Here are highlights from the report:
“Thriving and sustainable digital community is just out of arms’ reach”
“While publishers have adopted paywalls for more control over their audiences and revenue, not all have been successful. 80% of publishers have trouble converting anonymous traffic to known subscribers, meaning a thriving and sustainable digital community is just out of arms’ reach for many,” the report states. It recommends improving audience engagement as a way to increase the effectiveness of paywalls.
Time and time again research (and real-world examples) have shown that a powerful way to convert visitors into paying customers is to engage them organically.Viafoura’s report on paywall strategy
The Athletic, a subscription-based sports publisher has been very successful in growing subscribers organically. It did so through top-quality content and live Q&A’s which helped it reach 100,000 subscribers in 2018—all without a single dollar of ad revenue, according to the report.
“Data plays a critical role in paywall strategy”
User engagement influences paywall effectiveness because:
- It yields rich user data which publishers can use to derive meaningful insights into their audiences. The insights would then help them create targeted and customized experiences for their readers.
- The users get value in the form of high quality content and opportunities to engage with a like-minded community in exchange for their email address and/or subscription fees.
Data plays a critical role in paywall strategy, according to the report. With cookie tracking getting limited due to browser restrictions and privacy regulations, it’s become challenging to analyze and understand user behavior.
However, publishers have access to first party data which reflects their audiences’ interactions and reading behaviors. It can help them create a well-rounded view of their readers.
The type of paywall used can make or break a publishing company
“The type of paywall a publisher chooses to use can make or break a publishing company. It all comes down to understanding the audience and their needs,” suggests the report.
There are 4 types of paywalls depending upon how they allows users access to content.
- Hard paywalls require users to pay for a subscription before content can be viewed. It’s a risky paywall strategy that is most likely to work for publishers who are well established and dominate their market. It can also be useful for those who target a niche audience.
- Freemium paywalls offer a combination of free and locked ‘premium’ content. One of the benefits to using a freemium paywall is that consumers have a chance to sample content. If they like what they see, paying or registering for more becomes easier. This type of paywall is best for a publisher with a large amount of casual users.
- Metered paywalls allow readers to view a fixed number of articles before requiring paid subscription for further content consumption. Many publishers, including The New York Times, and The Telegraph have got millions of subscribers using this strategy.
- Dynamic paywalls are a variant of the metered paywall. They are data driven and customize users’ access to content depending upon their interests, reading frequency, price sensitivity etc. Dynamic paywalls offer considerable flexibility to publishers for maximizing paid conversions based on user activity. They can also use their most valuable content to fuel subscriptions. Swedish newspaper Dagens Nyheter credits its dynamic paywall for 60% of its conversion rate.
“The stop rate, which is, the percentage of all digital users who are “stopped” by a subscription prompt, a paywall or a meter limit can be a key indicator of the level of engagement on your site,” the report suggests.
Publishers with a successful digital subscription business report stop rates of over 6%. The majority of publishers have stop rates of less than 1.8%. This means they are not being able to keep users engaged on their site long enough to trigger the paywall.
Making reader engagement core focus
Viafoura recommends focusing on growing and maintaining ‘super-users’ – the highly engaged readers who return and interact with a publisher’s content repeatedly. These are the readers that will drive the majority of revenue.
The company has found that the users that are most ready to pay for a subscription are those who:
- Consumes more than 5 pages per month
- Spend on average 40 seconds or longer per page, per month
According to recent research, publishers can improve chances of converting site visitors into paying customers by prompting them to gradually increase their engagement with the site.
For example, after a reader has consumed content, they can be asked to give it a like. The next step can be prompting them to post a comment about it, and so on. Such prompts can help increase the percentage of readers who reach high levels of participation.
The secret to keeping your audiences on your platform for longer is to engage them with interactive, social experiences.Viafoura’s report on paywall strategy
Research shows that loyalty in terms of social participation leads to more spending on added features and services on a website. These include:
- Allowing readers to share and receive useful information about content. It can be done through “like” buttons, rating systems and tagging content with user-suggested keywords.
- Encouraging community participation via chats, forums, internal blogs, comment options, sharing options and social or interest groups.
- Placing users in the moderator’s seat by giving them options to create new social groups on the website, moderate discussions and create content channels.
“Active community members are most likely to contribute economically only after interacting with the website’s features, consuming and organizing content, and becoming familiar with the website’s community. In fact, 80% of all user registrations are triggered on pages that feature on-site engagement tools and user-generated content,” according to the report.
In conclusion it states, “A paywall strategy provides ample opportunities for you to increase revenue while creating an enjoyable user experience. Coupled with a well-thought-out user engagement strategy, paywalls help extend the overall lifetime value of readers while strengthening brand loyalty.
“Figuring out how to effectively execute this approach to readership revenue will have the biggest impact in differentiating yourself from the rest of the market.”
The full report can be downloaded from Viafoura:
Why a paywall isn’t enough