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Are Paywalls Working For Digital Publishers?

The subscription model is far from straightforward

3Oct

Essentially, there were two schools of thought when digital publishers began attempting to monetize their content. There were those that knew that monetization was going to be a long-term issue and that normalizing paywalls was a potential solution. On the other hand, there were those that believed in an accessible press that was open to all, not just those with a subscription. Years on, this split still exists, though many have dismantled their paywalls after they failed to bring in the projected revenue - The Sun and the LA Times being two examples, the latter of which dropped the paywall on its events calendar after traffic fell by 97%.

The need for paywalls is clear - newspapers as an industry lost both commercial and classified ads to the likes of Google and CraigsList respectively, while print circulation shrunk dramatically as audiences moved themselves online. Putting up a paywall requires faith in the content you are putting out as an organization, as well as a belief that your readers will pay for it. It has worked as a model for some major mainstream publications, such as the Wall Street Journal which added 300,000 paying subscribers between March 2016 and March 2017. Others, like the New York Times and The Guardian, opt for the softest paywall imaginable, blocking access to their mobile apps only, unless users have a paid subscription. There is, clearly, no one definitive method and experimentation can be costly.

Then there's the argument that paywalls are damaging to society more widely. If quality journalism is kept behind paywalls, then only those with the disposable cash to pay a subscription have access to it. In turn, this dynamic bolsters the traffic of less high quality sources, or in many cases those publishing mistruths or sensationalist think-pieces to attract all important clicks. Of course, it has always been the case that print newspapers cost money, but the advertising revenue they pulled in meant they were comparatively cheap, and the vast majority could afford them. It's a difficult balance for publishers to strike, then - the need to monetize against the desire to have your journalism available to all at the click of a button.

Google's relationship with paywalls has been prickly. Until very recently the search engine giant had operated a controversial 'first click free' policy, which required publishers to offer at least three free articles per day for new visitors in order for them to rank well on its all-powerful search index. This meant that even publications with paywalls would have no choice but to offer their content for free in order to meet Google's standards. Just this week, though, Google has relaxed the policy, now allowing publishers to decide how many (if any) free pieces of content they offer users before encouraging paid subscriptions. Opting out won't affect search rankings, though Google deems 10 free articles per month as 'a good starting point.'

Chief executive of News Corp, Robert Thomson, identified the problems a lot of publishers had found with first click free in terms of Google forcing their hand. 'If you don’t sign up for ‘first click free’, you virtually disappear from a search,' he said. 'Given the power of that Google platform, that is disadvantaging premium content of great provenance.' The effect of falling down the search rankings had been severe - the Wall Street Journal noticed a 38% reduction in Google Search traffic when it disabled free access to its articles, along with an 89% reduction in traffic from Google News.

'Google's decision to let publishers determine how much content readers can sample from search is a positive development,' said Kinsey Wilson, an adviser to New York Times CEO Mark Thompson in a statement. 'We're encouraged as well by Google's willingness to consider other ways of supporting subscription business models and we are looking forward to continuing to work with them to craft smart solutions.' Publishing has been searching for the ultimate 'smart solution' for years, though, and it seems unlikely that a one-size-fits-all paywall structure will emerge that can cater for all different types of publication. The controversy surrounding first click free is representative of an industry in which the key players have greatly differing needs.

Ultimately, paywalls can work, but only for a select few publishers - those with particular niches or extremely dedicated readerships. The Financial Times, for example, has both a niche and (almost by definition) a wealthier target audience than its more broad competition, and has therefore been relatively successful in gaining subscribers. UK tabloid The Sun, on the other hand, dropped its paywall less than two years after putting it in place to keep pace with its free - and, in many ways, similar - competition from the likes of the Mail Online. For every paywall success story there are examples of it failing or moral arguments against it. There are companies working to make paywalls smarter - a pay as you go system that deducts a small amount of credit per article read, for example - and we may yet get to a point at which most major publications operate some form of paywall. For now, though, there is no easy evaluation of the efficacy of a paywall; for some they work, for others they're simply not viable. 

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