There has been a lot of talk in recent years about how many news sites are locking their content behind paywalls, despite the fact they lose online advertising revenue by doing so. But a new poll shows that 73% of all newspapers are behind some kind of paywall.
Paywalls vary from hard paywalls, where nearly all content or premium content is locked behind a paywall, to soft paywalls which allow visitors to view a certain number of articles per month before access is turned off and a paid subscription is required to view more. With 73% of all newspapers behind a paywall, they found that 40% of those were behind a hard paywall while the remaining 60% had a soft metered paywall instead.
However, not all paywalls are profitable when you offset the loss of ad revenue, including one newspaper who reported for every $1 they lost in online ad revenue from the implementation of a paywall, they only gained $0.05 from paywall subscriptions, something that can have a devastating effect on an already financially strained business.
“We took down our paywall because it had a drastic effect on our online advertising revenues,” reported one mid-sized daily newspaper. “We traded every dollar in advertising we lost for a nickel in online subscription revenue. Since we took the paywall down last year, our online impressions have doubled and our online revenue continues to increase by a significant percentage every year.
“Every market is different, and we are not saying this is the right approach for everyone, but it worked for us.”
Loss of traffic to an online news site, regardless of the reason, can be very costly, as some German news sites discovered when they sought to charge Google for including their snippets and thumbnails. But when the search engine instead chose to only link to those sites with a title and no description, the loss of 80% of Google News traffic – and the associated ad revenue from those visitors – was too costly for the news sites to continue with.
But a subscription model is what newspapers have known for decades. Unfortunately, many can’t seem to grasp that the same thing applied to online newspapers doesn’t mean everyone with scramble to pay – for the most part, unless the newspaper is serving a need that a comparable thing isn’t offered for free (think Financial Times or New York Times), those visitors are just going to find it elsewhere for free.
This news comes hot on the heels of a recent announcement by the Toronto Star, who plans to remove their paywall in 2015 in order to attract younger readers. However, more news publications, such as the Irish Times, are planning upcoming launches to new paywalls.
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