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Decide if a paywall strategy is right for your business

Organizations that sell content might benefit from a paywall. Here are some questions to ask when deciding if a paywall strategy is right for your business.

Paywalls are now an established part of the digital landscape, as publishers have sought new ways to drive revenue. The odds are good that in the last few weeks -- if not hours -- you hit several paywalls while consuming your daily news.

Organizations that make money directly from their content may benefit from a paywall.

Here are some questions to ask before deciding whether a paywall strategy is right for your business.

What types of paywalls are available?

The goal of paywall content is to turn visitors into subscribers. While organizations like it when visitors pay to see a single article, or a month of articles, subscribers help businesses build a stronger revenue stream.

There are three basic types of paywalls. Soft paywalls offer partial access to content. Tiered paywalls offer different levels of access based upon user subscriptions. Finally, hard paywalls lock everything down and are for sites that serve very specific niche industry content.

Metered paywalls are the most common type of soft paywall, offering a limited number of free visits each month. The New York Times originally started with 20 free views per month when leadership implemented a paywall. Today they, along with other online newspapers such as The Washington Post, have lowered the limit to five free monthly views.

Types of paywalls
Types of paywalls

Other businesses use a tiered model, which provides some content for free while locking higher-quality content behind a paywall. ESPN uses this approach. The company offers news items for free and places in-depth analysis articles -- including enhanced fantasy sports tools -- behind a paywall for "insiders." This membership model is like many industry associations that offer periodicals and research reports as part of an overall membership package.

How do paywalls work?

The mechanics behind paywalls are constantly evolving. Today, websites implement paywalls primarily using cookies. However, people have learned how to work around this approach by using private browsing, deleting cookies and changing browsers. This has led to technical innovations by content providers.

The goal of paywall content is to turn visitors into subscribers.

In the past year, many sites, including The Washington Post, eliminated the private browsing work-around. They accomplished this by making viewing the website in private -- or incognito -- mode a benefit of having a digital subscription. Without a subscription, the paywall is set to zero free views while in private mode.

And there are newer technologies that are even more sophisticated that integrate with website analytics and content management system (CMS) personalization features to make paywalls dynamic. The software determines, based upon a visitor's profile, if they are likely to pay for an article today or ever, enabling organizations to decide when users encounter the paywall and customize the subscription package. Moreover, organizations can use this data to map users across browsers and devices to make working around the monthly limit more challenging.

Is a paywall strategy the right move?

If an organization is an established digital publisher, it likely already has a paywall; if it is not, ask, "What is the organization's market?" People pay for either a good general news source or deep expertise, a Reuters Institute study found. Some key questions business leaders should ask about their content are:

  • Are you viewed as authoritative? If an organization's thoughts are highly sought, then people will pay.
  • Do you have deep market penetration? Local newspapers and industry publications often have the necessary focus, if their market is large enough to provide enough support.
  • Is it difficult for people get the same information in other locations? If an organization is creating unique content, such as research reports or event minutes, then it is in much better shape.
  • How is your engagement? People who are able to engage as part of a community are much more likely to subscribe. This includes the ability to comment on content either directly or in a set of community forums. They are no longer a subscriber but a member, and that mindset inspires more loyalty and commitment.
  • Is content what you are selling, or is it a way to make a sale? If content is primarily a marketing tool, a paywall is the last thing an organization needs to implement. A better option is trading for information, such as an email address or other information that may improve the business's marketing efforts.

Other paywall considerations?

Once a business is ready to implement a paywall, the next questions to ask are what kind of paywall strategy and technology will work with the established CMS. Many larger CMS vendors provide the tools to implement a paywall by requiring a login to access content. Organizations can then require payment from users to reach the desired level of access.

An important detail to note from the study is that people typically only pay for one subscription. While the study focused on news organizations, the lesson holds true to other markets. Organizations that are an industry resource should make sure they are the authoritative resource. Businesses should also enhance subscribers' experiences by adding other benefits. Examples include commenting on articles, exclusive access to a mobile app to read content and access to useful tools such as ROI calculators and industry benchmarks.

In the end, a paywall will succeed if an organization has strong content that people can't get anywhere else. It is not a technology challenge, it is a content challenge.

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