A paywall is a system that prevents Internet users from accessing webpage content without a paid subscription. There are both "hard" and "soft" paywalls in use. "Hard" paywalls allow minimal to no access to content without subscription, while "soft" paywalls allow more flexibility in what users can view without subscribing, such as selective free content and/or a limited number of articles per month, or the sampling of several pages of a book or paragraphs of an article. Newspapers have been implementing paywalls on their websites to increase their revenue, which has been diminishing due to a decline in print subscriptions and advertising revenue.
While paywalls are used to bring in extra revenue for companies by charging for online content, they have also been used to increase the number of print subscribers. Some newspapers offer access to online content, including delivery of a Sunday print edition at a lower price than online access alone. News sites such as BostonGlobe.com and NYTimes.com use this tactic because it increases both their online revenue and their print circulation (which in turn provides more ad revenue).
Creating online ad revenue has been an ongoing battle for newspapers – currently an online advertisement brings in only 10–20% of the funds brought in by a duplicate print ad. It is said that "neither digital ad cash nor digital subscriptions via a paywall are in anything like the shape that will be needed for [newspapers] to take the strain if a print presence is wiped away." According to Poynter media expert Bill Mitchell, in order for a paywall to generate sustainable revenue, newspapers must create "new value" (higher quality, innovative, etc.) in their online content that merits payment which previously free content did not. Most news coverage of the use of paywalls analyzes them from the perspective of commercial success, whether through increasing revenue by growing print subscriptions or solely through paywall revenue. However, as a solely profit-driven device, the use of a paywall also brings up questions of media ethics pertaining to accessible democratic news coverage.
- 1 History
- 2 Types
- 3 Reception
- 4 Ethical implications
- 5 Counter strategies
- 6 Abandoned paywall initiatives
- 7 Current implementations
- 8 Planned paywalls
- 9 Circumvention
- 10 See also
- 11 References
The history of the paywall is one of fluctuation. The first major newspaper to implement a paywall was The Wall Street Journal in 1997, which gained more than 200,000 subscribers in a little over a year. The Wall Street Journal has retained its "hard" paywall since its inception. Despite the presence of the paywall, The Wall Street Journal has remained popular, acquiring over one million users by mid-2007, and 15 million visitors in March 2008.
In 2010, following in the footsteps of The Wall Street Journal, The Times (London) implemented a "hard" paywall; a decision which was highly controversial, because unlike The Wall Street Journal, The Times is a general news site, and it was said that rather than paying, users would seek the information for free elsewhere. Following the paywall’s implementation, however, it has been deemed neither a success nor a failure, having recruited 105,000 paying visitors. In contrast, The Guardian has resisted the use of a paywall, citing "a belief in an open internet" and "care in the community" as its reasoning – an explanation found in its welcome article to online news readers who, blocked from The Times’s site following the implementation of their paywall, came to The Guardian for online news. The Guardian has since experimented with other revenue-increasing ventures like open API. Other papers, prominently The New York Times, have oscillated between the implementation and removal of various paywalls. Because online news remains a relatively new medium, experimentation is key to maintaining revenue while keeping online news consumers satisfied.
Some implementations of paywalls proved unsuccessful, and have been removed. Experts who are skeptical of the paywall model include Arianna Huffington, who declared "the paywall is history" in a 2009 article in The Guardian. In 2010, Jimmy Wales (of Wikipedia fame) reportedly called The Times's paywall "a foolish experiment." One major concern was with content so widely available, potential subscribers would turn to free sources for their news. The adverse effects of earlier implementations included decline in traffic and poor search engine optimization.
Paywalls have become controversial, with partisans arguing over the effectiveness of paywalls in generating revenue and their effect on media in general. Critics of paywalls include many businessmen, academics such as media professor Jay Rosen, and journalists such as Howard Owens and media analyst Matthew Ingram of GigaOm. Those who see potential in paywalls include investor Warren Buffett, former Wall Street Journal publisher Gordon Crovitz, and media mogul Rupert Murdoch. Some have changed their opinions of paywalls. Felix Salmon of Reuters was initially an outspoken skeptic of paywalls, but recently expressed the opinion that they could be effective. A NYU media theorist, Clay Shirky, was initially a skeptic of paywalls, but in May 2012, wrote, "[Newspapers] should turn to their most loyal readers for income, via a digital subscription service of the sort the [New York Times]"  Paywalls are rapidly changing journalism, with an impact on its practice and business model, and on freedom of information on the Internet, that is yet unclear.
The "hard" paywall, as used by The Times, requires paid subscription before any of their online content can be accessed. A paywall of this design is considered the riskiest option for the content provider. It is estimated that a website will lose 90% of its online audience and ad revenue only to gain it back through its ability to produce online content appealing enough to attract subscribers. News sites with "hard" paywalls therefore succeed if they:
- Provide added value to their content
- Target a niche audience
- Already dominate their own market
Many experts denounce the "hard" paywall because of its inflexibility, believing it acts as a major deterrent for users. Financial blogger Felix Salmon wrote that when one encounters a "paywall and can’t get past it, you simply go away and feel disappointed in your experience." Jimmy Wales, founder of the online encyclopedia Wikipedia, argued that the use of a "hard" paywall diminishes a site's influence. Wales stated that, by implementing a "hard" paywall, The Times "made itself irrelevant." Though the Times had potentially increased its revenue, it decreased its traffic by 60%.
The "soft" paywall is best embodied by the metered model. The metered paywall allows users to view a specific number of articles before requiring paid subscription. In contrast to sites allowing access to select content outside of the paywall, the metered paywall allows access to any article as long as the user has not surpassed the set limit. The Financial Times allows users to access 10 articles before becoming paid subscribers. The New York Times controversially implemented a metered paywall in March 2011 which lets users view 20 free articles a month before paid subscription. As of April 2012, New York Times reduced the number of free articles per month to 10. Their metered paywall has been defined as not only soft, but "porous," because it also allows access to any link posted on a social media site, and up to 25 free articles a day if accessed through a search engine. The model is designed to allow the paper to "retain traffic from light users", which in turn allows the paper to keep their number of visitors high, while receiving circulation revenue from the sites heavy users. Using this model, The New York Times garnered 224,000 subscribers in the first three months. While many proclaimed The New York Times' paywall a success after it reported a profit in the third quarter of 2011, the profit increase is said to be “ephemeral” and “largely based on a combination of cutbacks and the sale of assets.” Though the success of a metered paywall would create revenue for the newspaper and increased freedom for the public, the profitability of the metered model has yet to be sufficiently proven.
The Boston Globe implemented a version of this strategy in September 2011 by launching a second website, BostonGlobe.com, to solely offer content from the paper behind a hard paywall, aside from most sports content, which was kept open to compete against other local sports websites. BostonGlobe.com operates alongside a second, pre-existing news website Boston.com, which now only contains a limited amount of content from the subscription website on a delay, but carries a larger focus on community-oriented news. Boston Globe editor Martin Baron described them as "two different sites for two different kinds of reader – some understand [that] journalism needs to be funded and paid for. Other people just won't pay. We have a site for them." By March 2014, the site had amassed over 60,000 digital subscribers; at that time, the Globe announced that it would replace the hard paywall with a metered system allowing users to freely read 10 articles in a 30-day period. Boston Globe editor Brian McGrory believed that an ability to sample the site's premium content would encourage more people to subscribe to the service. At the same time, McGrory also announced plans to give Boston.com a more distinct editorial focus, with a "sharper voice that better captures the sensibilities of Boston", while migrating other content by Globe writers, such as blogs from Boston.com to the paper's website, but keeping them freely available.
Professional reception to the implementation of paywalls has been mixed. Most discussion of paywalls centers on their success or failure as business ventures, and overlooks their ethical implications for maintaining an informed public. In the paywall debate there are those who see the implementation of a paywall as a "sandbag strategy" – a strategy which may help increase revenue in the short term, but not a strategy that will foster future growth for the newspaper industry. For the "hard" paywall specifically, however, there seems to be an industry consensus that the negative effects (loss of readership) outweigh the potential revenue, unless the newspaper targets a niche audience.
There are also those who remain optimistic about the use of paywalls to help revitalize floundering newspaper revenues. Those who believe implementing paywalls will succeed, however, continually buffer their opinion with contingencies. Bill Mitchell states that for a paywall to bring new revenue and not deter current readers, newspapers must: "invest in flexible systems, exploit their journalists' expertise in niche areas, and, crucially, offer readers their money's worth in terms of new value." The State of the News Media’s 2011 annual report on American journalism makes the sweeping claim that: "[t]o survive financially, the consensus on the business side of news operations is that news sites not only need to make their advertising smarter, but they also need to find some way to charge for content and to invent new revenue streams other than display advertising and subscriptions." Even those who do not believe in the general success of paywalls recognize that, for a profitable future, newspapers must start generating more attractive content with added value, or investigate new sources of earning revenue.
Proponents of the paywall believe that it may be crucial for smaller publications to stay afloat. They argue that since 90 percent of advertising revenues are concentrated in the top 50 publishers, smaller operations can't necessarily depend on the traditional ad-supported free content model the way that larger sites can. Many paywall advocates also contend that people are more than willing to pay a small price for quality content. In a March 2013 guest post for VentureBeat, Malcolm CasSelle of MediaPass stated his belief that monetization would become "something of a self-fulfilling prophecy: people [will] pay for content, and that money goes back into making the overall content even better."
In April 2013, the Newspaper Association of America released its industry revenue profile for 2012, which reported that circulation revenue grew by 5 percent for dailies, making it the first year of circulation growth in ten years. Digital-only circulation revenue reportedly grew 275%; print and digital bundled circulation revenue grew 499%. Along with the shift towards bundling print and online into combined access subscriptions, print-only circulation revenue declined 14%. This news corroborates a growing belief that digital subscriptions will be the key to securing the long-term survival of newspapers.
General user response to the implementation of paywalls has been measured through a number of recent studies which analyze reader’s online news consumption habits. A Canadian study completed by the Canadian Media Research Consortium entitled "Canadian Consumers Unwilling to Pay for News Online", directly identifies the Canadian response to paywalls. Surveying 1,700 Canadians, the study found that 92% of participants who read the news online would rather find a free alternative than pay for their preferred site (in comparison to 82% of Americans), while 81% stated that they would absolutely not pay for their preferred online news site. Based on the poor reception of paid content by the participants, the study concludes with a statement similar to those of the media experts, stating, with the exception of prominent papers such as The Wall Street Journal and The Times that given the "current public attitudes, most publishers had better start looking elsewhere for revenue solutions."
Deterioration of the online public sphere
Hackett argues that a "forum on the internet [...] can function as a specialized or smaller-scale public sphere." In the past, the internet has been an ideal location for the general public to gather and discuss relevant news issues – an activity made accessible first through free access to online news content, and subsequently the ability to comment on the content, creating a forum. Erecting a paywall restricts the public’s open communication with one another by restricting the ability to both read and share online news.
The obvious way in which a paywall restricts equal access to the online public sphere is through requiring payment, deterring those who do not want to pay, and barring those who cannot from joining the online discussion. The restriction of equal access was taken to a new extreme when the UK's The Independent, in the fall of 2011, placed a paywall on their American and Canadian readers and not their national audience. Online news media have the proven ability to create global connection beyond the typical reach of a public sphere. In Democratizing Global Media, Hackett and global communications theorist Yuezhi Zhao describe how a new "wave of media democratization arises in the era of the internet which has facilitated transnational civil society networks of and for democratic communication." By placing a paywall on their international readers, The Independent hinders the growth and democratic quality of the public sphere created by the internet.
The use of paywalls has also received many complaints from online news readers regarding an online subscription’s inability to be shared like a traditional printed paper. While a printed paper can be shared among friends and family, the ethics behind sharing an online subscription are less clear because there is no physical object involved. The New York Times' "ethicist" columnist, Ariel Kaminer, addressing the question of sharing online subscription, states that "sharing with your spouse or young child is one thing; sharing with friends or family who live elsewhere is another." The reader comments following Kaminer’s response focus on the dichotomy between paying for a printed paper and paying for an online subscription. A printed paper’s ease of access meant that more individuals could read a single copy, and that everyone who read the paper had the ability to send a letter to the editor without the hassle of registering or paying for the subscription. As such, the use of a paywall closes off the communication in both the personal realm and online. This opinion is not just held by online news readers, but also by opinion writers. Jimmy Wales comments that he "would rather write [an opinion piece] where it is going to be read", declaring that "putting opinion pieces behind paywalls [makes] no sense." Without easy access to both read and share insights and opinions, the online news platform loses an essential characteristic of democratic exchange.
Paying to stay informed
The use of a paywall to bar individuals from accessing news content online without payment, brings up numerous ethical questions. According to Hackett, media are already "failing to furnish citizens with ready access to relevant civic information." The implementation of paywalls on previously free news content heightens this failure through intentional withholding. Hackett cites "general cultural and economic mechanisms, such as the commodification of information and the dependence of commercial media on advertising revenue" as two of the greatest influences on media performance. According to Hackett, these cultural and economic mechanisms "generate violations of the democratic norm of equality." Implementation of a paywall addresses and intimately ties the two mechanisms cited by Hackett, as the paywall commodifies news content to bring in revenue from both readers and from increased circulation of printed paper’s ads. The result of these mechanisms, as stated by Hackett, is an impediment to "equal access to relevant [news] facts." The commodification of information–making news into a product that must be purchased–restricts the egalitarian founding principal of the newspaper. Editor’s Weblog reporter Katherine Travers, addressing this issue in a post discussing the future of The Washington Post, asks, "is digital subscription as permissible as charging a couple of dollars now and then for a paper copy?" While subscription fees have long been attached to print newspapers, all other forms of news have traditionally been free. The UK's Daily Mail argues that print revenue is unique because "people pay for the convenience of print in recognition of the special cost of production and delivery of a tangible product and because they purchase it whole." Online news, in comparison has existed as a medium of free dissemination. Poynter digital media fellow Jeff Sonderman outlines the ethical tension created by a paywall. Sonderman explains that "[t]he underlying tension is that newspapers act simultaneously as businesses and as servants of the public’s interest. As for-profit enterprises, they have the right (the duty, even) to make money for shareholders or private owners. But most also claim to have a social compact, in which they safeguard the entire public interest and help their entire community shape and understand its shared values." By implementing a paywall before experimenting with other revenue increasing initiatives, a newspaper arguably puts profit before the public.
While there has been little coverage and discussion of the ethical implications of the paywall regarding newspapers’ obligation to maintain a generally informed public, there are two prominent instances where companies have addressed the restriction of online news coverage. First is the removal of paywalls in the face of breaking news (news covering national or local emergencies). Second is Google’s "First Click Free" application, which news providers can implement if they wish to make news stories of interest accessible to readers regardless of a paywall.
Some newspapers have removed their paywall from blocking content covering emergencies. When Hurricane Irene hit the United States' east coast in late August 2011, The New York Times declared that all storm related coverage, accessed both online and through mobile devices, would be free to readers. The New York Times' assistant managing editor, Jeff Roberts, discusses the papers decision, stating: "[w]e are aware of our obligations to our audience and to the public at large when there is a big story that directly impacts such a large portion of people." In his article discussing the removal of paywalls, Soderman commends The New York Times' action, stating that, while a publisher "commits to a paywall as the best business strategy for his news company, there may be some stories or subjects which carry such importance and urgency that it is irresponsible to withhold them from nonsubscribers." While creating holes in a paywall demonstrates an ethical conscience, it also suggests that The New York Times does not believe they have "an obligation to their audience" to provide in-depth coverage (beyond the limits of their paywall) on subjects other than natural (or even major man-made) disasters.
New revenue initiatives
Given the overwhelming opinion that, regardless of paywall success, new revenue sources must be sought out for newspapers' financial success, it is important to highlight new business initiatives. In addition to erecting paywalls, newspapers have been increasingly exploiting tablet and mobile news products, the profitability of which remains inconclusive. Some newspapers have also embraced targeting niche audiences, such as the Daily Mail's Mail Online in the UK. Another strategy, pioneered by The New York Times, involves creating new revenue by packaging old content in e-books and special feature offerings, to create an appealing product for readers. The draw of these packages is not just the topic but the authors and the breadth of coverage. According to reporter Mathew Ingram, newspapers can benefit from these special offerings in two ways, first by taking advantage of old content when new interest arises, such as an anniversary or an important event, and second, through the creation of packages of general interest. The New York Times, for example, has created packages on baseball, golf and the digital revolution.(ebooks)
Alternative revenue initiative: API
An open API (application programming interface) makes the online news site "a platform for data and information that [the newspaper company] can generate value from in other ways." Opening their API makes a newspaper's data available to outside sources, allowing developers and other services to make use of a paper's content for a fee. The Guardian, in keeping with its "belief in an open internet", has been experimenting with the use of API. The Guardian has created an "open platform" which works on a three level system:
- Base/Free – The Guardian's content is free to anyone for personal and non-commercial uses
- Commercial – Commercial licenses are available for developers to use the API content if they agree to keep the associated advertising
- "Bespoke" Arrangement – Developers can partner with the newspaper, using specific data to create a service or an app, the revenue from which will be shared
While an open API is regarded as a gamble just like a paywall, journalist Matthew Ingram ethically notes that the use of an open API aims at "profiting from the open exchange of information and other aspects of an online-media world, while the [paywall] is an attempt to create the kind of artificial information scarcity that newspapers used to enjoy." An open API keeps news content free to the public while the newspaper makes a profit from the quality and usefulness of its data to other businesses. The open API strategy can be commended because it takes the pressure off of the news room to continually investigate and explore new means of revenue. Instead, the open API strategy relies on the interest and ideas of those outside the newsroom, to whom the site's content and data are attractive.
- The New York Times — TimesSelect
- The original online-subscription program, TimesSelect, was implemented in 2005 in an effort to create a new revenue stream. TimesSelect charged $49.95 a year, or $7.95 a month, for online access to the newspaper's archives. In 2007, paid subscriptions were earning $10 million, but growth projections were low compared to the growth of online advertising. In 2007, The New York Times dropped the paywall to its post-1980 archive. Pre-1980 articles in PDF are still behind the paywall, but an abstract of most articles is available for free.
- The Atlantic
- Originally online content was available only to print subscribers. This changed in 2008 under the supervision of James Bennet, editor-in-chief, in an effort to rebrand the magazine into a multi-platform business.
- Johnston Press
- In November 2009, the UK regional publisher of over 300 titles erected paywalls on six local newspapers' websites, including Carrick Gazette and the Whitby Gazette. The model was dropped in March 2010; paid subscriber growth during the 4-month period was reportedly in the low double-digits.
The Wall Street Journal was for a time the last major newspaper in the US to still have its website behind a paywall, until the New York Times reinstituted one on 28 March 2011. The Journal has almost one million paying online readers.
Recent extensions include the idea of a "soft" paywall, one that is relatively porous, with the New York Times version noted as "so porous that it can be considered to be a genuinely freemium model." In such cases the difference between a paywall and a Freemium model disappears.
In the UK, MoneyWeek started using a paywall in 2005. Now 60% of the magazine content stays behind the subscriber paywall for one month. This includes cover stories and in-depth articles. Managing Director Toby Bray says they are keen to emulate the FT.com model which gives access to a certain number of articles per month across the entire site.
- Radio station KPIG placed its audio stream behind a paywall in March 2010; it has remained ever since.
- The Dallas Morning News reported 49,000 digital-only subscribers to its digital offerings one year after implementation. This represents new circulation, since the online offerings are free to current print subscribers who register. 91,000 print subscribers have registered their accounts.
- In the US, the large daily Newsday charged $5 a week for access to its website, from which subscribers to parent company Cablevision's Internet access were exempt (Cablevision holds the cable franchise rights to most of Long Island). By mid-January 2010, three months after charging began, just 35 subscribers had signed up. It temporarily removed its paywall in December 2010, only to reinstate it in January 2011.
- The Financial Times charges readers on a "metered" model, under which readers get access to some articles for free, but must pay for more. They claim to regard the system as a success. From April 2010 the FT dropped its metered free access without registering option and now requires all readers to register before they can view articles — free access is still available after registering on a metered monthly basis. As of June 2012, the Financial Times has 285,000 paying online-only subscribers and is expected to have more online subscribers than print subscribers sometime in 2013. Digital subscriptions at this paper are still growing at an annual rate of about 30%.
- The Times and Sunday Times newspapers started charging to access their websites in June 2010. Users pay £1 for a day's access and £2 for a week's subscription. As of May 2012, the Times now has nearly 120,000 paying digital-only subscribers.
- The New York Times began charging $15 for a monthly subscription to its website beginning on 28 March 2011. Users can read up to 10 articles a month for free, after which they will be prompted to subscribe. As of May 2012, The New York Times now has 472,000 digital-only subscribers and has reported gains in Sunday print circulation.
- In August 2011, The Onion’s website began testing a paywall model using the Press+ service. Non-U.S. visitors who want to read more than about five stories within 30 days must pay $2.95 monthly or $29.95 annually. "We are testing a meter internationally as readers in those markets are already used to paying directly for some (other) content, particularly in the UK where we have many readers," said Onion, Inc. chief technology officer Michael Greer. This new attempt at a paywall comes 6 years after the removal of the ill received Onion Premium paywall which launched in 2004 and was taken down in 2005.
- On 31 May 2012, The Courier-Journal of Louisville, Kentucky placed almost all of its online content behind a paywall, allowing free access to 20 articles a month before prompting readers to subscribe. Exceptions to the paywall are section fronts, obituaries and classified ads. The C-J is one of several papers owned by Gannett that have recently instituted paywalls.
- In May 2012 the online edition of the Norwegian Fædrelandsvennen (fvn.no) implemented a paywall for most of their content. Fædrelandsvennen is one of several newspapers owned by the Schibsted Media Group in Norway. FVN.no is Schibsted's pilot paywall implementation.
- The Globe and Mail relaunched its digital subscription offering on 22 October 2012, providing full access to its online content for C$19.99 a month. Newspaper subscribers could receive a discounted price, and everyone had access to 10 free article views a month.
- In February 2013, Journal Broadcast Group announced it would be using Los Angeles–based company MediaPass to offer exclusive content on its RightWisconsin website. RightWisconsin is the first Journal Broadcast media property to implement a subscription system.
- The salacious United Kingdom tabloid The Sun implemented a paywall on 1 August 2013. Known as Sun Plus, the scheme displays teaser headlines and one paragraph of each story, then demands that subscribers pay £8.67 a month to read the rest; the offer includes content access on mobiles, as well as gimmicks designed to increased the perceived value, such as lotto tickets and video of soccer goals from the English Premier League. The first month's service is discounted to £1. The Sun has announced that the paywall will be abolished, starting 30 November 2015.
- The Toronto Star launched a digital subscription priced at C$9.99 a month on 13 August 2013. Ten articles a month can be viewed freely. Daily residential subscribers have free digital subscriptions.
- The Natal Witness, published in Pietermaritzburg, South Africa, charges for articles labelled as "Premium" content. All other content is freely available.
- Several of Ogden Newspapers' daily newspapers were placed behind a paywall on March 13, 2014. The system displays teaser headlines and the first paragraph of the story. Subscribers can also read an e-edition of the newspapers as well as access the publications via smart phone and tablet apps. Odgen has continued to roll this model out to more of their newspapers throughout 2014.
- The British daily newspaper The Independent launched paywall for non-UK readers at the rate of $3.99 per month.
- The Irish newspaper The Irish Times introduced a metered paywall on 23 February 2015 with prices starting at €12 per month. The paywall model is similar to the one used by The New York Times and is designed to get regular readers to pay for access without blocking the casual audience.
The British papers The Daily Telegraph and The Sunday Telegraph have announced plans to erect paywalls in late 2013, offering readers a one-month trial first. The plan will require readers to pay £1.99 a month for website and smartphone access, or £9.99 a month for full access, but are allowed to read 20 articles a month without paying. As of mid-December 2013, it is unclear when this plan will be implemented; while the papers do promote their subscription plans, content seems to be available unrestricted.
Utilities to circumvent paywalls are available. RefSpoof for Mozilla Firefox spoofs the referrer to Google so that multiple "first click free" links can be performed. BreakthePaywall adds an option to Internet Explorer's context menu which uses various methods (referrer and user-agent spoofing, cookie deletion). There is also a Chrome extension of BreakthePaywall. Simply browsing in private mode will defeat some paywalls, such as The Washington Post's, although commenting, writing letters to editor, etc. will still be blocked.
- Content control software
- Digital restrictions management
- List of public domain resources behind a paywall
- Open access
- Paid content
- Pay what you want
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These indirect readers, unable to get access to articles behind the paywall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
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