Erecting Paywall for Restricted Access to Website Content: Important for Revenue– Hardly Winning Strategy for Growth…

Paywall is a system that prevents Internet users from accessing webpage content (most notably news content and scholarly publications) without a paid subscription… It’s an arrangement whereby access is restricted to users who have paid to subscribe to the site… it’s similar to a firewall in that it prevents users from accessing certain webpage content without permission…

Hitting paywall is one of those things that are immediately followed by a groan, a tear, a stiff drink or less commonly, the temptation to physically harm your computer… Everyone has experienced it; some sites implement hard paywall while others deploy soft paywall: Hard paywall content restrictions are very stringent allowing either no access or minimal access to free content. A soft paywall, on the other hand, provides access to free content as means for encouraging users to subscribe to the website services…

According to Steve Outing; the word paywall as applied to websites sucks; it’s a negative word. If a consumer hears that their favorite site is putting up a paywall, the response is highly likely to be: Avoid! Paywall systems are being developed with increased regularity for content-focused websites to provide means for generating subscription revenue. Some websites have metered paywall that allows visitors to view limited number of pages for free, then once this allotment of page views has been exceeded, a paywall is erected with the request to subscribe in order to have further access to the website…

According to some experts; many website that have paywall are really just using a donation model, since it’s so easy to avoid paying and still have access, and that’s not far removed from membership models. Where a growing numbers of websites are getting online users to pay for access to their content as members or non-members, for example; become a member and access everything that the site has to offer or stay non-member and access some limited number of articles per week/month/year…

According to experts, we should eliminate the word paywall, and instead promote the memberships concept. The reality is that most active websites have a large group of loyal free users (i.e., non-members) and a smaller group of paying users (i.e., members), and their objective should be to convert the non-members to members and not alienate them by erecting a paywall… 

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In the article How Paywall Works by Cristen Conger writes: The debate over free versus paid online content rages on. Before delving into the great paywall debate, it helps to understand what exactly those virtual gates are. While we might like to envision these subscription portals as being heavily guarded by Internet gnomes that deflect non-paying IP addresses by brandishing tiny swords; paywall sadly aren’t all that magical. Paywall are website coding systems that allow only authenticated users to pass through into the land of free access.

For idea of how it works, consider how a couple of college students figured out how to hop over a magazine’s paywall by fiddling with its website coding, which, the students noted, is publicly accessible, so it’s not like they were breaking in through some sort of backdoor. The paywall consisted of an encryption file and an authentication file that prompts the user to log-in, and then verify whether the user has paid for access. There are different paywall systems, including; metered, freemium (which allow some, but not all, articles for free), and full restriction… and each of these involves different types of encryption, authentication and data tracking…

However, there are some very clever people who can quickly figure out how to hop right over that golden gate… Just like the college  students who found a crack in the paywall, there are folks that can quickly tinker with the website’s JavaScript, CSS and URLs and passed right on through to the protected content without having to pay a penny. Also, Internet browser add-ons have even been developed to automatically crack paywall… In fact, some websites intentionally make themselves porous, leaving side doors open via Google, Facebook and Twitter…

In the article Don’t Build a Paywall, Create a Velvet Rope Instead by Mathew Ingram writes: Is there a way for a site to generate revenue without a paywall? Yes: They could try to think about developing a relationship with readers that is based on mutual exchange of benefits, and let the monetization flow from that instead of erecting a paywall…

Think of the relationship with readers as being about more than money, and then let monetization flow out of that relationship, rather than the reverse. So instead of just hitting a paywall after a certain number of stories, readers who contributed comments or moderated the comments of others– or provided other forms of useful data or labor– might get a benefit that others wouldn’t, for example; access to certain content, invitation to a real-world event… In fact, it may turn out that readers might actually volunteer to pay, because it’s no longer seen as a duty but something that’s useful to them.

According to Charlie Beckett; this relationship model is focused on encouraging readers to see themselves as members of an exclusive club that has certain perks or rewards, so it’s a lot more like a ‘velvet rope’ than a paywall. The outcome is arguably the same as a paywall, but it starts with the benefits instead of starting with the turnstile and a request for money. But too many sites seem to be ignoring the velvet-rope option and simply throwing up paywall out of desperation…

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In the article How Paywall is Evolving by Felix Salmon writes: So, what is the future of paywall? According to MediaPass; it will be a mix of free and paywall content, although that mix will differ from site-to-site… crucially, one of the biggest lessons we’ve learned is that it’s a mistake– at least from a purely revenue perspective-– to treat all visitors equally. Some readers have a much greater propensity to pay than others, while also allowing the vast majority of visitors– the ones who will never pay you anything– to still consume your content and view the associated ads.  For instance, it’s often easier to persuade people to subscribe to sports content than to entertainment content, even as it’s easier to sell ads against entertainment content than against sports content.

So it does make sense to keep entertainment free, and put some kind of paywall around sports… And certainly it seems to be a good idea to offer a range of subscription lengths, priced so that there’s a strong incentive for the longer-dated annual subscription, even if that means a substantially lower rate on a per-month basis. It’s not all that hard to tell who’s likely to subscribe, and who isn’t. For example, print subscribers are much more likely to be willing to pay for a digital subscription than those that don’t…

In general, the trick is to get as many subscribers as you can– because once a person subscribes, they generally turn out to be surprisingly loyal and price-inelastic… And then, for the 90% of readers who don’t  subscribe, it’s a good idea to find content for them, too. The paywall shouldn’t just be a ‘pay here or get nothing’ option: the ‘no thanks’ button should take visitors to valuable free content… What’s impossible to calculate, of course, is the long-term opportunity cost of driving away people who want to read your content but aren’t willing to pay…

According to MediaPass; in most cases the act of putting up paywall is essentially harvesting revenue from loyal long-term audience– people who have read your content as a habit that they don’t want to give up. That’s fine, as short-term means of maximizing revenues, but its dangerous strategy long-term for getting new loyal readers…

Paywall is controversial with partisans arguing over effectiveness of paywall in generating revenue, and the effect on media in general. Critics of paywall include; many business people and academics, such as; Jay Rosen, media professor, Howard Owens, journalist, Matthew Ingram, media analyst,… Those who see potential in paywall include; Warren Buffett, investor, Gordon Crovitz, publisher, Rupert Murdoch, media mogul,…

Some have changed their opinions of paywall: Felix Salmon of Reuters was initially outspoken skeptic of paywall, but recently expressed the opinion that they could be effective. Clay Shirky, media theorist, was a skeptic of paywall but wrote; news media should turn to their most loyal readers for income, via a digital subscription services. In the paywall debate there are those who see paywall as ‘sandbag strategy’; a strategy which may help increase revenue in the short-term, but not a strategy that will foster future growth…

However, a non-debatable strategy is to think ‘mobile’ and fast. According to The ComScore 2013 Marketplace Outlook Report; one of every three minutes of digital time is now spent with smart phone, tablet– or both, at once. Mobile platforms require entirely new types of interactive content and transaction services to satisfy consumers, who want to get news quickly, locate information rapidly and share; words, pictures, videos… on demand.

According to Jacqui Cheng writes: The latest data from Nielsen has found from its 52-country survey that there are indeed opportunities to make money on content, but users can be choosy about what kinds of things they’re willing to pay. The survey, included more than 27,000 customers globally, found that consumers are (naturally) more inclined to keep already free things free.

Still, things that people pay for offline, such as; movies, music, games… were the same things that people were most willing to pay for (or consider paying for) online. This isn’t a huge surprise since; music, movies, games… are already flourishing mediums on the Internet. What didn’t fare so well were; blogs, user-generated video, talk radio, podcasts, social communities… which were all on the bottom of the list… It’s worth noting, too, that different demographics within the population are more open to paying for content than others.

Nielsen noted in its report that younger consumers are more willing to pay for most types of content, which is surprising given the popular perception that young people are more likely to pirate content; many of these so-called ‘digital natives’ know how to end-run pay sites…

Also, as it turns out, it’s the older users who are more resistant to paying for content online… So as current generations of users age, it’s more likely that they will be more willing to accept the paywall and pay for content that they deem valuable…