media update’s Aisling McCarthy explores the use of paywalls, and what it means for the future of the media industry.

What is a paywall?

A paywall is a feature of a website that requires users to pay in order to access the site’s content. Paywalls are increasingly being used to limit access to journalistic articles so only those who subscribe to the site, or pay for access, can read the article.

The rise of paywalls represents a shift in Internet content, which has traditionally been free for users and paid for by advertising. As more and more print publications go online, the paywall has risen in popularity, providing news sites with a revenue flow.

There are two categories of paywalls: hard and soft. Hard paywalls are set up with rigorous restrictions that prevent users from gaining any access to the site. Soft paywalls allow limited viewing of content free of charge.

Frédéric Filloux, writing for The Guardian, suggests that there is a third category, which involves a metered system where users are allowed to view a certain number of article free of charge during a given time period. To view more articles, the user would have to become a paid subscriber.

The Financial Times has implemented this system, allowing users to view 10 free stories every month before hitting the paywall. After that, they are asked to pay between R80 and R120 per month, depending on the package. Filloux describes it as “a high price for really premium content.”

Why are paywalls being implemented?

In an article for Nieman Labs, Nushin Rashidian says that the rise of ad blockers has hit the revenues of publishers, which rely on adverts as a major source of income. As a result, publishers need to identify new income sources going forward.

“In 2017 alone: The Guardian established a nonprofit in the United States, The Atlantic launched a paid membership programme, The New York Times is aggressively courting digital subscribers, and halved the number of articles that can be read for free,” Rashidian explains.

Max Willens explains in an article on DigiDay that numerous publications have to make changes to their strategies as the industry changes. For example, financial publication TheStreet will be moving towards more consumer-funding after its forays into both video and branded content failed.

“TheStreet’s hunt for consumer revenue comes at a moment when newsroom morale is at its nadir after years of layoffs and a perceived lack of clear editorial direction.”

Paywalls in South Africa

In February, Times Media Group set up a paywall in the form of digital subscription packages. The packages allow readers to access premium, exclusive content from Business Day, Financial Mail, Sunday Times Business Times, and Rand Daily Mail.

In an interview with media update, Times Media’s head of digital content, Lisa Macleod, said that the decision to implement the paywall was as a direct result of change within the industry.

“It’s a crowded market in media in South Africa. We are all under pressure from Facebook and Google, which are taking the lion’s share of digital spend. CPMs (cost per thousand impressions) are being driven lower and the advertising community have embraced the low-as-possible programmatic buy,”

Other media houses who have implemented the paywall system are Mail & Guardian, Netwerk24, and Tiso Blackstar Group.

Although there is much debate about whether or not paywalls will be successful, it is clear that the media industry, both in South Africa and abroad, is set to change.

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Times Media Group says that many of their titles won’t work as paywall sites, but that BusinessLIVE was specifically created to have a premium, paywalled element to it. Read more in our article, The thinking behind Times Media’s BusinessLIVE’s paid subscription service