Paywalls are something that has been introduced as a result of the Internet age. Media companies started to realize that they were getting squeezed out by all of the information that was readily available to individuals via the Internet. They formed their own websites, but quickly realized that they were not able to make as much revenue from them as they would have liked. Paywalls were introduced as a way of making visitors pay for the material they were going to read on the site, thus turning freeloading surfers into customers and subscribers.
For some of the largest media companies such as the LA Times, the New York Times, and Gannett, paywalls have been largely successful. Consider the fact that Gannett is estimating that it will rake in $100 million from its paywalls in 2012 alone. When the New York Times added a paywall, it actually increased its number of subscribers by nearly half a million.
Seeing this success, some 41 American newspapers adopted the paywall idea for themselves during the third quarter of 2011, with more climbing onto this bandwagon each year.
Some companies (such as Gannett) have seen increases in the amount of revenue they bring in, but decreases in the amount of online traffic they see. There are several online publications owned by Gannett, for example, that have seen decreases in the amount of visitors by a third or more.
There have also been some failures when it comes to paywalls. The Variety magazine company introduced paywalls to its online material and saw a quick loss of interest from subscribers. The publication became so unpopular that it was recently sold off to new owners. Those new owners have announced they will be taking the paywalls down, as they have obviously been a miserable failure for this publication.
Paywalls seem to be something that can only work for brands that already have a lot of brand loyalty attached to them. For everyone else, it is probably best to stay away from the idea of paywalling content, as most websites still need traffic to survive.
Infographic via bestcollegesonline.org
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