Newswires, Hootsuite, WordPress, Trello, MailChimp…..flexible paywall? Over the past several years, subscription management and dynamic paywall providers have joined the ranks of must-have digital tools for media companies. Only, these tools aren’t designed to be used by journalists – they’re designed for product and marketing departments to improve conversion rates and drive subscriptions.

More from The Fix: Rethinking the way we write for the paywall age

Major publishers from The Globe and Mail to New York Magazine have chosen to build their own dynamic paywalls in house. But many others are turning to the SaaS solutions available on the market today.

Unlike a typical paywall that allows non-paying readers to access a set number of articles before walling off content for the rest of the month, a dynamic paywall is designed to help publishers monetize content through a number of methods. The methods used can range from audience segmentation to machine learning to depending on the paywall option you choose.

Freedom from the Advertising Model

One of the most ingrained players in the subscription management space, Pelcro, has leaned into the dynamic paywall as a core feature of its offering. Since the company was founded in 2016 by Michael Ghattas, they’ve won over major publishers like Newsweek and L’Actualite.

Pelcro’s offerings range from login and authentication services, CRM solutions and billing to machine-learning driven paywall solutions and recommendation engines.

Andrew Morris, the company’s Director of Client Relations notes that the industry has seen a shift over the past few years from “will this work?” to “how can we make this work?” This has to do with the well documented challenges of news publishers to make money from advertising in the digital space.

Making money from digital advertising has become increasingly more difficult. The latest blow to this revenue strategy for publishers is Google’s recent announcement that it will stop supporting third-party cookies in 2022, which have long been used by publishers to track a user’s activities on their platforms.

This growing obstacle makes the push for paywalls an obvious next step, he said, but what Morris didn’t expect was what publishers did with their newfound freedom from the advertising model.

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“Instead of thinking, ‘what is going to make the advertiser happy?’, publishers are spending a lot of time thinking about ‘what’s going to make our readers happy?’”

“The company is no longer purely focused on pageviews,” he continued. “With a subscription, the economics work better. A subscriber is worth a certain number of pageviews. When publishers get away from pageviews, they do very interesting things.”

Publishers are less dependent on bringing readers to their websites, he explained, and have redirected their energy on reaching the readers where they already are (with newsletters, podcasts or social media, for example).

As paywalls become an increasingly popular choice, the space is getting more crowded and its players are expanding into other areas.

Founded in 2019 and run by a team of former publishing executives, the French tech startup Poool, has expanded on the concept of the paywall with a wider range of wall-based offerings.

More from The Fix: “You don’t want to put things that are commodity content behind a paywall”: How publishers are growing subscribers via free content

Their paywall offering allows publishers to AB test different compensation offerings across digital platforms and segment audiences according to their behaviour. Poool also allows their clients, which include Elle and The Africa Report, to deploy different types of walls on their websites, including paywalls, newsletter walls, registration walls and cookie walls.

In addition to subscriptions, Poool aims to help publishers build every stage of their users’ monetization journey. Since signing with Poool in 2019, ELLE has boosted subscriptions by 250% by AB testing seasonal offers.

While the paywall option is a core product for Poool, Wyss doesn’t believe, however, that paywalls are necessarily the future of the industry and believes that Poool and companies like it can help publishers of the future use a wide range of methods to monetize users.

“I don’t necessarily think paywalls are the future of the [publishing] industry. I think the future of the industry is making money off your content. We can see now that the business model for digital media is burning, it doesn’t work anymore. Revenue from advertising is shrinking, people are more volatile, and they don’t want to give their cookie consent,” Wyss continued.

As one market begins to emerge, so too do the competitors. LaterPay is a New York City-based micropayments startup that calls itself the “antithesis to the paywall option.”

“Right now, everyone forces you to pay money in advance or register in advance before you can get the content,” founder and CEO Cosmin-Gabriel Ene explained.

He agreed that subscriptions are here to stay, but adds that it’s not right for every user.

“I think the subscription model, to a certain extent, is absolutely here to stay and makes a lot of sense. But, there’s a huge caveat there. Subscriptions are not about the user. They are about convenience for some users who are consuming a lot of content. For these users, a flat-rate model makes a lot of sense. But, most users just hop across websites and you can’t offer subscriptions to all of them,” he explained.

For the vast majority of readers who aren’t committed enough to subscribe, LaterPay gives them the opportunity to contribute one-off payments for content that they particularly enjoy.

“I think that the Publishers now compete with music and entertainment brands for users’ subscription dollars, which is a big problem. That means that for me to win, you have to lose,” he warned.

More from The Fix: Solving the never-subscriber problem

Are news publishers becoming dependent on yet another platform?

The emergence of a market to help publishers monetize their audiences begs the question: Is the publishing industry setting itself up to once again outsource revenue strategies to external stakeholders (i.e., advertising, social media, etc.)?

“There is a risk that relationships with readers will be handled by platforms instead of by the media itself. The main challenge for media now is to find a way to build relationships with their readers – direct relationships,” Wyss of Poool explained.

She went on to describe how platforms like Poool aim to give publishers more power over those relationships, as opposed to taking it away.

Morris of Pelcro conceded that it’s never a good idea for publishers to blindly enter into relationships with any vendors – including subscription management firms. However, the modern business landscape demands that businesses leverage partnerships in order to survive.

“Every single business out there right now relies on one or more vendors for one or more parts of their core business, he explained.

Between WordPress, email marketing platforms, social media, and major technology companies, publishers are more financially dependent than ever on external companies with different goals (and we didn’t even list traditional advertising!).

Morris acknowledges the risk, and believes that the key for publishers is to develop deep partnerships with their vendors to ensure that the goals of both parties are being met.

“What makes sense and works great is when you have a good team or an individual depending on the size of the company, that’s able to communicate well with the vendor to make sure that you’re not blindly relying on them.”

Photo by Scott Webb on Unsplash

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