How do readers pay?

But even in the most developed markets, where users are accustomed to paying to watch movies, listen to music, etc. online, not all news organizations have been successful in setting up paywalls. Which model to adopt depends on the specifics of each newsroom.

In a rapidly changing digital media landscape, news organizations are faced with the challenge of balancing reaching a wide audience with generating sustainable revenue. The “Reader Revenue Model Success Stories” report published by WAN-IFRA earlier this year highlighted the importance of finding a business model that plays to each organization’s strengths.

Paywalls reduce advertising revenue

According to a WAN-IFRA report, reader revenue should account for about 40% of a news organization’s revenue. That is the ideal level, alongside revenue from advertising, event organization, sponsorship, service business, etc.

But after the height of the hard-paywall subscription era, many news organizations realized that it was no longer effective to put paywalls on previously free content. It cut into advertising revenue and failed to attract enough new subscribers.

Therefore, WAN-IFRA has suggested a freemium model, combining free content and premium content (requiring a subscription to read) to solve the above challenge. This is considered the optimal approach to balance advertising and subscription revenue for many compelling reasons.

First, the freemium approach cleverly connects the need for broad access to content with the need to generate sustainable revenue. Providing a significant portion of content for free allows news publishers to attract high traffic, which is essential for advertising revenue. At the same time, premium content acts as a clear value proposition, encouraging readers to subscribe for exclusive or in-depth material. This strategy serves both casual and specialized readers, optimizing revenue from both advertising and subscriptions.

Second, the freemium model significantly enhances user experience and engagement, which is important for building loyalty in the digital age. Providing free access to a piece of content attracts a wider audience and fosters regular reading habits, potentially leading to higher subscription conversion rates. This approach also maintains the visibility of the news organization on search engines and social media.

Third, the freemium model offers a “try before you buy” experience that aligns with modern consumer expectations and demonstrates the quality of the publication to encourage subscription purchases. Its flexibility allows news organizations to adjust their subscription structure, ensuring effectiveness over time based on data about user behavior and preferences.

Research shows that the freemium model has been the most popular globally over the past few years. This model is easier for readers to understand because the proposition is clear: Some content is free, other content is paid.

Freemium may be the right model

Interestingly, it is the tabloids, which used to live on digital views and advertising, that are succeeding with a flexible freemium strategy.

Earlier this year, the Daily Mail shifted its strategy to a “freemium” model, targeting readers in the UK specifically to boost revenue. Some articles on MailOnline (around 10-15 a day) are behind a paywall, but the vast majority of content (nearly 1,500 stories a day) remains free. The move marks a significant shift, as the platform has previously been adamant about not charging readers.

Swiss German newspaper Blick launched its freemium paywall in June 2024. In its first eight months, Blick+ attracted more than 16,000 subscribers, nearly 80% of whom had previously signed up through the free subscription wall. The subscription wall strategy started by limiting exposure to just one article per day to a small group of users (2% of the total audience) to see how they reacted. Over time, this approach was expanded, eventually extending to 10–12 articles per day for Blick’s entire audience (around 1.2 million people). Articles were carefully selected because they were deemed valuable enough that people would consider paying for a subscription. The current Blick+ model limits around 10% of the site’s content (around 200 articles per month) to subscribers.

German tabloid Bild launched Bildplus in June 2013, reaching 700,000 digital subscribers by the end of 2023 – making it the largest subscription newspaper in the German-language news market and one of the most popular paywalled news sites in the world . Around 12-15% of the news brand's total online content is paywalled, and the goal is for around 30% of the articles at the top of the homepage to be subscriber-only.

The above examples are expected to inspire news organizations in many countries to implement the freemium model instead of other models that are considered less flexible.

Of course, thanks to the development of technology, including AI, news organizations have smarter charging strategies by analyzing user data. The West Australian has seen a surge in paid subscriptions when it used the robot Sophi to label premium articles instead of relying on editors' subjectivity as before, because AI understands reader behavior and preferences better than veteran editors.

While reader revenue is clearly the obvious direction to go, choosing the right model is crucial. Adrian Gottwald, head of reader revenue at Blick Group, explained that they chose a freemium approach because they wanted to give subscribers access to a wide range of content without significantly cutting into the site’s advertising revenue. Daniel Mussinghoff, senior director of Bildplus, shares that view, saying that Bild still has “huge potential” and has not yet reached its growth limit.

Is that enough for other news agencies to consider learning?

Source: https://hanoimoi.vn/lam-the-nao-de-nguoi-doc-tra-phi-706273.html