The Internet has grown to incredible complexity in a remarkably short time. Unlike normal laws, regulations on the Internet are constantly playing catch-up to its growth. One group that is struggling is the traditional newspaper industry. As online newspapers become mainstream in modern times, many newspaper companies have moved their news content to an online format.
The Economist is a newspaper company founded in 1843. It originally focused on the economic and political fields (which are also the origin of its name), and later gradually expanded to current affairs, including opinion columns, special reports, cartoons, and other typical newspaper columns. In 1996, Economist.com was born. News on the internet used to be free and accessible, but as traditional newspapers declined, sites such as The Economist took up online subscriptions to compensate. In this context, the Paywall was born (Elmer E. Rasmuson, 2022).
Paywalls are a system that prevents Internet users from accessing certain Web content without a paid subscription (What is a Paywall, 2022). They can be roughly divided into the following categories:
- Hard paywalls—no access to any content without subscriptions.
- Soft paywalls—some free content.
- Metered paywalls—restricts the number of free articles.
- Freemium paywalls—some free content, charges for premium content. (The different types of paywalls (and how publishers use them, 2021)
In the beginning, online media used ad-supported article formats to make money. The Economist also used soft paywalls, which allowed registered users to access articles published within twelve months for free. Since 2003, however, online advertising has dropped steeply. In the third quarter of 2009, US newspapers earned 17% less money through online advertising. At the same time, some publishers such as Financial Times and Wall Street Journal got promising results from their new paywall policies. Encouraged, The Economist decided to adopt a new paywall system that “will provide free online access only to content from the magazine which is under 90 days old. …to recoup revenue lost from dwindling print circulations and a large dip in advertising.” (Oliver Luft, 2009)
The effects of this new paywall policy are not evident, and its revenues are not publicly available, but given that this policy has been in place for a long time, the results are expected to be positive. Paywalls, however, still face a very contradictory problem: the audience. In 2010, an Economist article pointed out that people are likely to turn to similar free platforms when faced with paywalls (“The Year of The Paywall”, 2010). In 2015, another article from The Economist mentioned that most press companies can’t make a profit on paywalls alone (“Up Against the Wall”, 2015). This is because for most of the news articles, people only tend to read the free ones. Moreover, people’s patience is gradually decreasing. According to the article, the typical US PC user spends only 228 seconds per visit on a news site. This has led paywall systems to strike another blow to the already low interest of the general public.
Many news companies decided to change their policies again. One of the standouts was The New York Times, which introduced a new metered paywall model in 2011, which allowed readers to view 20 articles every month for free. In 2012, NY Times tightened it to 10 articles. This article led to a huge success, increasing its digital-only subscribers by 13% (Merja Myllylahti, 2013). In 2012, The Economist introduced a similar soft paywall in response: 5 articles free, and if they register, another 5 articles can be viewed.
“Over time, we’ve been in this process where as we’ve matured as a digital business, and maybe also the market’s matured, and people’s expectations of paid content have developed, we’ve been sort of tightening up what people can read for free,” explained Davison, the Economist’s Head of Insight and Data Science (Esther Kezia Thorpe, 2019). By 2018, that number was down to one, and the reward for signing up was three articles. Paywall’s core conflict has always been its advertisement traffic versus subscription profits. Under a more restrictive paywall policy, although users are more likely to subscribe, views on embedded ads would decrease due to fewer anonymous/non-subscribing users. It also limited potential audiences. Davison mentioned, “Are we limiting our brand awareness to new people who aren’t willing to pay, no longer discover our content?”
Compared to other newspapers, The Economist is known for using more economic terms. Its authors often remain anonymous to emphasize the content/opinion of the article rather than the authorship, in the hope that readers will view the article more objectively. This results in the newspaper filtering its audience to those who actually enjoy it. This is the basis of The Economist’s stickiness of its users.
As Lucinda Southern writes, “Its quality is its advantage, and its large existing subscriber base is the highly visible evidence of its value.” The whole paywall policy is executed with this analysis in mind.
No one could predict the effects of a paywall, but the prospects were promising. The Economist announced that subscriptions increased dramatically at the beginning of the policy’s implementation. Although many people were previously free users, when they were forced to make a choice, they found that those free articles were important to them.
To this day, most Internet companies use either soft paywalls or metered paywalls. In an interview with Arvid Tchivzhel, MarkusSchöberl summarized the offer strategy used by digital press company. There are usually 3 types of offer:
1 Digital subscription
2 Print subscription
3 Digital + Print subscription
This perfectly corresponds to the paywall policy of The Economist today (See Figure 2).
Despite its 20 years history, paywalls are still a very delicate issue. As Davison said, the new generation of users may not be as sticky as The old ones, so it is still a challenge for The Economist to ensure its user base. (Markus Schöberl, 2022)
In addition to economic issues, paywalls have a technical problem. On Reddit, a person said they could view articles for free with a specific Chrome Extension. So he was confused and asked, “Why is it so easy to circumvent the economist’s paywall?” (Reddit.com, 2021)
This didn’t even require any computer skills. I know nothing about computers but have used this method to skip quite a few paywalls (and html inspect). At least at the time, paywalls were by no means a mature technology.
Now, without a subscription, people can only view a part of the article, and the second half is not displayed in the html. Of course, there are still many ways to get around paywall, and this is an area where newspaper media still needs to improve.
It can be argued that paywalls restrict media’s potential users, yet they are indispensable for online media companies. They acted as a means of regulation that grew with the Internet, but at its basis, they are an exploration of the core competencies of a newspaper company. It is a typical example of Internet regulation, which symbolizes the gradual maturation of the technical and economic aspects of the operation behind the Internet.
*This article does not have any intention to encourage the use of informal means to circumvent paywalls, but only to explore how these paywalls, which could be easily bypassed, have been improved by news companies.
Citation (CMS Style)
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