Paywall: What is it? Earn money with views, models, calculation example

Here you will learn quickly and simply what a paywall is, how it works and why it is used by many online publishers and media companies. We explain the different types of paywalls, their advantages and disadvantages and show you how this model compares to other monetization strategies such as subscriptions, pay-per-view (PPV) or advertising revenue. You will also find out which KPIs (key performance indicators) are important for measuring the success of a paywall. If you create good content, you can make a good living from it!

What is a paywall?

A paywall is a digital barrier that restricts access to online content and forces users to pay for access. You’ve probably tried to read an article on a news website only to be prompted to subscribe after a few lines. This is exactly what a paywall is. It is used by publishers and media houses to generate revenue while funding high-quality journalism.

How does a paywall work?

• Access restriction: Users only see part of the content and have to pay to read the rest.
• Different models: There are hard, soft and metered paywalls (metered = measured).
• Use on websites: Mainly on news portals, magazines and specialized websites.

Types of paywalls

• Hard paywall: All content is behind a barrier. Only subscribers have access.
• Soft paywall: Some content is free, some only for paying users.
• Metered paywall: Users can read a limited number of articles per month for free before they have to pay.

Why use a paywall?

A paywall helps publishers and media companies to monetize their content without having to rely solely on advertising revenue. For you as a reader, a paywall often means access to high-quality and exclusive content that is not otherwise available. Compared to models such as pay-per-view (PPV) or pay-per-article, a paywall offers the opportunity to generate regular revenue and build long-term customer relationships.

Comparison with other models

• Advertising: Free access for users, but dependent on advertising revenue, which can fluctuate.
• Subscription: Regular income, access to all content, no paywall.
• Pay-per-view (PPV): One-off payment for access to exclusive live events or content, often more expensive per event, but with no long-term commitment.
• Pay-per-article: You pay for individual articles instead of for the entire access.

Important KPIs for paywalls

In order to evaluate the success of a paywall, certain KPIs are decisive:

• Conversion rate: How many users switch from free to paid content?
• Retention rate: How many users stay with a subscription after the first month?
• ARPU (Average Revenue Per User): The average revenue per user.
• Churn rate: The proportion of subscribers who cancel their subscription.
• LTV (Lifetime Value): The value of a customer over the entire period of its use.

Calculation example: Costs for a paywall

Suppose you regularly read articles on a news website:

• Paywall: A monthly subscription costs €10. For regular readers, this is cheaper than individual purchases.
• Pay-per-article: Each article costs €2. If you read five articles a month, you also pay €10.

A subscription is often cheaper for frequent readers. For occasional readers, it can be cheaper to pay for individual articles. The pay-per-view model, on the other hand, offers a flexible payment option for one-off content, such as live events, while paywalls are more suitable for regular readers.

This is a paywall

A paywall is an effective method of monetizing digital content and offers publishers a way to finance independent journalism. It is particularly attractive to users who want to read high-quality and exclusive content on a regular basis, but can be a deterrent if access is too restricted. It is important to monitor the right KPIs to measure and adjust the success and profitability of a paywall strategy.