What is a paywall? Basically, it is a membership site. It is a name most commonly used for newspaper websites. With a paywall, that just means that you have installed a system on your website where people must pay to view the contents of your site. Really it is no different than any kind of website where you must become a member in order to participate on or read the information on a website. I don’t know why the newspapers must use a special name, i.e. “a paywall,” but they do.
Over the years, I have thought seriously about using a paywall on one of my sites. That site where I have been considering that is my most popular site by far. In the end, I decided to abort my thoughts of setting up a paywall, because I thought that it might ruin the popularity of my site, and even damage all of my online efforts.
I am very glad that I aborted my thoughts of doing the paywall.
However, that does not mean that I am against paywalls or membership sites! Not at all. In fact, this very site (WaysToMakeALiving.com) will soon have a section that will be behind a paywall. More on that down the road. But, what I am against is putting up a membership site as your first site, or putting your most popular site behind a paywall. Why? Because that is the site where you make your name. That is the site where people get to know who you are and what you are all about. Without that site, people don’t know the quality of your work. If your very first site is behind a paywall, I predict that you will not do very well, because people will have nothing to judge you by, and you are asking them to pay when they have nothing to go on in the way of knowing whether the information you can provide is worth paying for. They also don’t know your writing style, how well you write, etc.
Over the weekend, a friend sent me a link to an article about paywalls, and why most newspapers who go the paywall route are failing. While the whole subject of paywalls has been off my mind for a while now, this article was a good one and gave me a number of thoughts on the topic.
One of the things discussed pretty thoroughly in the article was on the top of using a threshold system of charging people. What does this mean? Well, it means that they set a number of articles per month that you are allowed to read for free. Maybe they say you can read 3 articles each calendar month without paying, or maybe it is 10 or 25 articles, it’s just up to the publisher to decide that. As long as you stay below the threshold of articles, you will never have to pay for the site. But, if the threshold is 10 articles per month, when you try to read your 11th article, you might get a sample of the article and a request to join the site and pay a monthly charge. This is becoming very, very common among newspapers. Most of the big papers are doing this now, people like the New York Times and the Financial Times, and many others too.
According to this article, the papers who have tried using paywalls have lost as much as 95% of their readership! Can you imagine? So, 5%, and often much less than 5% are actually paying for access to the paper. Do you know what that means? It means that revenue generated by the website usually went down significantly. You may be wondering how it went down since they were giving it for free previously. Well, any good site that is commercial is also placing advertisements on their site. In the past, pre-paywall, they had a certain number of people who were reading the site, and thus exposed to the advertising. Suddenly, when they put up the paywall, 95% or more of their readers were gone, and their advertising revenue took a dive. Do you think that membership payment from only 5% or less of the previous audience can pay what they were earning for the advertising on the site? No way. It won’t even come close, to be honest.
So, if you are interested in Membership sites, I would encourage you to go read the article that my friend sent me. It’s quite enlightening and interesting to learn more about how the major newspapers are doing with this. Additionally, if you think you want to do a Membership site to earn a bit of money, I have an e-book all about setting up a Membership Site, check it out here.