Paywalls have different terms and conditions, you can come across several articles online before a paywall will pop up and ask you to subscribe to read more, and sometimes you cannot read any articles without a subscription (Nevradakis, 2013) all depending on the newspaper itself.
In 1996 The Wall Street Journal was the first in the U.S to invoke paywalls (Lee, 2013) and even with their early implementation of said strategy, they succeeded to retain their print readership whilst still establishing a digital audience (ibid).
Many newspapers suffered a loss in their revenue when readers started to get access to news online and this business model was one way to compete with that market. In 2009 The New York Times had suffered a loss of ‘£72 million in a single year' (Edge, 2014). However, after they implemented paywalls they managed to reduce their loss to £6 million and are getting more money from their audience than their advertisers (ibid).
Financial Times implemented this strategy in 2007, where you could access a few articles for free before a paywall were to appear, and ever since then the digitised version has grown and is now dominating its printed version 'with about 60 percent of its 629,00 subscribers’(Lee, 2013).
It is quite evident that many newspapers have had a great success with implementing a paywall, and I would think that having a few free articles might be a more successful strategy, as this can provide an incentive to the readers to pay to read more (providing that the same information isn't available for free). However, another option publisher's use to generate profit is via advertising (Hall, 2013). For newspapers like The Daily Mail, has '80 million unique browsers per month' (Durrani, 2012) has proven to be a successful business model for them.
Moreover, these newspapers are competing with Google and Facebook, whom offer a lower price to advertisers (Lee, 2013) which leads me to think that it is only a matter of time before these newspapers will have a highly competing market with other social medias, and would therefore, have to change their business model in order to increase their profit (or in many cases decrease their financial losses). I also question the quality of the content of those newspapers; Darcey (cited in Ponsford, 2014) described the Daily Mail 'a site based on copying and rewriting content from social media sites and other new outlets'. Many newspapers stress the fact that their content is worth the money you’re paying to read. However, as already pointed out, the Daily Mail is quite successful and they obviously have a readership that knows their house-style and have accepted it. Nevertheless, it could be suggested that individuals today don't care about the quality of the paper, they just want to access the information as cheap as they can.
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Bibliography:
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Lee, E (2012). The New York Times Paywall Is Working Better Than Anyone Had Guessed. Bloomberg Businessweek [Online]. Available at: http://go.bloomberg.com/tech-blog/2012-12-20-the-new-york-times-paywall-is-working-better-than-anyone-had-guessed/ (Accessed: 17 October 2014).
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News UK chief Mike Darcey: 'Don't confuse Mail Online with a business based on professional journalism'
Preston, P (2010). The Mail’s miracle: or how to get paid without a paywall. The Guardian [Online]. Available at: http://www.theguardian.com/media/2010/jul/18/peter-preston-mail-online-paywall (Accessed 16 October 2014).
Preston, P, (2013). The Financial Times paywall is in the pink: everyone else is still in the red. The Guardian [Online]. Available at: http://www.theguardian.com/media/2014/aug/03/financial-times-paywall-online-advertisings-subscriptions (Accessed: 16 October 2014)
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