Last November, our (smaller) study gave us the impression that hard paywalls achieved the highest conversion rates, and that metered paywalls tended to achieve better rates than freemium models. In the Press Gazette data, metered paywalls are the most common (17 out of 30 cases), meaning it’s not surprising that both the lowest and one of the highest placed publishers employ metered paywalls (Nikkei and The Economist).

Moreover, Press Gazette’s list only includes 2 freemium paywalls, making statistical statements impossible. Nevertheless, we can read from the graph below that paywall model could well be a systematic cause of exploitation – hard paywalls achieve the highest values and metered paywalls achieve higher values on average than freemium models or voluntary pay.

Note that pv digest’s study doesn’t consider the dynamic paywall category in its analysis because of significant categorization problems.

Benchmarking 2.0 – how well do paid content providers convert their reach into subscribers?

Since the data from Press Gazette also indicates a correlation between paywall model and paywall success, we’ve taken a look at the significantly larger volume of digital subscription media included in FIPP’s Global Digital Subscription Snapshot (henceforth named GDSS).

This snapshot is the most comprehensive international listing of paid content offerings known to us, sharing information on the current number of active digital subscription for respective publishers. The collection included the most widely recognized offerings, from The New York Times to Bild and Le Monde, as well as a large number of medium-sized publishers and a few smaller media. This data is therefore not representative of the paid content industry, especially since the reported digital subscriptions are mostly based on publishers’ data, which do not meet uniform standards and are (for the most part) not independently verified. However, FIPP’s data collection is the most comprehensive picture of the reader revenue digital press market available.

For the following analysis, we enriched this data collection with our own data, gathered through systematically visiting the 142 media websites in the snapshot, noting the following:

• Whether a registration wall was also employed
• After clicking on the paywall, are we presented with a single or multiple subscription offers?
• Amongst them, which subscription offer involves the least commitment? – Is there a trial offer? If so, for how long, and what is the price of this trial?
• Does the paywall behave differently on mobile vs desktop?
• How many monthly visits does the offer reach? (current estimate by Similarweb)
• The paywall model (Freemium, hard, metered or voluntary)

On this final point, in order to assign a paywall model, we followed the following logic:

Freemium: parallel offering where content is divided into free and premium, i.e. content that is only available to paying subscribers. Items in the ‘premium’ category are often identified with a symbol.

Metered: no labelling on premium content but readers are given a quota of articles to read for free before being blocked. With this logic, publishers asking for account creation through a registration wall prior to the paywall have been included in this category

Hard: no content is available for free

In the case of 5 publishers, we classified the paywall as voluntary ( The Guardian, El Diario, Il Post, Der Standard & Daily Maverick). This was based on market knowledge and archive information from pv digest. As we’ve shown in previous reports, some of these examples increasingly blur the line to paid. Accordingly, this category should be treated with caution.

We were unable to determine the paywall model employed in 12 cases as no restrictions to content were identifiable. This could be because these publishers sell digital subscriptions only for their e-paper, or perhaps that they don’t make their offering available in Europe (usually because of European data protection rules).

In terms of geography of these publishers, it’s worth noting that the 142 publishers in the GDSS cover 39 countries. The country with the most media included is the USA (34 publishers), followed by Germany (16) – disclaimer: some data was contributed from the pv digest archive, which could play a role here. 3 GDSS paid content offerings are from Austria and only the NZZ is taken into account from Switzerland.

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Comparison of the ‘best performing paid content providers’ in subscriptions /1,000 visits

Out of the 142 paid content offerings, we were able to determine basic data for our exploitation index for 133 publishers – i.e. we had both information on the quantity of digital subscribers and an estimate of the reach from Similarweb. Our index is then calculated as subscriptions per 1,000 monthly visits.

This resulted in 5 outlier values, which we exclude for the following analysis because they seem implausibly high. The reason for this could either be because of an incorrect number of digital subscriptions in the GDSS or an estimation error from Similarweb. The remaining values are plausibly distributed over a still very large spectrum of 98 digital subscriptions per 1,000 monthly visits to 0.1 subscriptions…

In terms of the paywall category, there are more or less as many freemium paywalls as metered paywalls in the sample. For these two models in particular, our analysis thus significantly broadens the database for answering the question about the model with the better exploitation performance.

Looking at the averages, the results are clear. The 54 freemium paywalls have an average of 7.6 subscriptions per 1,000 monthly visits. By contrast, the 45 publishers with a metered paywall achieve 23 subscriptions per 1,000 visits.

As shown by the graph below, which includes all 116 publishers with an identifiable paywall model, these differences aren’t based solely on the respective extreme values. In the large number of paid content providers with exploitable values below 20 digital subscriptions per 1,000 visits, the values for freemium paywalls are noticeable lower than those for metered paywalls.

Whilst the high performance of the hard paywalls is a banal finding (websites with hard paywalls are not very attractive for non-payers – the visits, to which we relate the number of digital subscribers here, are correspondingly low) and the low values for the only five models classified as voluntary are also not really surprising – the diagnosis remains clear even after considering this relatively large number of media spread across several countries and regions.

Metered models perform significantly better than freemium paywalls, supporting our findings in the first study.

However, it is still unclear whether this systematic difference is based on the actual superiority of metered over freemium. One factor that could be considered as an alternative explanation is the maturity of the publisher in their paywall model – more mature paywalls and offers tend to have gained more subscribers than younger ones. Since the freemium model only gained in popularity after the metered paywall, it could be that the superiority of metering is only an apparent one, because they are on average the older models. Further analysis is needed here that takes into account the ‘age’ of the paywalls. Our hypothesis, however, would be that adjusting for age wouldn’t eliminate the differences in performance between metered and freemium.

Another explanation is regional differences. Whilst freemium models dominate in Europe, metered models are the most popular choice for publishers elsewhere in the world. While we identified only 2 of 16 German paid content offerings being metered, all 5 paywalls in Brazil were metered. Unfortunately, our data isn’t comprehensive enough for a sound analysis of this regional factor.

Only in the US do we see enough paywalls of both types to perform a comparative analysis based on region.

Of the 34 US offerings, 17 have a metered paywall and 7 freemium. These metered paywalls from the US come to an exploitation index of 21.8. For the freemium models, the rate is 16.7. Our trend statement therefore also passes this detailed examination.

Having started his career as Head of Subscriber Marketing of Financial Times Deutschland, Markus has since worked at Axel Springer's magazines, as CEO of a subscription marketing firm and with Axel Springer Vertriebsservice before founding his own business in 2013, pv digest, a paid for monthly information service on the reader revenue business in German.

If two publishers have the same number of digital subscribers, it’s far from clear that both titles can talk about comparable success in digital sales. 

For example, if Publisher A has 13,000 digital subscriptions and Publisher B does too, then Publisher A could still be more successful than Publisher B – that is, if it’s positioned within a smaller market. Because, if we add in their print subscribers – 90,000 at Publisher A and 150,000 for Publisher B – it suggests that, relative to the potential market in question, Publisher A’s 13,000 digital subscriptions represent a greater success than this same number of digital subscribers to Publisher B. 

You could argue that the number of print subscriptions doesn’t have much to do with the amount of online subscribers. But I’d argue against that. After all, publishers have worked for decades (if not centuries!) to maximize their readership potential. The maximum digital subscription potential is in reasonable proportion to the readership of print newspapers, and thus to the quantity of subscribers to the print edition.

This ratio of digital subscriptions to print subscriptions is a benchmark figure that can be used to describe the success of regional daily newspapers in the digital subscription business.

The benchmark ‘subscriptions / 1,000 visits’

However, a more valuable metric is the ratio of digital subscriptions to digital reach. This key figure is better for a number of reasons: 

• It allows us to benchmark all possible digital publishing subscription products, not just those that offer print newspapers
• Unlike the number of subscribers, digital reach allows us to compare publishers according to a uniform standard thanks to tools such as Similarweb 

The ratio of digital subscriptions to digital reach is a key figure that describes how well a digital medium exploits its available reach. 

For pv digest, I measure this exploitation by dividing the number of digital subscriptions with the number of visits (according to Similarweb). For the 20 or so German-language daily newspapers that report their digital subscriptions according to audit standards  (IVW and ÖAK), I have calculated an average exploitation of 3.4 digital subscriptions per 1,000 monthly visits.

However, like with many benchmarks, there are individual cases that deviate from this average value, covering a wide range of up to 16 digital subscriptions per 1,000 visits to only 0.04. There are various reasons for this, including the maturity of a publisher’s digital subscription offer (those who have only just launched a paywall naturally lag behind more mature models) and the type of subscriptions offered (the “16 subscriptions per 1,000 visits” figure comes from an offer that was sold at a rock-bottom price that the publisher has since removed from their portfolio). 

We can also apply this benchmarking figure internationally, but with some sacrifices in accuracy.

Expanding this benchmark to 24 international publishers

The media considered here currently have an arithmetic mean of just under 15 digital subscriptions per 1,000 visits. At 7.4, the median average internationally is well above the average for German-language paid media.

Note: 

This selection of international publishers doesn’t follow any particular system. It is an arbitrary selection from very different markets. My selection is primarily intended to take into account large and well-known offerings, with the exception of the German daily newspaper Taz, which I have included because of the interesting opportunities for comparison in voluntary paid models.

I primarily took the digital subscription figures from FIPP’s Global Digital Subscription Snapshot (Q2/2022 issue). In some cases, I have replaced these values with my own, more up-to-date information. As a result, the data is more or less up-to-date. The quantities mentioned also do not, like the data on German-language newspapers, correspond to uniform measurement criteria. Nevertheless, my impression is that it is possible to learn from the comparison of these well-known paid content offerings.

Benchmarking paywall models

The paid content offerings presented here refer to four different paywall types:

• Freemium model: certain content is only available to paying subscribers whilst the rest is available to anyone for free
• Paywalls with a request to pay voluntarily: all content is available to read for free but visitors are asked for a donation if possible
• Hard paywalls: more or less all content is reserved for paying subscribers
• Registration/metered paywalls: readers can access a quota of content before being asked to pay. However, some of these models require the user to register and log in even for the first free read

These four paywall models are strikingly different in terms of their success as measured by the ‘subscriptions/1,000 visits’ metric. In part, this is not surprising. As content blocked by a hard paywall is very unattractive to non-subscribers, the reach of such websites is usually much lower and, as a consequence, the proportion of paying users is higher. 

Exceptions prove the rule: Slovakian paid-content success, Denník N, has a free stream of news content on its website, ensuring high access numbers, while at the same time all self-produced articles are behind the paywall.

However, the clear difference between freemium and metered models is worth noting. With both models, publishers try to maintain a balance between exclusive content on the one hand, providing subscribers with an engaging product experience, and free reads to allow for content discovery and subscriber acquisition on the other. Metered paywalls make better use of the existing reach than freemium models.

Benchmarking is just ‘one of those things’… 

The 24 media presented here are mostly very successful in their own way. It’s not really possible to group them together for many reasons. They’re in different markets, with alternative pricing and business models. Some have employed a paywall model for only a few months or years, others for much longer than anywhere else (Wall Street Journal for instance).

But there are commonalities, too. They all want to attract as many digital subscribers as possible. And the method of achieving this is the same – reach. They can be more or less successful at this. The exploitation metric described here makes a comparison possible at this point – not only between these publishers, but also for each subscription manager to their own offering. And from this comparison, productive questions and perhaps even tentative answers can arise. This is all this indicator can and will do.

Find Markus on Linkedin and, for our German-speaking readers, check out his monthly information service on the reader revenue business, pv digest.  Readers of pv digest are directors and C-level execs at publishing houses, digital-only publications and service-providers in the publishing sector. They enjoy the depth of pv digest's reporting as well as the commentaries and analyses of current topics and developments.