Metered Paywall vs. Freemium: Which Publishing Model is Right for You?

The terms “metered paywall” and “soft paywall” are sometimes used to describe a freemium publishing model. Both platforms utilize free content to attract casual readers before attempting to convert them into paid customers. However, there are small yet significant differences between the digital monetization strategies.

Before diving into these variations, let’s explore the benefits of offering free content in addition to paid, giving publishers the opportunity to have the best of both worlds.

Why Free Content is Critical

Digital publishers need to make money to keep the lights on—and with the rise of ad blockers, relying on traditional display advertising just won’t cut it. Charging for content is a no-brainer, but it must be done strategically. Very few publishers have what it takes to survive with a hard paywall, so they need to offer some sort of free content in their model. Here’s why:

  • It’s virtually impossible to build a base audience without it. Charging users to read your content without any context is like refusing to hand out samples of your product at the farmers market. The try-before-you-buy options are so endless, people will simply move on to the next publisher.

  • Free content on the Internet is ubiquitous. Unless you plan on relying solely on universally-appealing exclusives, someone has already posted a version of what you’re saying online … for free. The only way to compete is to play the game.

  • It promotes content discovery via multiple sources. Content hidden behind a hard paywall can’t be shared on Facebook, Twitter, or any aggregation site. Social media engagement is believed to not only improve SEO, but content also reaches potential customers each time it’s posted, tweeted, liked or shared via email or social media. The absence of free content kills any chance of word-of-mouth recommendation.

Metered Paywall vs. Freemium: What’s the Difference?

In a freemium model, publishers choose a selection of free content for their readers to browse at no cost. Premium content and features are offered to customers who register, subscribe, or pay to read and take advantage of them. Often, this access is granted in the form of a paid subscription, but content can also be sold a la carte, on a pay-as-you-go plan.

Models that implement metered paywalls allow potential subscribers to consume content based on a more flexible range of aspects. Many publishers, such as the New York Times, limit consumption by a number of articles, but others also use other metrics to determine when a reader has hit their content limit for a given period of time. This can include anything from time on site and page views to geographical location or the device used to consume the content. Once customers consume their limit of freebies, they’re prompted to purchase a subscription, enroll in a micropayments plan, or complete another action in order to continue reading.

When a Freemium Model Works

Imagine you’re an established publisher with a big audience and a huge assortment of content, ranging from the simple and newsy to the popular and exclusive. This large, varied pool of content gives you a lot of flexibility when determining which pieces readers can have free access to, and which they should be paying for. You can offer so much without charge—focusing primarily on good content without dipping too much into your popular or “premium” pool—that readers will have an opportunity to sample a wide range before being prompted to pay up.

Utilizing a freemium model makes sense for companies who have a large reader base, loyal readers of exclusive columns or installments, and a lot of different kinds of content. Using popular content as leverage to improve conversion rates, like legal publisher ALM did with their Supreme Court Briefs, can boost revenue without resulting in a significant impact on subscriber numbers.

Freemium models also give publishers the power to determine which content and services should be reserved for paying customers. This control over what defines “premium” allows companies to continually test price points, subscription offerings, and features that resonate with their audience without ever making their offerings overly complicated. Although the perks of paying may periodically change, publishers can ensure that they remain relevant to users and easy to maintain from the backend, helping everyone from marketing and customer support to engineering.

When a Metered Paywall Works

For publishers who are looking to provide an individualized experience or build up their audience, a metered paywall may be the answer. Giving readers the option of choosing what fits into their content limitations, instead of designating which items are free and which are premium, allows for a more personalized user experience. This ensures that users are able to consume the content that best aligns with their interests, which increases their satisfaction and the likelihood that they’ll recommend your content. Word of mouth is critical, as 70 percent of U.S. consumers trust it more than other forms of advertising.

However, this customer-first approach isn’t entirely altruistic—companies can and do benefit from this user-led consumption of content. It gives publishers valuable data about true on-site behavior, unaltered by paywall restrictions. This information, combined with basic knowledge about their age and geographical location, provides a well-rounded understanding of which types of customers gravitate toward which types of content.

This data can then be used to reliably target specific audiences with products and services they’ll find useful or enticing, including content bundles, various pricing models, or subscriptions based on device usage. The options are endless.

Metered paywalls also increase the number of eyes on a publisher’s content simply because readers are never “locked out” of accessing specific articles before hitting their free quota. Content can be successfully shared without premium-specific restrictions—and a larger audience means more conversions. “After more than two years of promoting the freemium model, we now know that metered paywalls are simply more effective,” says Rado Bat’o of Piano Media. “Exposure to the paywall increases significantly because publishers no longer decide what content to lock. The meter shifts the focus from a premium content model to a usage-based model.”

Finding the Right Publishing eCommerce Model for You

There are no two identical media companies, and therefore no one-size-fits-all solution to figuring out how publishers can successfully monetize their content. Assessing what currently works for your publication, or deciding what you want your company to be, is the first step toward generating revenue with a model that works with your audience, content pool, and overarching company goals.

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