Digital paywalls have helped news publishers like The New York Times and Financial Times stabilize their businesses and mitigate revenue losses in the wake of print’s collapse.
Now a new breed of digital-native publishers — like BuzzFeed, Vox, and Huffington Post — is considering whether to follow suit in a bid to decrease their reliance on the volatile ad market.
Both the incumbents and the disruptors in the online news business must face the same challenge: Millennials are hesitant to pay for their content. Only 25% of US millennials pay for some sort of digital news service (newspapers, magazines, or news apps), according to a 2015 survey from the American Press Institute. Meanwhile, 55% of them pay for entertainment content.
This aversion is encouraging change in the pay-for-content model. Legacy publishers are being forced to reevaluate their existing paywalls and subscription offerings in an effort to drive up new subscribers. Likewise, digital-native publishers that have historically shied away from paywalls are now considering alternative pay-for-content models like micro payments, user-data exchanges, and membership programs that could attract millennials.