Monetizing Online Content: Digital Paywall Design and Configuration

Rußell Robert, Berger Benedikt, Stich Lucas, Hess Thomas, Spann Martin

Abstract
The media industry was among the first affected by digitization, because digital technologies have changed content production, distribution, and consumption profoundly. Most media companies have suffered revenue losses, being unable to adapt their monetization strategies to the rapidly changing media consumption patterns of their recipients. Additionally, advertising revenues have proven to be a less reliable revenue source in online than in offline media markets. Consequently, a major obstacle to the content providers’ successful digital transformation is the establishment of sustainable revenue streams (Chyi2012). The market for music and video content reveals a trend toward direct monetization, with subscription-based streaming services such as Spotify or Netflix showing increasing revenues. However, other media markets, including the market for news content, still struggle to monetize their content online (PricewaterhouseCoopers2019). After extensive experimentation with various monetization approaches and several failed attempts, more and more news content providers adoptdigital paywallsto counter the impending market trends. While the term digital paywall is commonly used in the context of news content, the functionality of this instrument to govern consumers’ access to online content is also important for other media products such as music, videos, or games. However, a standard digital paywall does not exist. Owing to the wide range of and new developments in configuration options, the limited experience with digital paywalls in practice, and a lack of research on this topic, it is still unclear which factors determine the optimal design of a digital paywall.

Keywords
digital paywalls; online content; monetization; revenue models; pricing