The key findings of a Tow Report written by Elizabeth Anne Watkins say it all, but there is one in particular that gets to the crux of the matter.

“The hyperefficient market for programmatic display ads has driven down their prices, reducing revenue for publishers.”

This, combined with the way ads impact the user experience, is killing digital advertising as a means of major revenue for major publishing companies. This means that many have turned to subscription models for revenue. 

Subscriptions, however, come with their own set of problems. Daily Maverick’s Francesca Beighton, as quoted in a Reuter’s institute article written by Laura Oliver, says, 

“The problem with paywalls is not just the ethical issues within a country like South Africa, but the fact that you are not allowing your potential fans to read what you have to offer before you cut them off[.]”

So how do companies manage these concerns? Laura Oliver addresses this by examining three major news companies that have successful and accessible subscription models. South Africa’s Daily Maverick, Spain’s elDiario.es, and Sweden’s Dagens Nyheter.

Daily Maverick

• Pay what you can afford

elDario.es

• Metered paywall
• Choose whether you pay at all

Dagens Nyheter

• Metered paywall
• Flexed paywalls based on age and events (free for first-time voters in election year)

Community is the one thing all of these publications have in common, and what allows these models to work. 

• Daily Maverick, operating in “the most [financially] unequal country in the world with 10% of the population owning 80% of the wealth[,]” has found that offering metered “Insider” memberships. No journalism is hidden behind a paywall, but Insiders get benefits like no ads, commenting, and interaction with the journalists. 

• elDario.es uses a metered paywall that pops up after ten free articles in a month, but has an option of “I can’t pay at all” or setting your own membership rate higher than the one listed. And, over 7,000 of their members have chosen to set those higher fees. 

• Dagens Nyheter also has a metered paywall that appears after a certain number of free articles, and uses membership levels similar to Daily Maverick. Additionally, they flex their paywalls and memberships depending on needs they see in the community. For instance, they offered free subscriptions to first-time voters during election year, and free subscriptions for anyone in the three weeks leading up to the election. They offered similar deals during the COVID-19 pandemic. Of these free subscribers, they see as many as 30% convert to paying once the deal ends.

But do these subscription revenue models replace ads?

Not entirely, no. Not yet. Daily Maverick Insiders only account for 32% of their revenue, elDario.es is split 50-50 between ads and subscribers, and Dagens Nyheter has been the most successful with readers accounting for 78% of their revenue. 

Subscription-only models are new and just in the making, with new understandings of reader loyalty and paywall models still in flux. How important really is the user experience? How much are people willing to pay out of loyalty – or for a lack of ads? 

Ad blockers are staple elements of some of the most popular browsers and antivirus programs. Elizabeth Anne Wilkins’ report points out that,

“[A]s users and developers alike push toward the adoption of ad blockers, we’re seeing more evidence that even those ads that do get seen are bringing in less money for publishers.”

Even for companies that may not want to shift away from advertising revenue, it would seem that they are quickly losing that option.