The future of digital journalism and the role of web monetisation

Alex Lakatos

Digital news media have explored various means to replace declining advertising revenue. These include Subscription Models, Membership Programs, Sponsored Content, Affiliate Marketing, Events and Experiences, Data Monetisation, Grants and Donations, and Micropayments.

Subscription models

Paywalls have become a popular revenue model. Their effectiveness varies across regions and publications. While some publications are experiencing great success, most are struggling to convert free readers to paid subscriptions.

Since the early days of the internet, free access to news has been the norm, making paid or subscription models much more difficult to implement. Only 16% of Americans pay for digital news subscriptions, compared to 22% who subscribe to streaming services like Netflix. Many readers believe they can find similar content for free elsewhere (74%) or that news isn’t worth paying for (66%) (PR Daily).

Some successful examples of subscription models are:

• The New York Times – over ten million digital-only subscribers, driven by a dynamic paywall that limits free articles.
  
• The Wall Street Journal – an anti-scroll paywall that has steadily increased its subscriber base to 3.3 million.
  
• The Athletic – a collapsible paywall that helped to double its subscriber count to 3.3 million in a year.
  
• The Washington Post – a hybrid model with a metered paywall that has increased their digital subscription base while maintaining a strong online presence.
  
• Financial Times – a hard paywall that attracts a high-value audience willing to pay for specialised financial news.

Closer to home – News24, South Africa’s largest news site, implemented a freeminum paywall (a mix of free and premium content) that has seen 80,000+ subscribers since 2020. Netwerk24 has over 90,000 subscribers (having introduced a hard paywall in 2014), making it South Africa’s largest digital news subscription platform.

However, the reception to paywalls in South Africa has been mixed. Many consumers are frustrated, feeling that they are being forced to pay for content that was previously free. There are also concerns that paywalls may widen the digital divide, limiting access to information for those who cannot afford subscriptions.

The ‘Pay-What-You-Want’ (PWYW): a flexible alternative

Micropayments enable readers to pay small amounts of money for specific content they access. The "Pay What You Want" (PWYW) model falls within this realm, allowing users to determine the amount they wish to pay for content. Both fall into the Web Monetisation realm, which holds opportunities for revenue strategies that work alongside targeted advertising, sponsored content, and e-commerce integration.

Daily Maverick and The Guardian have membership models where readers choose how much to contribute. De Correspondent allows subscribers to set their own prices, offering different tiers of membership where readers can choose the amount they feel is fair for the content they receive and the New York Times has experimented with flexible pricing for select digital content.

The psychology behind consumer willingness to pay for content

Monetisation strategies on the Web must encompass an understanding of human psychology.

Behavioural economics tells us that individuals consider the following when deciding when and if to purchase something:

• Price sensitivity: How the cost of the item compares to their available resources and perceived value.
  
• Perceived value: The overall benefit they expect to receive from the purchase, including quality, utility, and emotional satisfaction. A high perceived value translates to the customer’s belief that the product or service is worth their investment, contributing to brand loyalty, competitive edge, and higher conversion rates.
  
• Social influence: Readers are more willing to pay when they see influencers or peers endorsing a platform. According to GlobalWebIndex, 54% of social media users use social media to research products and 71% are more likely to purchase products and services based on social media referrals.
  
• Convenience: The ease and accessibility of making the purchase, including factors like the purchasing process.
  
• Urgency and need: The immediacy and necessity of the product or service in their current situation.

Other factors include the ‘anchoring effect’ whereby presenting high-priced options first, lower-price subscriptions seem more reasonable; ‘loss aversion’ – the use of free trials and money-back guarantees to reduce perceived risk and ‘customisation and personalisation’ where recommendations and customisable features can enhance the perceived value of the content.

A simple ‘How-To’ guide for using Web Monetisation from Interledger

Publishers will need:

1. A digital wallet that supports Web Monetisation (you can use the Interledger Wallet).
2. A wallet address or payment pointer: Your digital wallet will generate a unique wallet address or payment pointer, which is like an email address for receiving payments.
3. Web Monetisation: Add your wallet address or payment pointer to your site. When visitors with Web Monetisation enabled in their browsers visit your site, they can send payments directly to your wallet.

There are a variety of strategies that can be considered:

• Readers can choose to pay what they want to for access to premium content.
  
• Publishers can offer exclusive content or early access to articles for paying readers to increase engagement and loyalty.
  
• Joining a Web Monetisation Fellowship: This programme provides resources, workshops, and mentorship to help content creators monetise their work.
  
• Participating in hackathons and innovation competitions can assist digital news media to build a community of tech-savvy readers who are interested in supporting innovative monetisation models.

As the digital news industry continues to evolve to meet the challenges of today, sustainable monetisation strategies are opportunities. Behavioural economics suggest that flexible models like PWYW could empower news organisations to implement dynamic pricing solutions, paving the way for a more inclusive and financially viable future.