Following in the footsteps of The Sun, The San Francisco Chronicle, and The Financial Times, Newsweek has decided to remove its paywall. It will still offer digital subscriptions, giving paid subscribers access to premium digital content and early access to monthly issues before non-subscribers.
This move is not entirely surprising. With topical news content freely available through numerous media channels, paywalls represent a significant barrier to entry. Digital publishers struggle with the delicate balance between driving traffic with free content, versus monetizing premium subscriber-only content. If they make it too difficult to access content that can easily be found elsewhere, overall revenue (whether through subscription or ad revenue) will fall.
Newsweek is looking to take at least one page out of Netflix’s playbook. Netflix creates its own custom content, designed to keep subscribers coming back month after month. Netflix is betting that just a few “favorite” shows could be enough to justify a sub ten dollar subscription fee, every month. While topical news isn’t as unique as entertainment content, Newsweek’s ability to sustain subscription revenues rest heavily on their ability to deliver unique content worth paying for.
Another option would be to increase revenues from non-subscriber traffic. Offering programmatic segments, reselling behavioral data segments, or optimizing free content in real time based upon advertiser demand are just a few options to increase advertising supply revenues.
In any case, Time (or Newsweek) will tell.