Trends in paywall. The future of newspaper?

Music, games, news, apps are generating billions in revenues lately. In France, Forrester reports that the digital content market represents 1 billion Euros this year and will continue to grow to 1.8 billion in 2017 thanks to the proliferation of connected devices and the increasing popularity of subscriptions models like Spotify.

This trend is proved true for newspapers, as online users are increasingly ready to pay for online content and Forrester anticipates that in 2017, 20% of tablets users will pay to read the news online.

This shift in users behavior is good news for publisher and they certainly make it happen. How? By massively putting paywalls in place to create new sources of revenues to offset declines in print revenue. As shown in the infographic from bestcollegeonline.org below:

• More than 300 majors American online newspaper have put in place some form of paywall
• That number has doubled in just the last year and continues to grow.
• Some include: The New York Times, 49 of the Gannett’s 80 community newspaper markets, Lee Enterprises publications and The Los Angeles Times.

Check this out:

Source: Paywall Trends

Is it worth it?

Difficult question here. Some failed because of the loss of traffic inhere in any paywall implementation or a disappointing number of subscriptions or let’s face it because of the quality of the content that was not worth it!

For some others, the consequences have been more beneficial: the New York Times has become the reference when it comes to successful paywall, as stated in the infographic:

• Since March 2011, the publication has announced it has enrolled 454,000 paid subscribers.
• And saw its daily circulation jump a massive 73% over the previous year to 1,586,757.
• NYT subscribers pay between $15 and $35 per month for the digital version of The Times.
• After NYT rolled out its paywall in early 2011, 41 American papers adopted paywalls in the third quarter of 2011.
• Many, including the publishers of The Chicago Tribune, which will install its own digital paywall later this year, have pointed to the success of The New York Times’s metered access model in support of their own.
• However, NYT expects it’s paywall to be revenue neutral.
• They expect circulation revenue to climb 25% by the end of 2013
• Gannett also projected that their paywalls and price increases would bring in an additional $100 million in annual operating earnings during 2012.

Mentalities are changing from both sides: users and publishers. Paywalls can certainly be seen as a long term bundled subscription offering, increasing customer’s engagement. What do you think? What are the key success factors for paywalls. Please share your experience.