What are paywalls?

It’s often said that there’s a mug in every deal, and if you don’t know who the mug is, it’s probably you.

That has often been the case regarding the internet over the last few decades.

Our expectation of unrestricted free access to websites, apps and online services has given rise to two main funding platforms.

The first involves the public voluntarily handing over vast troves of personal data to mysterious and unscrupulous marketing agencies.

Consumers are never told where this harvested data goes or how it’s used, though a great deal of it will be sold and resold around the world, for uses we wouldn’t even dream of.

The public is slowly waking up to this unprecedented mass surrender of privacy, by leaving social media platforms and becoming more cautious about their personal privacy online.

The second funding platform is online advertising – itself currently taking a battering from a combination of ad blocking software, low click-through rates for native ads and Google-led cookie changes.

As these options dwindle in viability, so the companies generating and maintaining online resources have to find a third funding method.

In many cases, this involves paywalls – barriers to access which are only unlocked by financial payments.

But what are paywalls? How do they work? And are they a business model we should be encouraging?

Pay and display

Some paywalled content is completely gated off – typically exclusive or niche content which can’t easily be found elsewhere.

However, to attract wider custom, paywalls are usually deployed in a freemium business model, where a certain amount of content or access is offered at no cost.

This might involve the introductory paragraphs of news articles being free to view with subsequent sections blurred out, or a basic version of a full software suite offered as a free app.

Once you’ve exceeded your allowance, or want to unlock more features, you have to supply credit or debit card details – thus unlocking the paywall.

Examples include additional articles beyond the two weekly freebies offered by the Spectator, advanced tools in Adobe software, or extra turns and power-ups in Candy Crush Saga.

Paywalls may involve a one-time fee, pay-as-you-go functionality, a tiered subscription package or even dynamic services charged in response to current trends, past engagement, etc.

Each option has its own benefits and drawbacks. Dynamic paywalls optimise income but cost a lot; freemium content draws in big audiences but requires compelling reasons to upgrade.

But I resent paying for free things!

This commonly stated belief goes right back to the point we made at the start.

Every app we download, software package we use and website we browse is a transaction. None of it is truly free.

Even Wikipedia – perhaps the ultimate example of a platform created and moderated entirely by volunteers – costs a lot of money to run.

There are server rooms to hire, programming and debugging to undertake, incremental software updates to roll out, press enquiries to respond to…

Wikipedia has chosen to pursue a fourth funding model – donations.

Regular users are asked to make ad hoc contributions to the (considerable) costs of keeping the world’s largest encyclopaedia online, and many of them gladly pay up.

Even a free-to-view website has to pay for site hosting, content production, patches, a domain name and so forth.

Unless you’re willing to pay for this yourself – a fifth (and entirely philanthropic) funding model – paywalls could represent the best compensation for your time and expenditure.