What Media Paywalls Tell Us About Online Advertising

  • “The act of paying is perhaps the most uncomfortable infliction that the two orchard thieves entailed upon us. But being paid, – what will compare with it?”

    -Herman Melville, Moby Dick

    This classic commentary on the nature of commerce clearly illustrates the crux of the paid content dilemma. No one enjoys paying for things, but everyone in the world obviously loves to get paid. The solution to this paradox in the world of online media has for years been the ubiquitous presence of advertising. Since Proctor and Gamble sponsored the first radio soap operas back in the 20s, advertising has been a constant presence in the media world, and in online video is usually found as prerolls, ad overlays, or pop-up ads. But recently, there seems to be a growing movement away from this revenue generating staple, a movement towards a model that separates participating media from the arena of free content entirely.

    Paywalls first hit the scene in a big way in 1997 when the Wall Street Journal asked online readers for a paid subscription in order to access their content (although some argue it was CompuServe back in the 1980s when they created content only accessible with membership) . While there was some backlash, many readers were willing to pay for the service and membership grew to more than 200,000 paid users in just over a year and has continued to grow. Since that time, more and more internet media entities have been moving away from revenue generated completely from advertising to this newer gatekeeper model using paywalls.

    But the question to be asked is: why this migration of certain types of online media away from the traditional advertising model? The answer is simple: not all content is the same. There are obviously certain types of media that clearly thrives under the old paradigm. Korean rapper and viral darling, Psy has pocketed somewhere in the neighborhood of a million dollars for his dance-demic, Gangam Style, money that is well deserved from his 1.4 billion views. Now, would people have paid to watch the hilarious video? Possibly. A million dollars worth? Probably not. For viral hits, advertising is definitely the way to go.

    But when it comes to media producers that are creating high-quality content without the unbelievable numbers of a viral hit, advertising probably doesn’t make sense. There is a reason why the Wall Street Journal has kept its paywall up for over 15 years; because the revenue generated from subscription access would seem to be greater than that created using a straight advertising model.  With hundreds of thousands of customers paying $21.99 a month, chances are that a paywall is paying well for the Journal and would do the same for a myriad of other online media producers as well.

    Pivotshare offers the ability for any producer of online media to make money selling access to their content using pay-per-view or subscription paywall models. Unlike many other platforms on the market, Pivotshare has no starting or monthly fees. Our self-service platform lets you change design elements, update media, or modify pricing at any time with the touch of a button. Pivotshare also allows you to embed your videos anywhere, allowing your fans to purchase your media without ever having to leave your site. If you are looking for the easiest way to sell media online, check out Pivotshare and sign up for a free channel today. We look forward to creating something wonderful together.

    To learn more about Pivotshare’s self-service paywall solution, click here!

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