In the summer of 2014, The New Yorker did something many had thought unthinkable: it lifted the paywall to its digital archive, granting readers free, unlimited access to over seven years of quality journalism (Ellis 2015). Before that summer, the magazine had boasted “one of the most airtight subscription systems” on the Web, allowing nonsubscribers access to only about 25% of its articles in any given week. But editor Nicholas Thompson was confident it was time to introduce a new digital policy and launched what Ellis (2015) would later call a reader’s “Gold Rush.”

Was the switch to free a sound business decision or a catastrophic mistake? For The New Yorker, at least, the all-you-can-read buffet model worked out in its favour. Five months later, the magazine successfully introduced a metered paywall system in which visitors could read up to 10 free articles a month before having to pay for access. Not only did this strategy result in a 30% jump in unique visitors, it also boosted paid subscriptions by a shocking 85% (Ellis 2015). This strategy thus enabled the magazine to reach new readers, expanding its audience and increasing advertising revenue, while also drawing subscription revenue from its more dedicated readers. In doing so, The New Yorker cleverly transformed a “gold rush” for readers into one for publishers.

Importantly, though, The New Yorker isn’t just a magazine; with over 90 years of material in its archive (“About Us” n.d.) and an audience of 4.7 million (“The New Yorker Media Kit” 2016 ), it’s a veritable cultural institution. In a world where readers have access to virtually unlimited free web content, The New Yorker may be among the few publications capable of monetizing its online presence. Smaller, less-established publications may lack the kind of reach and reputation needed to transform free readers into paying subscribers; indeed, even larger magazines like The Toronto Star have tried and failed to implement working paywalls (Williams and Pickard, 2015). Hence, as alluring as The New Yorker’s success story is, it should be taken as the exception, not the rule, of digital magazine publishing.

Although many believe there is money to be made from online content, others are confident that it’s simply “impossible to compete with free” (Jeff Jarvis 2015). The big question for small magazines, then, isn’t how to monetize digital content, but whether it’s possible at all. In what Jarvis calls “a media ecosystem built on abundance,” the question arises whether digital content has any value at all. When information is free and everywhere, can digital paywalls ever succeed?

Context: An Ecosystem of Abundance

Many periodicals became interested in pay-for-use web business models over the last decade, as the industry started seeing dramatic cuts to advertising revenue. From 2006 to 2014, for example, the newspaper industry witnessed a 30 billion dollar drop in ad sales (Williams and Pickard 2015). “Magazines,” writes Thad McIlroy, “while not as severely challenged as newspapers…are clearly on the Internet hit list” (2015). Over the last decade, consumer magazines have witnessed drops in ad volume as large as 25% (“Consumer Magazines: Ad Pages by Publication” 2013); for many news magazines, that number is closer to 50% (“News Magazines: Ad Pages by Publication” 2013). The drops in ad sales are largely the result of drops in magazine sales, which fell by nearly 10% in the United States in the first half of 2012 alone (Audit Bureau of Circulations, via Roy Greenslade 2012). And while digital editions are on the rise, their growth is marginal compared to these losses: as of 2012, digital editions represented less than 2% of the total magazine market (Roy Greenslade 2012).

These numbers continue to grow, of course, as more and more readers are turning to online content. Almost 40% of US readers report accessing news online or on a mobile phone (Pew Research Center, 2012) and nearly 10% of Canadians report reading digital magazines (“Number of Canadian Digital Magazine Readers Up 57%” 2014). By charging readers a fee to access content, paywalls and digital subscriptions hypothetically transform these readers into revenue. Indeed, publications like The New Yorker, The New York Times, and The Wall Street Journal seem to have found success with this model. The Gannett Company’s digital subscriptions accounted for more than $100 million of its revenue in 2013, for example; for The Times, that number was $169 million in 2014 (Williams and Pickard 2015).

But even optimistic reports concede that building up a digital subscriber base can be hard work. Magazines Canada’s recent report on the subject, for example, states that “even a well-known brand like Vogue…has seen a slow uptake on digital” (“Magazines in the Digital Age: How to Create and Sell Your Digital Edition” 2014). North Americans may be reading more and more online, but, for the most part, they aren’t doing it through subscriptions. Although a percentage of readers still regularly look to specific publications for content, many prefer a piecemeal approach, reading a scattering of single articles from many different sources. For news websites, for example, these casual readers or “fly-bys” make up a whopping 93% of unique visitors (Williams and Pickard 2015). Charging readers for access to an entire magazine when most of them only want a single article just isn’t practical.

Williams and Pickard (2015) argue that “hard paywalls ma[k]e sense for only ‘the most essential news providers’—places where readers cannot find the same information elsewhere.” This is why magazines like the The Wall Street Journal, which publishes content that directly pertains to readers’ career success, are able to charge flat access fees. For bankers and others working in finance, the content The Wall Street Journal publishes cannot be replaced by a simple Google search; the magazine is the definitive resource for the industry. General consumer magazines and literary journals, on the other hand, may not be seen as essential by their readers. When their are countless free alternatives available online, charging for content “creates a necessary walled garden around it” (John Paul Titlow 2012). While subscription or paywall models may work for the most dedicated readers, for fly-by readers—the main source of advertising revenue—they likely will not.

Hence the thinking behind “soft” or metered paywalls like The New Yorker’s, which only charge readers for access to content once they’ve reached a given monthly quota. These models capture revenue from the most dedicated readers—the readers who visit the site frequently and read multiple articles—while also retaining fly-bys and, by extension, advertising dollars. A number of publications, including Harper’s and The New York Times, have successfully implemented metered paywalls over the last five years. But many others, such as Huffington Post and The Toronto Star have removed them altogether.

While the situation doesn’t look good for general interest publications, some smaller, more specialized magazines such as The Dallas Morning News have managed to draw revenue from online subscribers (Wells 2013). In 2009, the publication decided to increase its prices by 40% to make up for slow advertising sales. Although the company saw a 12% dip in subscribers, it now draws about 32-33 percent of its total revenue from subscribers and is pushing to increase its prices again. Publisher James Moroney thinks one reason The Dallas Morning News’ can compete with free sources because it offers readers in-depth analyses and new perspectives that others do not. Mike Klingensmith of The Star Tribune Media Co. agrees. He believes that paywall models work for smaller papers because they have “unique, local content the the readers want” (Wells 2013). Since introducing a paywall in 2011, for example, The Star Tribune connected with over “27,000 people [it] didn’t have a subscription relationship [with] before” (Klingensmith, via Wells 2013). Like The Wall Street Journal, The Dallas Morning News and The Star Tribune have found a way to make their content indispensable—or at least, valuable—to readers by providing something competitors do not. Perhaps, then, paywalls can turn profits, but only for publications that offer information or opinions that no one else is (and that readers actually care about), a difficult feat in today’s increasingly crowded digital world.  

Value in the Digitized World

Klingensmith and Moroney raise key questions about perceived value. Research in economics and marketing, as well as from within the magazine industry itself, suggests that consumers perceive value differently depending on its context. Magazines Canada, for example, asserts that credibility, quality, and interest increase an article’s value (“Digital Magazine Media Fact Book” 2015). Much of this value stems from a magazine’s print reputation; in a 2014 survey as many as 71% of survey respondents agreed that they “trust a magazine or newspaper website as much as the magazine or newspaper itself.” This research suggests one reason why digital offshoots of longstanding print publications like The New Yorker can successfully implement paywalls while digital-only publishers like The Huffington Post cannot. But value judgments are also influenced by a content’s digital format; “Magazine website content,” the Fact Book argues, “rates ahead of sites provided by newspapers, TV, social networks and other media” (2015). The fact that readers still associate online magazines with their “turstworthy” print counterparts may play a role in this finding, however. So although readers may favor magazines over other publications right now, it remains to be seen whether this will hold true in coming years, as more and more publishers opt to go digital-first or digital-only.

Publication frequency and complexity of content can also affect readers’ value judgments in the digital realm. Magazines Canada, for example, argues that “you can charge more for an enhanced product, and attract a different and larger pool of advertisers” (“Magazines in the Digital Age: How to Create and Sell Your Digital Edition” 2014). They encourage publishers to include more multi-media features in their digital editions and websites. Others, on the other hand, believe that customers may perceive “simplicity (amid a roiling sea of digital content) as a value worth paying for” (John Paul Titlow 2012). Related research suggests that audiences value frequently updated content above all else, including quality and quantity of information and reliability of the brand (“Digital Magazine Media Fact Book” 2015). This is reflected The New Yorker‘s switch to what Deputy Editor Pamely McCarthy refers to as the Washington Post model: “get[ting] things mostly right,” without enlisting “an army of fact checkers” (via Ellis 2015). While print editors often take months perfecting a single article, online editors simply don’t have the same luxury—and apparently don’t need it. Online “readers are looking for…a persistent connection to the magazine and their favorite writers” (Ellis 2015)—quantity first, quality second.

Finally, there’s the undeniable problem of free content. One reason the Huffington Post’s iPad edition didn’t sell well, Titlow (2012) argues, was that “readers were already conditioned to expect free content from the HuffPo brand”. Free, it turns out, is a very special price. In a series of experiments, researchers Kristina Shampanier, Nina Mazar and Dan Ariely found that consumers perceive free differently than any other other price (2007). “When people are faced with a choice between two products, one of which is free,” they conclude, “they overreact to the free product as if zero price meant not only a low cost of buying the product, but also its increased valuation.” In other words, free products are often more desirable simply because they are free—regardless of quality, reliability, or any other factor. No matter how inexpensive a magazine’s digital subscription is, when the competition provides the same information for free—even at a loss in quality—the competition will likely win out.


As Craig Mod aptly puts it, “Tablets are eating our paper” (2012). More and more readers are looking online for news and entertainment, consuming it more haphazardly, and paying less and less for it than ever before. To serve these readers, magazines need to go digital, but to go digital, they need to restructure the way they think about revenue. While subscription-based models may work well in the print world (a debate in and of itself), they just don’t cut it online. With endless competitors offering the same content for free, paywalled magazines need to convince readers that they are exceptionally valuable. Even with added multimedia features, frequent updates, unique perspectives, and trusted print counterparts, however, the power of free may still be too strong and the perceived barrier of the paywall too high. No matter how much the industry wishes it weren’t so, charging for digital magazine subscriptions just doesn’t make sense.

Unless you’re a renowned multinational magazine with more than 4 million subscribers and a 90+ year archive, that is. Then you can pretty much do whatever you want.