They want site traffic and bigger scale to appeal to major advertisers, but it's difficult to compete with digital giants like Google and Facebook that have billions of users. Paywalls can limit that scale, but replacing ad sales with reader revenue presents its own challenges.
Laurene Powell Jobs, the billionaire widow of Apple Inc. cofounder Steve Jobs, who paid $100 million for a majority interest in The Atlantic two years ago, requested the magazine's paywall be delayed, The Wall Street Journal reported, citing people familiar with the matter.
She wanted the magazine to beef up its staff and upgrade its platform to expand its audience and editorial scope.
So far, that strategy appears to be working. Monthly U.S. website visits rose 35% during the first half of 2019 from a year earlier, according to Comscore. The Atlantic’s ad revenue grew 13% last year, and digital advertising revenue increased 10%, the WSJ reported.
Now comes the hard part of possibly alienating many of those readers who have been trained to expect free access to online content. The Atlantic hasn’t released any details about how the paywall would work. Other publishers have implemented “stop meters” that grant access to a few articles a month before the paywall kicks in.
A stricter paywall may decrease pageviews that support ad revenue, but The Atlantic could also benefit from paying subscribers who are more committed to the magazine. Engaged readers are actually more valuable to advertisers than an audience of casual drive-bys who flit around the internet.
Other politics and policy sites, like The Hill, Vox, Politico and Axios don’t have paywalls, making it more imperative that The Atlantic publishes exclusive news and analysis that paying readers seek.
A recent study suggested that sites with stricter paywalls have thrived, while also investing in audience development, social-media marketing and email newsletters that drive site traffic and engage readers.
However, “subscription fatigue” may become more pronounced as consumers tire of being asked to pay for everything from news to streaming services, like Netflix and Spotify. When given a choice between paying for news or subscribing to a video streaming service, only 12% would pick news, the Reuters Institute said in its annual Digital News Report.