Digital Paywall Design: Implications for Content Demand and Subscriptions
Name
SSRN-id2906530.pdf
Description
Accepted version
Size
4.28 MB
Format
Adobe PDF
Checksum (MD5)
4d49e405a00017b6c79d0320f099b73b
Author(s)
Aral, Sinan K
Dhillon, Paramveer S.
Date Issued
August 2020
Journal
Management Science
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)
Citation
Aral, Sinan and Paramveer S. Dhillon. "Digital Paywall Design: Implications for Content Demand and Subscriptions." Management Science (August 2020):dx.doi.org/10.1287/mnsc.2020.3650 © 2020 INFORMS
Version
Author's final manuscript
Abstract
Most online content publishers have moved to subscription-based business models regulated by digital paywalls. But the managerial implications of such freemium content offerings are not well understood. We, therefore, utilized microlevel user activity data from the New York Times to conduct a large-scale study of the implications of digital paywall design for publishers. Specifically, we use a quasi-experiment that varied the (1) quantity (the number of free articles) and (2) exclusivity (the number of available sections) of free content available through the paywall to investigate the effects of paywall design on content demand, subscriptions, and total revenue. The paywall policy changes we studied suppressed total content demand by about 9.9%, reducing total advertising revenue. However, this decrease was more than offset by increased subscription revenue as the policy change led to a 31% increase in total subscriptions during our seven-month study, yielding net positive revenues of over $230,000. The results confirm an economically significant impact of the newspaper’s paywall design on content demand, subscriptions, and net revenue. Our findings can help structure the scientific discussion about digital paywall design and help managers optimize digital paywalls to maximize readership, revenue, and profit.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1287/mnsc.2020.3650
