Reader Revenue or Website Monetization? | Which One to Choose?

Last updated on Nov 18, 2022

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Reader Revenue or Website Monetization? | Which One to Choose?

Any publisher, big or small, reaches the point where they need to decide on how to turn their content (and audience) into money. Luckily, there are a myriad of ways to monetize a website today.

But for most publishers, the choice lies between reader revenue and website monetization with ads. However, the two models are very different and can be seen differently by the publisher's readership.

In this article, we'll compare reader revenue models and website monetization to help you decide which model is right for you.

What is Reader Revenue? 

Reader revenue, simply put is when your readers pay publishers directly. . The scope of reader revenue can be very different depending on the organization. It can be in the form of financial donations and micro-payments, benefits-based memberships, and subscriptions. 

For publishers, monetizing their content with reader revenue is one of the most lucrative opportunities to scale their profits and continue to support the work of their editorial teams. 

In fact, a recent study revealed that reader revenue strongly competes with display advertising for being the key revenue stream for commercial publishers (79%).subscription revenue streamSource

Reader Revenue Pros & Cons

Reader revenue or subscription business model has several advantages and disadvantages for publishers.

Pros:

  • More predictable as the revenue stream is more or less constant compared to ad-based, which heavily depends on website traffic.
  • More fair revenue stream than ad-based, which generates higher returns based on traffic geolocation. 
  • Offers a more premium look to the website by not having ads, which is especially relevant for reputable publishers.
  • Crucial for premium publishers with large editorial teams to support quality content and give a feeling that their work is valued.

Cons:

  • Need to have high-quality and unique content like opinion pieces and reports that can't be found elsewhere.
  • Depending on the reader base, it can generate less revenue than advertising.
  • Readers are still reluctant to pay for content. Recent research by IAB Europe shows that 75% of Europeans would choose to have targeted advertising rather than pay for access to websites and content. 
  • Content doesn't get the reach it would if it was supported through advertising. 

Different Types of Reader Revenue Models

There isn't a consensus about how many different revenue models there are, especially considering that these models often overlap for many publishers. However, the most popular terms that have emerged over the years in reference to reader revenue models are subscriptions, contributions, and memberships. We'll go over all of these in turn.

Reader revenue models


Publishers can implement subscription modelx in the following ways

  • Access restriction by article count: Publishers can restrict access to content based on the number of articles a reader can read over a period of time (usually 30 days). If a reader wants to read more articles within the specific timeframe, they need to subscribe. Once the timeframe is over, the meter or paywall will reset back to zero. Publishers can also deploy dynamic paywalls to maximize conversion rates for readers more likely to subscribe. The New York Times is a popular publisher that employs this reader revenue model.

Access restriction by article countSource


  • Access restriction to premium content: Some publishers may make some content available for all users (or logged-in users) while reserving premium content for subscribers. Typically, this is done to maximize the value of the content that may attract more loyal readers. An example of such a reader revenue model is State of Digital Publishing.

restriction premium contentSource


  • Access restriction to all content: Some publishers may require readers to purchase a subscription to view any content on their websites. Commonly referred to as a hard paywall, this business model only works for reputed organizations where readers are confident in the quality and uniqueness of the content provided. Publishers may offer a trial version or provide the first snippets of the article with an option to subscribe to continue reading. An example of such a publisher is Financial Times.

restriction full contentSource

  • Hybrid subscription models: More and more publishers are now deploying business models where they offer subscription models with one or more features discussed above. For instance, Digiday offers readers member-exclusive content while restricting access to free content by three articles a month.

hybrid 1hybrid2Source

Key Factors for Selecting a Reader Revenue Model

Firstly, publishers must consider how a reader revenue model fits with readers' perceptions of their brand values. Secondly, publishers should decide how important advertising revenue is for their business. 

Publishers who do not restrict access to their core content (for example, with contribution models) can leverage an advertising model alongside to have a safe and sustainable revenue stream. This can be especially useful for publishers with audiences with diverse levels of income.

However, publishers with subscription models might not be able to monetize the website using ads since subscribers may get disheartened seeing ads while also paying for a subscription (which is usually perceived as access to premium user experience).

Ultimately, publishers should think carefully about their decision's long-term sustainability and look for tech partners that can see their business model as a whole with different revenue streams. For example, quickly switching from a advertising model to a subscription model without considering the risks may negatively impact revenue in the short term and even threaten the organization's livelihood.

What about Website Monetization using Ads? 

Website monetization using ads is how more than 99%of the publishers across the globe generate their revenue.

When it comes to website monetization, programmatic advertising is the leading digital advertising method today. According to eMarketer’s forecast, global digital ad spending has been growing over the years and will reach $585.96 bn by 2023.

digital ad spending Source

Since creating content is a difficult job in itself, many publishers reach out to website monetization platforms to take care of their monetization efforts. 

The benefits of this decision are crystal clear. Monetization platforms usually offer access to premium programmatic technology like header bidding, which is difficult to acquire for an average publisher. 

On top of that, premium monetization platforms have dedicated AdOps (Ad Operations) teams that take care of all technical aspects of monetization from start to finish. Each is also paired with a dedicated Account Executive that offers consultations on the best ad placements, ad formats, and various optimization techniques. 

Different Types of Website Monetization

There are different types of website monetization, and many tech partners focus solely on one type of online advertising. We'll focus on the 3 most popular website monetization types:

Website monetization models

Reader Revenue vs. Website Monetization

Finally, how do you decide whether reader revenue or website monetization is right for you?

Well, as technology is constantly changing, it remains important for publishers to have a tailored and secure user experience, which requires the knowledge of their audience. For example, some audiences may be reluctant to see advertising if they're paying for a subscription. 

Ad-based monetization might be the best way for most publishers, with its low barrier to entry and steady revenue stream. The reader revenue model requires more nurturing and time to pay off. However, reader revenue may generate better results for your business in the long run, if you have a large and engaged audience.

Nevertheless, if you decide to go the advertising route, make sure to respect the user experience, i.e., don’t clutter your website with too many ads, use user-friendly ad formats, and ensure ads are brand-safe. Again, this is where you'd have to enlist the support of a monetization platform with all these services.

Undeniably, more revenue initiatives push publishers to look for other ways to monetize their content. Analyze your audience to see how likely they are to pay for your content. You can send out polls to your most loyal readers to ask them if they'd rather pay for the content or see ads. 

It's also possible that a combined approach (reader revenue model + advertising) might be the best choice for your business.

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Alise Zaiceva
Alise Zaiceva
Alise Zaiceva is a content marketing specialist at a website monetization platform Setupad. She’s passionate about content and helping publishers scale their businesses through powerful digital marketing strategies. In her free time, she enjoys doing yoga, listening to techno, and expanding her knowledge of tech.

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