Newspapers are returning to a business strategy that served them well in the heyday of street-corner newsboys shouting the front-page news. They’re enticing people with a little free online content before asking them to pay up.
After years of offering news for free, a growing number of newspapers have launched so-called metered pay walls, which give readers a few free stories online before requiring them to sign up for a digital subscription.
About 300 newspapers across the United States, and a growing number of Canadian media companies, have adopted such plans, which usually give subscribers some mix of web, smartphone and tablet computer access.
“A lot of our customers are telling us, ‘that’s fair,'” said Rob Gursha, vice-president of consumer marketing at the Star Tribune, a 300,000-circulation daily in Minneapolis. In November, the newspaper began charging people as much as $1.99 a week for online access to an unlimited number of story views a month. Nearly 20,000 readers have signed up.
For newspapers like the Star Tribune, it’s a second chance at digital success. As the internet gained in popularity in the 1990s, newspapers decided to give away news on their websites while continuing to charge readers for print editions.
By keeping online editions free, publishers hoped to gain enough readers to attract web advertising. But as readers flocked to free news on websites, many of them cancelled their print subscriptions. And online advertising hasn’t generated enough revenue to make up for the combined declines in print subscriptions and print advertising.
Fewer than a quarter of the 1,350 daily newspapers in the United States charge for online access so far, and none of the biggest newspapers in Canada currently have a pay structure. But industry executives are increasingly optimistic pay walls can boost digital revenue.
At Postmedia, testing of a metered system has been underway since last year with the Montreal Gazette and the Times Colonist in Victoria, B.C., the latter which it has since sold.
“We’re getting ready to pilot some more and look at some different models of metering and multiple platforms,” said Postmedia spokeswoman Phyllise Gelfand.
Newspapers take different approaches and have different price structures. Some set a limit on the number of stories and some on the number of page views. But there’s little doubt executives are hoping pay walls will spur a turnaround in the industry.
The Globe and Mail will take another run at charging customers some of its content this fall.
The newspaper had some of its content behind a pay wall several years ago before opening up the entire website, and its online archives, to the public for free.
“We feel that we’ve got some areas of content which lend themselves more to this than others,” said Globe publisher Phillip Crawley.
“As the industry has evolved there is a general global trend towards saying ‘Yes, but there also needs to be a value for accessing digital content.'”
Newspapers that have tried a pay wall say online visits decrease – at first. The Star Tribune‘s online page views dropped by up to 15% before rebounding to pre-pay wall levels within a few weeks, said Gursha.
The Dallas Morning News took a slightly different approach when it installed what’s known as a “leaky pay wall” in March last year. Editors tag exclusive or premium stories and reserve them for paying subscribers, while giving all other stories away for free. Although the move reduced online traffic by about a third, the newspaper has seen a steady flow of new digital subscribers, says Morning News publisher Jim Moroney. Print circulation revenue, meanwhile, also has gone up.
However, Crawley said there’s still value in the physical newspaper, as long as its presented the right way to a modern audience. The Globe has worked to revamp its paper in recent years focus more on colour pictures and a flashy front page that utilized new printing presses that its partner invested in.
“We still believe there’s good growth in print if you produce the right kind of print – high quality design, high quality paper, high-quality content,” he said.
UPDATE (April 4): The original story from Associated Press said the the Times Colonist was a Vancouver newspaper. It is, in fact, a Victoria newspaper. The story has been changed to reflect this.
