Top papers to charge online, but how?

Posted on December 1, 2011

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Three of the world’s most influential newspapers have finally come to terms with the notion that charging readers online is the only way to survive.

There is far less agreement on how to go about that, the publishers of The New York Times, The Times of London and the Financial Times made clear at this week’s Reuters Global Media Summit.

The New York Times Co’s launch of its long-awaited online payment system early next year will be the latest effort to convince readers to pay for what they have come to expect free.

It will join News Corp’s Times of London, whose own tests have achieved mixed results.

"We create very valuable, important content and we are trying to ensure we get fairly compensated for it," said News Corp Chief Operating Officer Chase Carey.

Carey and other top executives speaking this week at the Reuters summit are trying to calibrate prices and bundles of products that will not alienate advertisers, fearful of steep drop-offs in readers, and consumers, who are accustomed to free access.

News Corp also owns the Wall Street Journal, which remains one of the few newspapers to have generated a healthy online business from subscriptions over the past decade.

But the strategy, which worked well for a business publication, has failed to yield similar results for News Corp’s most recent attempt to charge readers of the Times.

News Corp put all the news from the Times’ website behind a pay wall, charging 1 pound for a day or 2 pounds for a week’s access. Its online readership dropped by almost 90 percent.

Success will be measured over years, not a quarter, Carey said. "The media always want to declare judgment in a quarter."

The New York Times, on the other hand, will employ a different tactic. It plans to announce as early as January prices for its "metered" model, which will charge readers after they access a limited number of articles for free on NYTimes.com.

Arthur Sulzberger Jr, publisher of the New York Times, took pains to make clear the stark differences between the two papers’ approach.

"Please don’t compare us to the Times of London," Sulzberger said. "They have a gate, a real wall. We aren’t doing that. To compare us to them is just a false comparison."

He added: "We want to be part of the digital ecosystem."

It will be the second major attempt for the New York Times to convince readers to pay, mindful of the publishing industry’s challenge.

"We’re going to test it. We’re going to learn. We are going to adapt," Sulzberger said.

The U.S. and UK newspaper industries suffered an unprecedented decline in advertising spending that pushed papers into bankruptcy and resulted in thousands of job losses. Print papers and magazines have also competed with free digital news and entertainment venues for readers as circulation revenue has plunged over this period.

The New York Times dallied with a pay strategy in 2005, but pulled the plug by 2007 in its attempt to extract fees for access to TimesSelect, featuring its award-winning columnists such as Maureen Dowd and Frank Rich.

New York Times Chief Executive Janet Robinson called TimesSelect a "success" but said they ended the service in order to maximize its online readership.

The New York Times has spent the past year studying its proposed new metered model, finding ideas from telecom and cable companies, and even WeightWatchers, which charges users for in-depth diet tips.

"We know that we have the opportunity, particularly with the metered model, to manage this process," said Robinson.

Robinson did not detail plans for the strategy, but made clear there were distinctions between it and the Financial Times, from which it drew inspiration. The Pearson Plc-owned newspaper has charged people to read its news online since 2001.

Although the FT initially blocked all content from non-subscribers, the site switched to a metered model by 2007 that allowed people to read a set number of articles each month before asking for a fee.

Now digital revenue at the FT — which includes subscriptions and advertising — represents 20 percent of total revenue.

Speaking at the London arm of the Reuters Global Media Summit, FT Chief Executive John Ridding said digital subscriptions are steady and strong. These subscriptions have helped it collect valuable data from its customers.

"We can understand where traffic is coming from on a regional basis," Ridding said. "So that naturally increases the efficiency of the advertising."

This "efficiency" has enabled the FT to charge up to 10 times more for online ads tailored for its readers, Ridding said.

The more newspapers that start charging for online news, the better, Ridding said. "We’ve always believed that quality in journalism is worth paying for.

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