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Seeking profit online

Papers, including the Globe, try different approaches to pay websites

By Johnny Diaz
Globe Staff / September 13, 2011

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After years of offering their online content to consumers for free, newspapers are increasingly searching for ways to charge for stories and other information to offset reduced revenue from print advertising and circulation.

That represents an industrywide shift in thinking. Not long ago, most publishers believed it was more important to boost the number of visitors to their websites to attract more advertising. Now, that strategy is frequently blamed for accelerating the decline of print subscriptions and newsstand sales.

The number of US newspapers charging for some or all access to their online content has more than doubled to 50 this year compared with 2010, according to the Newspaper Association of America. But there is no consensus on how to attach cost to content. Across the United States, papers large and small are taking varying approaches, based on their products and markets. Industry officials say it’s too soon to say which type of fee method might work best to generate revenue.

Lou Ureneck, a journalism professor at Boston University, believes more readers are willing to accept the notion of paying for online news. “People are awash in bad information on the Internet and they will be willing to pay for quality branded information they trust,’’ he said.

Yesterday, The Boston Globe became the latest major newspaper to adopt a pay-for-use model with its new website, www.BostonGlobe.com. It’s also keeping www.Boston.com as a free site. For $3.99 a week, subscribers to www.BostonGlobe.com will get unlimited access to all stories, videos, and other news produced by Globe journalists. Print subscribers to the Globe won’t have to pay extra to use www.BostonGlobe.com.

“This is an evolutionary step in our business,’’ said Globe spokesman Robert Powers, who noted that research “showed a greater willingness on the part of readers to pay for digital news and information that they value.’’

Earlier this year, The New York Times - whose parent, The New York Times Co., also owns the Globe - started requiring readers to buy a subscription to read more than 20 stories a month on www.nytimes.com. The online fee is waived for print subscribers.

By the end of the second quarter, nytimes.com had signed up 224,000 digital subscribers, and an additional 100,000 sponsored by Ford Motor Co. as part of a promotion, according to Times Co. spokeswoman Eileen Murphy.

“The success of the digital subscription plan is exceeding our expectation on all fronts,’’ Murphy said.

Some papers putting pay restrictions on formerly free sites are also requiring their print subscribers to pay nominal fees for online access. For instance, The Dallas Morning News next month plans to begin charging print subscribers $1.85 a month to read much of the content on its website, www.dallasnews.com. It began charging for online-only subscriptions in March - $16.95 a month to view content from a home computer or a mobile device, or $9.99 for just one digital platform. As of next month, breaking news will still be free online, but about 70 percent of staff-written stories will require a subscription.

Last month, MediaNews adopted a similar plan for 23 small and medium-sized dailies it owns, including two in Massachusetts - the North Adams Transcript and Sentinel & Enterprise in Fitchburg - and two in Vermont.

Officials at the Dow Jones Local Media Group, which includes The Standard-Times of New Bedford (www.southcoasttoday.com), the Cape Cod Times (www.capecodonline.com), and five other papers, said they have been pleased with the preliminary results of their system - which requires users to pay after reading a limited number of stories each month - said Kurt Lozier, senior vice president of digital media and product management for the group of papers.

No matter how it’s done, the goal is the same everywhere: generate more cash to offset years of revenue declines and cutbacks, including steep declines in newspaper staffs.

It’s an obvious direction to take, Ureneck said.

“They can either stick with the advertising model and offer the product free - in which case they will continue to be forced to reduce the size of their news staff,’’ he said, “or they can begin to charge the news product online and develop a significant new source of revenue. It strikes me that charging online in order to get the revenue to keep a strong news staff is the better way to go.’’

But convincing people to subscribe to a news website could be a hard sell, particularly for big-city dailies such as the Globe, said Joshua Benton, director of the Nieman Journalism Lab at Harvard University.

“They’re in markets that are big enough to have a lot of news alternatives,’’ Benton said. “Because the default online is that information is free, you need to have a really good argument to get someone to pay.’’

And there are plenty of free options for those who don’t want to subscribe - Huffington Post, Google News, Politico, and others draw millions of readers daily to their sites.

Analysts say newspaper companies are taking a cue from the entertainment industry, which has over time convinced consumers that it’s reasonable to pay for some online content that used to be free. They point to the success of television hub www.Hulu.com, or Apple’s iTunes store, which has managed to persuade a substantial segment of consumers to pay for music instead of illegally downloading songs from file-sharing sites free of charge.

Pam Horan, president of the Online Publishers Association, a trade group based in New York, said she believes many readers think it reasonable to attach a price to quality. They “want to get the best content that they can get,’’ said Horan, who cited the early success of online paid-news pioneer The Wall Street Journal.

And in a way that many papers did not anticipate, paid online sites are propping up print circulations. Newspapers are finding that some people are buying print subscriptions because they come with access to online content. For instance, The New York Times reported “an uptick’’ in new home delivery subscriptions since the pay system was introduced.

At The Dallas Morning News, publisher Jim Moroney said online traffic is about 20 percent below the 4.5 million unique monthly visitors www.dallasnews.com attracted when it was free, but at the same time the paper’s print circulation on Sunday has steadied at about 340,000 after many months of eroding numbers. Moroney said that gives him reason to be optimistic about the long-term prospects of a paid website.

“We are very pleased where we are today,’’ he said.

The Worcester Telegram & Gazette - also owned by the Times Co. - said its year-old pay model - $14.95 a month after 10 free articles, or $1 per day - is helping the paper to maintain its print subscription base, said publisher Bruce Gaultney. That’s because a paid print subscription also buys readers unlimited access to www.telegram.com, he said. About 20,000 people have signed up for the website, according to Gaultney, a number that includes print subscribers who registered online, online-only subscribers, and day-pass users.

“We do believe it has helped encourage people to keep the paper,’’ he said.

Johnny Diaz can be reached at jodiaz@globe.com.