Papers Worldwide Embrace Web Subscriptions

SERRAVAL, France?Newspapers, once reluctant to try to charge readers for access to their Web sites, have begun doing so in droves.

Across many of the developed economies of America, Europe and Asia, so-called pay walls are proliferating as publishers struggle to make up for dwindling revenue on their print products. Online advertising, once seen as the great hope for the future, has begun leveling off, which is accelerating the push for new Internet business models.

''Why now?'' said Douglas McCabe, an analyst at Enders Analysis in London. ''The outlook for digital advertising for all but the very largest sites looks increasingly challenging. Therefore, it is critical that news services experiment with subscription models.''

The trend has taken in some longtime holdouts, like The Washington Post, which said in March that it would start charging online readers this summer. Elsewhere in the United States, The San Francisco Chronicle also recently announced plans to start digital subscriptions, and the total number of American newspapers with pay walls has climbed to more than 300.

In Europe, the recent conversion has been even more striking. Last week, the Telegraph Media Group, publisher of the biggest broadsheet in Britain, said it would start charging British domestic readers for access, having previously introduced a pay wall for its international audience. The biggest tabloid in Britain, The Sun, also confirmed plans to erect a pay wall.

Last month in Switzerland, Tages-Anzeiger, the largest-circulation quality daily in the German-speaking part of the country, announced plans to switch to a paid online model, joining its main rival, Neue Zuercher Zeitung, which did so last year.

In Germany, Schwaebisches Tagblatt became the 35th newspaper to introduce a pay wall. Among the leading national dailies, Die Welt started charging online readers recently, and Bild plans to do so this summer. Other German publishers have said they are weighing the move.

''There's hardly anyone left who is resisting the trend,'' said Tobias Froehlich, a spokesman for Axel Springer, which publishes both papers.

In Asia, too, pay walls are popping up, with publications like the Asahi Shimbun and the Nihon Keizai Shimbun in Japan and The Straits Times of Singapore embracing digital payment plans.

The new round of pay wall adoption could test some long-held assumptions about online fees. In Britain, for example, the conventional wisdom used to be that it would be impossible for newspapers to persuade readers to pay for general news online; while one British newspaper, The Financial Times, was a pay wall pioneer, some analysts attributed its success to its specialized business content and the fact that many of its customers pay for their subscriptions via corporate expense accounts.

Certain particularities of the British market make the transition harder for general newspapers in Britain than elsewhere. One is a high rate of newsstand sales rather than home delivery, which predominates in the United States and Germany. It is easier to market new services, like paid online access, to existing subscribers than to anonymous customers at a newsstand.

British tabloids have also had to confront questions about their credibility since the phone-hacking scandal, which resulted in the shutdown of The News of the World, a sibling to The Sun in News Corporation's stable.

The popularity of the BBC's news Web site, which is required to be free in Britain, is a further hurdle for rival online publishers. Yet after the latest round of pay wall adoption, only two prominent national British dailies, The Guardian and The Daily Mail, will be available free on the Web.

Another notion that is about to be put to the test is the industry belief that tabloid newspapers, specializing in celebrity gossip and other news with a short shelf life and aimed at lower-income readers than broadsheets, might have an especially hard time persuading readers to pay for digital editions. Now the two highest-circulation newspapers in Europe, Bild?a tabloid in content despite its broadsheet format?and The Sun, are about to find out.

Perhaps in an acknowledgment that tabloid news will prove to be a tough sell, both papers plan to supplement their online offerings with a new kind of newspaper content: soccer video clips. Both The Sun and Bild recently acquired online rights to show highlights from the top-flight soccer leagues in their respective countries, the Premier League in Britain and the Bundesliga in Germany.

Bild plans to continue offering general news free; exclusive content, including the soccer clips, will require payment. The Sun says it has not yet decided on a charging mechanism.

Among higher-brow publications, the favored approach to digital payment seems to be the so-called metered model, under which casual visitors to a newspaper Web site are not charged, while those who pass a certain threshold?say, 10 articles a month?are required to pay. This model, pioneered by The Financial Times and later adopted by The New York Times, lets online papers maintain a broad audience, necessary to sell digital advertising, while obtaining new revenue from the most loyal readers.

The New York Times turned on its metered system two years ago, and says it had attracted about 640,000 paying customers to its digital versions by the end of last year. Elsewhere, papers like Die Welt and Neue Zuercher Zeitung have also taken the metered approach, and The Telegraph said it planned to do so, too. In Hong Kong, The South China Morning Post, which for years operated a so-called hard pay wall?requiring payment for all access?switched last fall to the metered approach.

Big numbers have not always followed immediately. The Neue Zuercher Zeitung in Zurich, for example, said it now had 13,000 digital subscribers; but even before it put up its pay wall in October, it had 12,000 customers for its ''e-paper'' edition?a paid-for digital replica of the paper.

''I'm glad we did it,'' said Peter Hogenkamp, head of digital media at the NZZ Media Group, the paper's publisher. ''I have no bad feelings about it. But everyone in the business is overestimating pay wall revenues."

Source: http://www.cnbc.com/id/100605359

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