Newspapers hit the paywall

Newspapers hit the paywall

In the digital age, the printed word is evolving

By Timothy Walker

The "New York Times" on an iPad.

The daily newspaper has been a fixture of American life for over 300 years now – the first newspaper, the “Boston News-Letter,” published its first issue on April 24, 1704. Many of us grew up watching our parents read the paper at the breakfast table on Sunday mornings while we looked at the comics section. Some of us then moved on to reading it ourselves, perhaps subscribing to it, even occasionally delivering it for extra cash. Newspapers were ubiquitous: headlines, coupons, the weather, movie listings, Letters to the Editor, “Dear Abby.” There was even a time in the not-so-distant past when medium-sized cities like Dayton often had two or more daily newspapers (the “Journal Herald,” anyone?) competing for subscribers and advertisers.

But the iPad is here now and times have changed.

It’s an old story that the leap into this new digital age has not been a comfortable one for the newspaper industry. While nearly all newspapers now have websites featuring online editions of their daily publications, many of those old grey eminences are steadily losing money and have experienced difficulty establishing their value to a younger readership. Circulation and advertising revenues have dropped as more and more potential subscribers get their news either from online sources, through Twitter and other social networks, or by watching any one of several 24-hour news channels.

For example, in a story that has become all too common in recent years, the 174-year-old “Ann Arbor News” printed its last edition in July 2009. Hit hard by the recession, declining circulation and the migration of readers to digital media, the paper was replaced by AnnArbor.com, a free website that planned to publish print editions only on Thursdays and Sundays.

So how do daily newspapers, trapped in a business model that seems doomed to failure in a growing online economy, make more money?

For some, the answer is by encouraging readers to pay to read their web-based content. Enter the paywall, which blocks access to a webpage with a screen requiring payment. “The Financial Times” was the first newspaper to use one, starting the trend by charging subscribers for access to stories in 2002.
Many daily newspapers have tried to use paywalls since then, with varying degrees of success.

With nearly one million loyal paying readers, the “Wall Street Journal” has more online subscribers than any other newspaper. Anyone with a browser can go to WSJ.com for free and read the headlines, but many of the full articles are accessible only to subscribers of the newspaper’s online edition. Click on a story headline on the newspaper’s website, and chances are you’ll be able to read only the first few lines of the story before being asked to enter your subscriber password so that you can finish the article. The “Wall Street Journal” earns nearly $60 million per year from subscribers to its digital edition.

The “New York Times” has announced it will be erecting a modified paywall at some point in 2011. A visitor to NYTimes.com will be able to access only a limited number of articles for free each month – in order to view more, the reader will have to pay a flat fee for unlimited access, probably around $10 per month. Subscribers to the free newspaper, even those who only take the mammoth Sunday edition, will receive full access to the site without any additional charge. Executives of the “New York Times” company said that they “wanted to create a system that would have little effect on the millions of occasional visitors to the site,” while still trying to make money off of the loyalty of more devoted readers.

What they were trying to do was create a business model that would avoid the disastrous paywall experiment of the “Times of London.” In June 2010, the “Times of London” and the “Sunday Times” erected a paywall which prevented readers from accessing any material at all unless they were subscribers. As anyone might guess, online readership nearly vanished, with a 62% drop in online unique visitors and a whopping 90% drop in unique page views, from 41 million in May 2010 to four million in September 2010.

“Newsday” had a similar experience when they erected their own $5 per week paywall in late 2010. Three months into the experiment, after spending nearly $4 million to redesign the online edition and add the paywall, “Newsday” found itself with a grand total of 35 subscribers.

The jury is obviously still out regarding the success of paywalls in the newspaper industry. In his book “Free: The Future of a Radical Price,” “Wired” Editor Chris Anderson echoes Stewart Brand’s assertion that “information wants to be free” and claims that all internet users below a certain age expect – perhaps demand – to receive their information for free. The trick for the daily newspapers who want to survive in the digital world may well be convincing these younger readers, who still want access to information about their changing times, that they may well be forced to pay for it.

Reach DCP freelance writer Timothy Walker at timwalker@daytoncitypaper.com.

Tim Walker, 46, was raised by wolves in W.V. after being abandoned by his family. Currently writing two mystery novels, he loves books, offbeat films, Miles Davis and pizza. He has broken his back twice, works as a DJ, loves his wife & kids and rarely howls at the moon these days, unless it's full.

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