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 online for free, a growing number of newspapers around the country have launched so-called metered pay walls, which give readers a few free stories before requiring them to sign up for a digital subscription. About 300 newspapers 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 after they have looked at 20 stories for free. If a reader pays for the Sunday newspaper in print, however, online access can be as little as 30 cents a week. 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 canceled 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 nation's 1,350 daily newspapers charge for online access so far, but industry executives are increasingly optimistic pay walls can boost digital revenue. 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.
As publishers and media executives gather in Washington this week at the Newspaper Association of America's annual meeting, how to increase digital revenue is front and center.
Gannett, publisher of USA Today, said in February that it would expand its online pay walls from six test markets to all 80 of its small-market newspapers by the end of the year.