More Publishers Try All-Paid Web Model

By: Carl Sullivan While no U.S. newspaper is yet making a fortune by charging for access to its Web site, more publishers abandoned the all-free model last year. E&P found at least 21 daily newspapers now restrict most of their online editorial content to paying customers. Many of these papers allow print subscribers to access their Web sites for free, but a few levy extra Web charges on top of their home-delivery bills.

It should be noted that many newspaper sites that have remained largely free have nonetheless increased their paid-content revenue -- through archives, premium and niche content, and other special services. Many publishers are espousing a free/paid hybrid model where the bulk of their sites is free to all (increasingly with the caveat that users provide personal info in exchange for the free ride), while customers must pay for crosswords, games, and so forth. Some papers, such as Freedom Communications Inc.'s East Valley Tribune in Mesa, Ariz., offer limited free Web sites with about 20% of today's paper gratis, but charge for access to their complete content, in the form of electronic editions that replicate their print products. Others, such as The Boston Globe and the Star Tribune in Minneapolis, offer all of today's stories for free, but also sell electronic editions. "We see it as an alternative delivery method for the print paper," says Online Content Director Ginny Greene of The Gazette in Colorado Springs, Colo.

While these experiments continue, some analysts insist that the all-paid model is a bad idea for newspapers. "In most cases, online subscriptions are going nowhere fast," says Peter Krasilovsky, vice president of Borrell Associates Inc., Portsmouth, Va. His group has found that, on average, an equivalent of 1.2% of the print-circulation base will pay for Web access, while 16.6% of print subscribers will register when required to do so. "This has been the case since we began tracking paid/registration ratios almost two years ago," Krasilovsky says. "If you believe that traditional circulation/advertising [revenue] ratios will continue to be roughly 1-to-3, our strong feeling is that you won't want to jeopardize the larger number by putting your stuff behind a firewall."

But some publishers see it differently. In October, The Columbus (Ohio) Dispatch became the largest newspaper after The Wall Street Journal to convert to a fully paid site. "We strongly believe that no publisher can continue to give away content for free and that our product is highly valuable," says Pam Coffman, electronic-publishing editor of the Dispatch Printing Co. To emphasize that value proposition, Dispatch subscribers get free access to Dispatch.com, while nonsubscribers must pay $4.95 a month. So far, 79,000 print subscribers have registered to use the Web site. With 31% of print readers registering on the site, Dispatch.com is way ahead of the Borrell statistic. Ohio State University's championship football season "was a big factor in getting [print] subscribers to sign up for the site," Coffman says.

Coffman reports Dispatch.com's traffic dropped about a third from where it was pre-registration. "We expected [it], and we're not that worried about it," she explains, pointing out that the site never had many national advertisers, which might be more concerned about high traffic. She says one local advertiser pulled out after registration was implemented but later came back.

Advertisers may not have minded, but many readers did. "You have to have a pretty thick skin for about a month," says Coffman, referring to the nonsubscribers who were angry about being shut out. But the Dispatch and other newspapers say they can take the heat, preferring to provide their content and services to loyal paying customers.

As the Freedom group tries different models, the bulk of its newspaper sites will go behind the paid wall, says Ginger Neal, vice president of business development for its Orange County Information unit. "But we also have a community responsibility to provide breaking news" for free. In the next month or so, Freedom's flagship, The Orange County Register of Santa Ana, Calif., will roll out some form of paid/free hybrid, Neal says. "Like everyone else, we're trying to discover the right way to do this."