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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
Zürcher Zeitung, which did so last year.

In
Germany, Schwäbisches 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
Fröhlich, 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 Zürcher 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 Zürcher 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.”

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