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Description: 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.

Source: GlobeandMail .com

Date: April 3, 2012

About 300 newspapers across the United States, and a growing number of Canadian media companies, 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,”‘ says 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 to an unlimited number of story views a month. Nearly 20,000 readers have signed up.  Read Rest of Story

Questions for discussion:

  1. Will this business model work for the newspaper industry? Why? Or Why not?
  2. Do you see yourself paying for newspaper or magazine content online?

25 Responses to “Metered pay walls the new reality for newspapers”

  1. Paige Magnussen

    I think that distributing news papers on line is the news paper industry simply adapting to new technological advancements. Although these advancements have been great in most aspect of society it has cause allot of businesses to learn how to be adaptive. In today’s day and age hardly anything is hard copy anymore. Its so much easier to turn on your computer and have the daily news information at your finger tips. Not only that but you can access it anywhere, at any time of day, as opposed to waiting for your news paper to be delivered. At first when this service was free it was because news papers were still hoping to keep their subscriptions. However people were simply using this service as free and not keeping their delivered papers. The news papers are a service, and they are a business and they need to find a way to continue to make money. I think this was a smart business move; they are simply adapting to the new market changes and trends and are trying to stay innovative in their line of work. Beside i think it is cheaper to get the news paper online rather than having it delivered to your house, so who can complain.

  2. P

    I think this business model may either be very successful, or fail miserably. It is hard to tell how consumers will react to this model. I currently use online news sites to stay updated on what is going on in the world. These sites like Yahoo, MSN and MSNBC offer news stories, entertainment and trends information all for free. I also have a Yahoo app, which is also free that covers all the news stories for that particular day. I think this idea has already been thought of and companies like Yahoo and MSN have used it to their advantage. The advertising online is growing so rapidly and with free access to news sites, the traffic generated through them is substantial, posing as a huge opportunity for advertising companies. The news sites may not be generating that large of a marginal benefit from the free sites, but I’m sure it is more than compensated with the various types of advertisements accessed. With such substantial revenue generating from the advertising on the sites, companies could offer their services for a very small (or NO) fee-which will entice users to continue being loyal to the particular company.

  3. Kelsey Roberts

    I think that this business model is really all that is left for the Newspaper Industry. As we move towards a technological dependent era, less and less consumers are engaging in the traditional methods of communication, ie. purchasing newspaper. By providing their services online for a small fee, newspaper companies will be able to reach a much wider segment of society. People from Lethbridge can now subscribe to newspapers in London, Berlin, Tokyo and many more cities and interact with news on a more global level. I can’t see why this business model wouldn’t be successful. People are always going to want news, these days though, they just want in delivered in a timely and convenient manner, and introduction of online newspapers allows for just that.

  4. Nichelle

    I think this business model for the newspaper industry is currently fair game. There are continuous changes in technology and for many tech-savy individuals, reading the newspaper via their smartphone or tablet may be their top choice. Other individuals who rather not utilize a phone, computer, or tablet for anything for that matter, would probably opt for original newspapers. Also individuals who are not keen on using any technological related items would remain purchasing actual newspapers. Certain newspapers can also be worth a large amount of money down the road for certain collectors, which is another incentive for people to keep buying actual papers. For individuals who subscribe for online access to newspapers, they should have access to all stories for one common fee rather than selective access to particular stories, as the article mentioned. Personally, I already partake in both. I read the actual newspaper, which I have access to here in Lethbridge, but I pay a small subscription fee to have online access to my hometown newspaper. I don’t mind the small fee and frankly it is less than going out to buy each individual paper. The only down fall is that my online subscription is not compatible on my iphone so the only access I have to the paper is directly through a main computer.

  5. Laura

    This business model will likely be moderately successful for newspapers, and honestly it’s about the only option left to this dying industry. It appears to be a good move for these businesses as such online success has been seen by Netflix and similar companies, which generate a lot of income from online access content. Unfortunately, newspapers are a tricky item, because they can be found in so many places for free (hard copy) that many people are unlikely to jump on the pay online fee. I know personally, I would not pay to view these newspapers. Partly because the information is accessible in a number of areas, and partly because for me to pay my hard earned money, would require a good or service of above than average quality. Typically newspapers will have perhaps 3 articles of interest, and not much else. However, for the consumer who reads a paper back to front, I could absolutely see them paying for the convenience of reading on their smart phone or tablet computer. My one experience with a newspaper that blocked content in order to receive payment was the Wall Street Journal. I went to their website and proceeded to read for about a half hour, when suddenly I was informed that my online content was completely used. Not only did I not pay, I never returned to the website. Perhaps these businesses should consider alternatives for informing potential customers about their subscription requirements.

  6. Trevor Armstrong

    Do I see myself paying to read newspaper / magazine content online? No a chance. On the world wide web, there is so much free content (that is primarily supported by advertising), that I would have absolutely no incentive to subscribe to one company to receive my media fix. It likely goes without saying that I mainly use the internet to read sports news, which is easily available for free. Also, if a breaking story surfaces in world news, the information is posted everywhere – blogs, forums, free news feeds, etc – so a simple google search will allow me to find any information I desire on a hot topic.

    I really did not grow up reading news papers or magazines, so it is very possible that I do not associate a certain value with this medium, and thus would not be encouraged to subscribe to an online site – I have no loyalty to a magazine company, for example. As such, I do not personally think this push by news papers and magazines will be a successful venture.

  7. M

    It is tough to know whether or not this business model is going to work for the newspaper industry. So much free online news is available now; it may just be a case of people having to go somewhere else for their news. If the bigger newspaper companies like the Star Tribune start charging it may cause their customers to go get news somewhere else and could possibly open up opportunities for smaller free online news that is just running profits from advertising to gain customer base. Yahoo, msn and multiple other online sources offer free news and unless this idea of charging people is replicated throughout the whole industry I do not think people with financial constraints will be able and willing to pay this fee to get news when there are so many other free options available. Another unknown factor is how loyal the people actually are to where they get their news. Some people may have that full blown loyalty and would not switch newspaper companies regardless of cost and will pay this online fee to continue to enjoy their chosen newspaper. Either way I think the idea of easing the public into being charged for their news will be a huge part of whether the idea is accepted or not.

  8. Patrick

    I think that it is hard to say that if these business methods will or will not definitely work, but I believe that there is a good chance that this business model will work. I think that it will help capture more revenues for the newspaper industry. Also I think that this should probably be more profitable for the newspaper industry, than the previous method of printing the news. This method of selling subscriptions online allows the company to have fewer expenses than they would occur if they were to print the new on paper. The expenses would be things like paper, ink, paying commission to sales person, and everything else that is included in selling a hard copy newspaper. So, I believe that if this method work, and catches the wallets of the consumers, it would be very good and very profitable for the newspaper industry.
    As for me, I could possibly see my self-purchasing an online subscription. At the present time, I would not purchase one due to time restriction. But in the future I could see me getting one because I could see my self-living in some remote area and this is a method of accessing the news where hard paper copies are not delivered.

  9. Dennis Zhong

    This business methods seems to increase the newspaper organization’s revenue, because they create profits from news reader and advertisement. However, this business method is diffcult to compete with other free newspaper web. For example, if google search comes with a monthly charge, less people will use it. The advertisement will go to other online search company like Yahoo. In conclusion, this business method seems profitable, but it won’t work in nowaday.

  10. Lesley

    I think the business model with take off and work very well. Charging $1.99 a week for online access to an unlimited number of story views a month is very fair and costs less. I’m not sure i would take advantage of this, but it seems to be the only way for the newspaper industry to compete. Everything is online now. I think hard copies are a thing of the past. Everything and everyone is moving forward and being innovative with their products. If the newspapers need to make some revenue, online may be there only option left. Again, i’m not sure if i would partake in this feature. I would give it a try though.

  11. Lacey Dodds

    I do not think this business model will work for the newspaper industry specifically. This might just be my personal opinion but as a young person I do not have time to sit down and read the newspaper and sift through all the advertisements just to find a few good stories. If I am concerned about being aware of what is going on around the city, province, country, or world, I will just turn into the evening news—or record it and watch it whenever I want. The evening news is free delivers the most important daily news stories. I would not pay for a newspaper online unless it was a newspaper that did not contain mainstream stories. For example, if I was working in finance, I would probably pay for magazines and journals relating to finance, however I do would rather have access through them through an application so I could read them on my phone or tablet more easily. I have read magazines on an iPad through Newsstand and actually enjoy it more than the paper copy. This is due to the fact that you can click on pictures to make them bigger or display information on where the buy a product, etc. Overall, I think that just requiring a fee to access a newspaper online will not work, however, creating newspaper applications has more potential in my opinion.

  12. Billy Abesdris

    First off I will never pay for this and nor should you. Second, this business model is fundamentally flawed and has been doomed since the birth of the internet. We can now communicate information far faster, more dynamicaly(videos,tweet, blogs ect) targeted on whatever actually intrests us from a variety of sources, and all for free. There are dozens of excellent social news networks that also provide more objective approaches to news than many of the major newspaper companies. Even if they have -some- subscribers now, people will slowely gravitate twoards the free way which is really not any lower quality than the paid way, of getting news. If you used to read the sports section of the times, now you can google anything about any team or game and get more information than a newspaper company can possibly give you, and usually in a more raw and objective form. I like the business section but their are thousands of business sections on thousands of sites and at least a few are better than any newspaper business section. I think the cost that they spend will outweigh the revenue they generate and slowly but surely the newspaper industry, offline and online, will die.

  13. Timothy Anderson

    We are in a transition period in North America from hard-copy print to digital in almost all areas of publication including newspaper, books, magazines, and more. There is still a sense of nostalgia toward hard-copy because many of today’s population, at least anyone over the age of 20, grew up with books and newspapers and magazines that we help in our hands and flipped through. We developed routines around how we read the newspaper and these stick with many of us because it is human nature to avoid change as much as possible. We are creatures of habit and when something comes along that presents a change we will often react strongly.
    The newspaper and magazine industry must change because the new generation will want more and more of their entertainment, art, news, and books to be digitalized so that they can carry it around and access it from their mobile device anywhere in the world. This is future of our world and media companies must recognize the trend and get on board or else they will fall behind and be put out of business.
    However, there are still many who want the hard-copy print and would still pay money to have it. Like I said earlier, we are in a transition period and the companies that will operate in today’s world will need to find a middle ground so that they are not alienating the older generations by forcing them to enter the digital world when they don’t want to and not realizing that the new generation wants things done differently.
    I think people will pay for newspaper subscriptions because they are reliable. More and more people are realizing that the internet is mostly unreliable as a source for factual information. The truth is still important, although less so than a hundred years ago.

  14. Rachael Brown

    There is no denying the fact that physical “paper” newspaper subscriptions have dramatically decreased in the last 10 years. I remember people talking about how newspapers won’t exist soon because it is costing more to print them than they are making on customers buying them. More people have cancelled paper subscriptions than ever before because the newspapers are available for free online in return for creating increased traffic on the website for Web advertising. What more newspaper companies are realizing is that the increased traffic hasn’t been profitable enough to offer online versions of the newspaper for free. This realization has created a new online pay-for-use “metered” system, in which many different approaches are being tested. For example, some newspapers charge a set fee for unlimited viewing for a month, whereas others limit the number of page views, etc.

    In my opinion, it’s silly that newspapers offered an online version of their papers for free in the first place. When they noticed a significant decrease in paper subscriptions they should have started charging a fee to read newspapers online. I’m not surprised that they have to alter their approach in order to boost revenues. However, I can’t see myself ever paying for news related content online. I already pay for news channels on television, so regardless of how small the cost, I would never pay for online news. Ironically, my mom still subscribes to the Calgary Herald and has it delivered to her driveway each morning.

  15. Darren Fletcher

    This article sparks the mind and is showcasing a very drastic change in the way newspapers do business. I believe that many of the large well established players will have much success after the transition period ends. There is going to be a long period of losses before profits can be turned on a regular basis. The revenue will come as long as the web traffic is there but there will be a large delay so the big players that have large bank rolls can afford to gamble on the new fad but the small players(Lethbridge herald) might as well go back to hacking garbage on the street corner or you will be bankrupt before I can say “I will never pay anyone one dime for access to read current events on the internet”

  16. Ashley O'Donnell

    It’s tough to determine whether this new business model will succeed or not. It has the possibility to succeed if all media companies follow this model. However, people have the tendency to seek out free alternatives. Using computers, smart phones, and tablets people have the ability to watch news feed from news companies like Global, CNN, Fox, etc. However, the business model proposed seems to be quite feasible. First of all, they are charging a reasonable price. Obviously people are still wanting the news of the day and have paid for print media for years. By implementing a price of approximately $7.00 a month it is a good price. One can spend that much on a week of print media. Also, by giving people a sample of the stories that are available on the news, people are much more likely to purchase e-news compared to not giving any sample stories at all. People are not going to pay for something that they don’t know they are missing. If they have the chance to use it, get a taste of it they might decide they really like it and are willing to put up a few dollars to see the entire newspaper.

  17. michael holland

    I think this will be a somewhat effective way of stopping or slowing down the losses that newspaper companies are dealing with since the decline of hard copy newspapers. Ultimately the success or failure of this new system will be decided on how each company represents and markets the new system. There are still people who prefer a hard copy over digital, and that crowd will stay relatively stable for a few years, but there is a growing market of people looking for the news and media online, especially on social media sites. If the newspapers could tap into the social media networking trend in some significant manner, they could capture a huge audience which would revive their sales and numbers.

    Given the opportunity to receive some of my favorite newspapers or magazines online for a small fee I would gladly pay. I think part of the reason would be the convenience of having this media at my computer, rather than having it shipped to me, or me buying it at a store. Digital media has the advantage over traditional media because of that convenience. This is also an opportunity for these companies to offer customers specific sections or editions of their media, which would allow for a greater customization for the customers.

  18. Linli He

    I think the business model would be fairly and identically worked for the newspaper industry. It may be a way for the newspaper industry to adapt the new technology and the tendency of social life. Distributing newspapers on line is more convenience and faster for people to update on what is going on around themselves or in the world, no matter where they are. Currently, most people can look at the news through their phones, palmtops or computers; they can access the on-line news anywhere, anytime of day, instead of waiting for newspaper to be delivered. And quite frankly, I lost my newspaper once for some times; distributing newspapers on line also figures out the missing newspaper problem somehow. The traditional newspaper is limited the stories in words or photos format, yet the on-line news will have unlimited formats, words, photos, even videos. In addition, on-line news helps newspapers industry reduce the material costs because it can effectively eliminate the papers waste. Even though people need to pay some money for accessing the news sites, because the industry still want to keep their subscriptions. The newspaper industries bring more benefits for both themselves and their customers using on-line news websites; and they can also adapt the new market and new technology.

  19. Tuan Tran

    I think it is a fair deal that the newspaper industry is letting the consumer try out the free service. If you like it, subscribe and if you don’t, move alone to the next thing. I think with the popularity of the I-pad and the other entire portable electronic reading device, this trend will pick up and what the newspaper industry is doing is very smart by keeping up with the way the consumer are currently using or what is popular. Over all, I definitely can see that this business model will work for the newspaper industry. First of all, I think it is a great idea because any reading material that is electronic is good for the environment considering how much paper and energy that is being reduced or save. Yes, I can see myself paying for newspaper or magazine content online. However, most information is freely available from the internet so why pay unless I want it and it is not free.

  20. Joe thiongo

    i believe that this business model will work because of the way society is moving towards digital age. for me, i see physical newspapers as a nuisance because i have figure out to do with the paper after im done reading it. having a digital copy that i can access from any where without having to go outside my front door or to a store to buy is more convenient. a digital copy can be taken with me on my iphone, ipad, and compter. with time, i feel that people will see the benefits of having an electronic paper not only because of convince but also because of the environmental benefits.

  21. Lealand McCallum

    I think this is a good idea, because it appeals to peoples up and coming interests.. One being the fact that almost everyone has a computer/ internet. It just makes everything easier and cheaper. Which could also be portrayed as a bad thing due to the loss of jobs this will make.

    Myself personally no, I don’t see myself paying for news online.Anything you can pay for online there is a way to get it for free. So no I don’t see myself paying for online newspapers. But I don’t pay for regular newspapers either so maybe I’m not the best example…

  22. CAP

    I think what the newspaper businesses are doing is just a great way for them to make more money. It is a great business strategy. The whole point of having a business is to make money and if they have figured out a way to make more money then why wouldn’t they. I know that this can be a negative for the consumers or readers who do read their articles, but nothing is free. Like every other product or service, there is a charge. Newspapers have always had a small charge and making people pay online is pretty much the same thing. I am sure that people will still read their articles or stories even if there is a small charge. I’m sure that people can still find the same articles or stories in a different web site so they ofcourse have that agency to choose whether or not they will pay. I would probably pay if I absolutely had to read a certain article or story. The newspaper business should be able to charge because it is their time and effort that they are using to create those articles and stories. How else would they get paid?

  23. mp

    I think this is a great article because over the last 7-8 years i have been an avid sports article reader and i have noticed on a few of the major sports websites have their articles posted with just the first paragraph and maybe i specific quote to what the article pertains and in some cases i have bought subscriptions to certain writers in order to read them. The subscriptions are not very expensive and i can see the price going down as popularity increases. Also i believe a lot of business is not yet realized due to the restrictions of transferring money over the internet. Some people do not have credit cards or are sceptical with the safety of online money accounts but i think that as these systems become more secure and more popular online business models like this will thrive even more. The potential customer base in almost endless as more and more people have access to the internet. This is a great example of how traditional business models are evolving with the internet and using it in order to remain competitive in the market.

  24. Keith Grier

    With the internet, I think newpapers are a way of the past and are making there way out the door. News, nowadays, is free with most sites that i’ve experiences, Global has live streams in video you can watch if you want, youtube offers personal opinions on anything with no censorship what so ever. There are lots of cheaper way to advertise stuff you want to sell or buy and information is everywhere about most events and activities that people are interested in.
    Most if not all business have there own websites and you can find out about whatever discounts they offer directly and time valued events. In my opinion it’s only a matter of time until there will be no more newpapers another sign of the times, they are just to costly and have to much overhead no way they can compete with the internet. Another aspect of the internet is that you can personalize what you want to know about and don’t have to search though a paper to read about the subject you want, convenience,speed and avialability is what people want! I know I personal don’t buy the paper and never have as it is usually to bias anyway and censored by what ever agenda the paper hold true to their hearts. I do think that it will hold on for a few more years as the baby boomer generation still holds it near and dear to there morning rituals and thats changing fast aswell, so it will be only loyality that keeps it alive for now. To generation Y will be sure to utilize the newest technology and newpapers are old. If i want to know about something it’s at my fingertips and costs me the monthly fee i pay to shaw or telus and that’s a lot more feasible to me, and with e-mails and texting news about anything travels by internet or smartphone fast!

  25. Andrew D

    I do think that this model will be very effective for the news paper industry. Most people are now wanting to be able to read the news online as opposed to reaading the paper. This means that the paper companies will now be able to cut their costs on actually printing paper and be able to offer their news at a low price. Another positive of this low subscription proce is that it is afforbale to a lot of people. Being on the internet and with a low price, the newpaper will now be accessible to far more people and thir market will be expanded. Personally, I do not see myself ever paying for newpaper content, or to be honest even checking it out if it was free. I dont do a lot of reading, and espically not from major news sources. I find the new far too negative and constantly making people beleive that we live in a sick world of hate, suffering, and violence when that isnt really the case.

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