This is a joint byline for the Ryerson Review of Journalism. All content is produced by students in their final year of the graduate or undergraduate program at the Ryerson School of Journalism. Short Change
More and more papers charge for online content, but is that really where the money is?
There’s now a fee for what once was free. It wasn’t that long ago that you could sit down at your computer, type in the URL of your favourite Canadian daily, and get all your news for free. Try that nowadays and there’s a good chance you’ll be asked to enter your credit card number if you want to read anything other than the headlines and a few select articles. Charging for online content, once a trend, is now the industry standard.
Initially, charges had a chilling impact on online traffic numbers. But as free news became harder to find, more and more readers have warmed up to the idea of paying a little extra. Now, page hits are on the rise again. Profit remains uncertain, as cyber-subscriber numbers are still low, but this won’t discredit the concept of charging for online news. Rather, media companies will continue to try and pick readers’ pockets, as their subscription-forms seek to extract information. Eventually, the gathered demographic and psychographic information will attract companies and bring in advertising revenue.
In 2004, CanWest Global Communications Corp., chasing revenue, started charging online readers of theNational Post and the other 10 major metropolitan newspapers it owns. The company introduced a two-tier system to its websites, making most of their online content exclusive to paying viewers. Now, in order to get the full story online at the Post, The Vancouver Sun, The Ottawa Citizen, and The Montreal Gazette, to name a few prominent CanWest dailies, you must first pay the toll. Subscription fees at the Post run readers $10 a month (plus tax), or $4.99 for print-version subscribers. Other members of the CanWest family charge similar amounts. For non-paying viewers, only a couple of stories per section remain free. The good news, says Tim Doyle, the editor of CanWest’s online news and information service (Canada.com), is that subscribers gain access to a PDF replica of the paper, which is almost identical to the print copy. They also get free access to the seven-day archive. So far, the results have been mixed. “Feedback has varied,” says Doyle, who would not disclose how much money, if any, the site has made. “Not everyone welcomes a change.”
This new potential source of revenue caught the interest of CanWest’s competitors. In September 2004, thePost’s chief rival, The Globe and Mail, added a twist, creating a three-tier system, whereby readers can choose to register, subscribe, or neither. Choose the last option and suffer restricted surfing; choose the first and gain access to 80 per cent of the site for free. Or take the middle option – for $16 a month, subscribe and become an “Insider” member. Benefits include total access and “premium features,” such as columns, crosswords, horoscopes, and “enhanced archive access” to U.S. business articles from The Wall Street Journal online.
But exclusive perks and a catchy name haven’t quite convinced Globe readers to whip out the credit card. Online-editor Angus Frame says he has received more negative responses than positive, but the online edition overall has not suffered a significant drop in readership. “Traffic dipped in September and October, but by November, we were back to full strength,” he says. As for financial benefits, Frame says it’s early but a trickle of revenue is flowing from new subscribers.
While things look tentative revenue-wise for the Globe online, Torstar-owned Grand River Valley Newspapers provides another, perhaps clearer image of the future. This collection of southern-Ontario dailies launched a paid-access system in 2003, beginning that February with The Kitchener-Waterloo Record. GRVN followed the lead of the Winnipeg Free Press, which had became the first major Canadian daily to go from free to fee-based online news in 2002. The Hamilton Spectator, another of Torstar’s dailies, quickly followed suit in June 2003.
Craig Campbell, the systems-and-administration manager for the Record, says the online subscription program has proved to be successful. It’s not just a trend, he says, but the future of online media. Thirty-two per cent of The Record’s subscribers registered for the online database – almost twice as much as anticipated. When asked how much the daily has profited, Campbell says, “Nothing.”
Turns out the subscription-based website was never intended as a source of revenue. All proceeds collected from paying viewers go to GRVN’s “Newspapers in Education Program,” which delivers free papers to schools in the region. In December alone, 30,000 papers were sent out. So how does GRVN benefit from putting a price on the electronic edition? “It’s all about protecting investment,” says Campbell. “We’re not giving away anything for free – we’re protecting the integrity of the product.”
Fair enough, but maybe there’s a way to both protect the product and make money. In the United States, subscription-based online news has existed for years. In September 1996, The Wall Street Journal became the first North American paper to use the concept – and make a profit, unlike the other 21 American dailies that, by that time, were also charging for online content. By 2003, the Journal had 664,000 paying viewers, the highest in the country.
The reason for the difference was that the Journal’s paper copy had a readership of 1.9 million, a luxury most major dailies don’t have. Even then, less than a third of the Journal’s subscribers forked out the extra amount for the website.
Maybe having learned a thing or two from the Journal’s experience, The New York Times steered away from fee-for-content and introduced its own online model. To gain exclusive access to the Times’ electronic version, readers fill out a simple registration form to obtain a login name and password, a free process. The paper uses the information recorded on the registration form – gender, income, and profession – to attract advertisers.
The Toronto Star uses a similar model. It introduced the registration process to its site in the fall of 2004. Sharon Dean, the director of electronic publishing, says the change has been positive. “The move is part of our long-term strategy,” she says. “It allows us to improve the value of our site for both our registered members and our advertisers, while keeping access to our content free.”
While the Star has debated following the subscription trend, Dean says that as of now, there are no plans to do so. The only disadvantage has been a slight decline in visitors to the site, although the number is fewer than management had anticipated, and has been offset by the increase in ad revenue. “One of our top priorities,” she says, “will be the opportunity to extend the reach and frequency of the Star brand and to broaden the audience for our advertisers’ messages.”
It may cost the Star a few page hits, but for readers, the price is right.
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