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January 8th, 2013

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As newspapers watched more and more of their subscribers opt out of the printed version in favour of free content online, publishers hoped that the lost revenue would be made up via an explosion of online ads. But despite the long-running promise of media watchers that digital advertising revenues would, along with lower production costs, make online newspapers a success, the number of ads on newspaper websites is actually falling. Editors and publishers are now realising they can no longer give the news away online.

“We are admitting that it is no longer a viable option not to take payment for online content,” Lisbeth Knudsen, editor of Berlingske and head of Berlingske Media, told Politiken newspaper.

Starting in the spring, the Berlingske publishing group will roll out a payment model for its websites b.dk and business.dk.

The trend follows that of newspapers worldwide.

“In the US, over 30 percent of newspaper websites are now pay sites,” Knudsen said. “We have reached the point where we can no longer pay our staff and maintain quality without complementing our print revenue with digital resources.”

Other Danish newspapers – Jyllands-Posten, Kristeligt Dagblad, Information and Politiken – have either already put some sort of pay-to-read policy in place or have one on the way.

"It has become apparent to every newspaper over the past few years that the idea of financing quality journalism via ad revenue just does not hold water," said Politiken editor Bo Lidegaard.

Critics argue that Politiken and others could make more from advertising if they didn't have a paywall, because far more readers would continue to reach for their smart phones, computers and tablets to enjoy the free content.

But Lidegaard argues that the current situation simply cannot finance quality content.

"It only allows for free newspapers and the kind of journalism they offer,” he said. “We want to be something different, and that forces us and every other newspaper in the world to sell online content in the same way that we sell print. "

Berlingske and Politiken are adopting the New York Times model for charging readers for using online content, a somewhat porous paywall allowing readers a limited number of articles free per month. Once the limit is reached, the metre starts running.

The practise has proven to be an important source of income to the New York Times, even if only a small percentage of its millions of web visitors have actually paid to read an article.

Since introducing the plan in March 2011, nearly 566,000 digital subscribers have signed up for the Times or its sister publication, the International Herald Tribune.

The Times’ digital subscriptions amounted to about $92 million in revenue in 2012, about 12 percent of the paper’s total $768 million in subscription revenue for the year. More importantly, the addition of digital subscription revenue – along with a boost in the cost of the print edition – will make 2012 the first year the Times has actually earned more money from circulation than from advertising.

There are several other payment models being tried in the Danish market. The only common thread is that no one is sure if any of them will work.The problem with any payment model is that the daily news will still be available for free in any number of places.

Broadcasters like DR and TV2 have no intention of charging to use their sites, and Ekstra Bladet tabloid – whose website actually earns money – said that its web content will continue to be free.

Professor Stig Hjardvard of the University of Copenhagen's media and communications department said that broadcasters continuing to give away content could doom the newspapers' paywall schemes.

"The papers are forced to do something. If I knew which answer was best, I would be a very wealthy consultant," he told The Copenhagen Post. "But it is a solution that demands that everyone go along."

Hjardvard said that broadcast websites remaining free after newspapers begin charging is a controversial issue that may have to eventually be addressed by parliament.

"It speaks to how the state funds both newspapers and television outlets," he said.

Hjardvard said that an interesting trend that appeared to be developing was that people seemed more willing to pay for news that was delivered via a smartphone or tablet than they were for content on their PC.

"People have become accustomed to getting information for free through their computers, but the handheld devices are relatively new," he said.

Jyllands-Posten is attempting to attract readers by offering daily and breaking news for free, while analysis, background articles and the paper’s deeper, more specialised journalism is only accessible to those with a digital subscription.

“The important thing is that it is still possible to create unique journalism,” said Jens Nicolaisen, the digital director of Jyllands-Posten. “We believe that this model will help stabilise the print version of the newspaper. But we also know that we can no longer base ourselves on a print model alone, so it makes sense to create a subscription form that cuts across media types.” 

Publisher Berlingske Lokalaviser, which handles seven local newspapers including Århus Stiftstidende and Viborg Stifts Folkeblad, realised in November that it had a virtual lock on local news in mid-Jutland and decided to put all of its online content behind a paywall. No free articles, no teasers, absolutely zero access unless paid for. The practise has cost the company about half of its web traffic. At the same time, about 1,000 new subscribers have signed up.

Editor Dorothy Carlsen from Berlingske Lokalaviser said that people are more willing to pay for local news content that they cannot get elsewhere and can design to suit their specific needs.

“I live in Bjerringbro and like to have news about the local political scene, the schools and local sports,” Carlsen told Politiken. “But I also want business news available on another local website under our umbrella, and being able to customise my own newspaper gives it a completely different value.”

Not every local news outlet is going the way of Berlingske Lokalaviser. Palle Høj, the editor-in-chief of Frederiksborg Amt Avis, which covers northern Zealand, said that his paper “has no intention” of adding a paywall.

“That also includes the website www.sn.dk, which is run by Sjællandske Medier and includes the Frederiksborg Amts Avis, DAGBLADET, Sjællandske and a lot of hyper-local sites for free weekly newspapers. There will be no paywalls on any of them,” said Høj.

The Copenhagen Post continues to offer its web content to readers free of charge.