Pay walls never may come at some papers

The resolve to charge for most interactive content is dissolving at some newspapers, potentially thwarting the plans of other publishers who still hope to erect pay walls on their sites.

Despite determined statements by several publishers earlier this year that they intended to make consumers pay for the valuable content newspapers have given away for more than a decade, the managers of some newspapers have come to realize that they can’t afford to lose the traffic that pay walls almost certainly would turn away.

So, the executives are scrapping plans to charge for most, if any, of their content. The latest thinking – which, of course, is far from unanimous across the industry – is illustrated in two fresh data points:

:: Goli Sheikholeslami, the general manager of WashingtonPost.Com, told a conference at the Shorenstein Center at Harvard last week that “not enough people are willing to pay” to make the sale of online content a viable business. “If could get 5 million people to pay me to visit my site each month, I would be done,” she said. But Sheikholeslami said she has no hope of doing so.

:: Although Hearst Corp. attracted headlines in February when its top newspaper executive said he aimed to start charging for content, Mark Adkins, the president of the San Francisco Chronicle, told me last week that “we believe in being a free website” but plan to develop supplementary “premium content we will charge for.”

The Chronicle plan sounds a lot like the decision of the Minneapolis Star-Tribune to continue to run a free site while charging $19.95 a year for access to premium coverage of the Minnesota Vikings. The Viking package emulates the long-running Packer Insider at the Milwaukee Journal Sentinel, which grosses more than $1 million a year.

The hybrid free-plus-premium approach, which seems to be where the industry is heading in several large markets, may be one of the reasons the Gannett Co. recently urged its editors to get their “swagger back” by stepping up the production of unique and differentiated content.

Not all publishers are backing off pay walls.

Newsday recently began charging a stiff $5 per week for access to all but the first couple paragraphs of each story on its website. But Newsday is giving free web access to both its print subscribers and the Long Island residents who connect to the Internet via the broadband service sold by its parent, Cablevision Systems. Between the newspaper and the cable service, Newsday potentially will be available for free in three-quarters of the households in its market, an advantage not available to most publishers.

Pay walls were erected this summer in places like Harlingen, TX, and Schenectady, NY, suggesting that it may be possible for publishers in isolated markets to execute a strategy that retards the shrinkage of their print readership until the last generation of print-oriented readers dies off. This defensive, backwards-looking approach hardly seems to be a recipe for future success in the interactive marketplace.

The decision not to charge for most content at papers like the Washington Post and the San Francisco Chronicle means that competing publications will have to think twice about pursuing aggressive pay strategies.

If the Washington Post continues to freely give away its political and international coverage, can the New York Times get away with charging for essentially the same content? If the Chronicle gives away its regional coverage, would competing papers in Oakland, Santa Rosa and San Jose dare to go the other way?

Apart from such competitive considerations, a growing number of newspapers are coming around to facing the harsh reality of the marketplace. This, more than anything else, may be influencing their reluctance to press ahead with aggressive pay strategies.

Once upon a time, publishers coulda woulda shoulda charged for their content. But the web today is awash in sites offering free access to world news, national news, sports news, business news, entertainment news and, increasingly, local news produced by a growing host of start-ups. Further, an entire generation of those under the age of 30 has been conditioned to expect the news to be free.

While publishers ought be able to collect premium prices for unique and valuable content, most of them have whacked their news organizations to such a point that they produce very little original, premium product. Without an investment in creating valuable content – which most publishers can’t comfortably fund – most efforts to charge for content will shrink audiences and advertising revenues at a time publishers can least afford to lose them.

Nearly half of the newspaper publishers in the United States stated in a recent poll that they are not convinced they should try to charge for content. A lack of resolve among not just newspapers but also publishers across many media almost certainly would undercut the efforts of the organizations that did attempt to implement a pay strategy.

To be sure, some publishers continue to be intrigued by pay walls.

Steven Brill, the chief executive of Journalism Online, said in an email on Friday that inquires are brisk from publishers interested in evaluating the pay service he plans to deploy.

“You are misinformed about folks being less inclined” to charge for content, said Brill, who intends to begin beta testing his pay system within eight weeks at selected publications. “We are fielding calls from, and doing meetings with, publishers (blogs, online-only websites, newspapers, magazines, for-profits and non-profits) every day from here and overseas.”

The question they ask, said Brill, is not “if” but “how” to charge for content.

But the biggest question for Brill is how many of his prospects actually will elect to move forward. Given the challenges described above, wanting to charge for content may be a long way from actually being brave enough to do so.