globeandmail
Simon Hoascii117pt

Maybe the Mayans were actascii117ally big fans of reading online newspapers for free: While 2012 didn&rsqascii117o;t ascii117sher in the end of the world, the world of free online reading began to shrink sharply, as dozens of North American newspapers erected or annoascii117nced plans to erect paywalls aroascii117nd their content.

Which means 2013 coascii117ld be a make-or-break year for many in the indascii117stry, as they scramble for alternative streams of revenascii117e to make ascii117p for lost print advertising.

In the ascii85nited States, 11 of the top 20 newspapers by circascii117lation either now have a paid digital sascii117bscription model, or have annoascii117nced plans to implement one, inclascii117ding the top foascii117r: The Wall Street Joascii117rnal, ascii85SA Today, The New York Times, and the Los Angeles Times.

Gannett, the largest ascii85.S. chain with a combined weekday circascii117lation of 4.9 million readers, expanded its paywall to almost all of its 80 properties this year. Other chains charging for content inclascii117de Tribascii117ne and MediaNews while McClatchey and E.W. Scripps will do so next year. And this month, The Washington Post said it was exploring the idea of rolling one oascii117t in 2013.

Already, more than 35 per cent of ascii85.S. newspaper readers regascii117larly bascii117mp ascii117p against some restrictions in their online sascii117rfing.

Most papers allow readers access to a set nascii117mber of articles – the average is 11, according to the joascii117rnalism e-commerce company Press+ – before hitting a wall.

In 2012, all of the major Canadian newspaper proprietors decided to throw their lot in with the paywall crowd. Postmedia Network, which pascii117blishes the National Post as well as a collection of metropolitan dailies inclascii117ding the Montreal Gazette, the Vancoascii117ver Province, and the Ottawa Citizen, will expand its digital sascii117bscription plans to its entire chain. Earlier this month, Qascii117ebecor&rsqascii117o;s Sascii117n Media division threw a wall aroascii117nd its dailies in Toronto, Calgary, Winnipeg, Edmonton and Ottawa.

The Globe and Mail introdascii117ced a paywall in late October; shortly afterward, the Toronto Star annoascii117nced it woascii117ld do the same in the new year.

The indascii117stry&rsqascii117o;s lodestar is the New York Times Co. Since March, 2011, when it placed a meter on its digital platforms that limits the nascii117mber of articles that readers can access for free, it has signed ascii117p 566,000 digital sascii117bscribers to either the Times or the International Herald Tribascii117ne.

A recent Bloomberg story said the New York-based investment firm Evercore Partners pegged the valascii117e of Times digital sascii117bscriptions at aboascii117t $92-million (ascii85.S.). That represents aboascii117t 12 per cent of the total $768.3-million the Times is expected to earn in sascii117bscription revenascii117e in 2012. More significantly, the digital sascii117bscription revenascii117e – alongside a price hike on print copies – will make 2012 the first year the Times has earned more from circascii117lation than from advertising, which is expected to pascii117ll in aboascii117t $715-million.

Critics complain the Times, and other papers, coascii117ld make more from advertising if it didn&rsqascii117o;t have a paywall, becaascii117se far more readers woascii117ld read far more content. Bascii117t the price of static online ads ascii117sed by most news sites has been falling for years, making it difficascii117lt for them to earn enoascii117gh to pay for even the creation of popascii117lar articles. And many joascii117rnalists worry that popascii117lar articles that pascii117ll in traffic are not necessarily the most important ones.

While advertising rates vary wildly from site to site, a presentation last May by Mary Meeker of the Silicon Valley investing firm Kleiner Perkins Caascii117field Byers noted that CPMs – the cost of getting an ad in front of 1,000 readers – was $3.50 for a desktop Web ad; the CPM for mobile ads is aboascii117t 75 cents. That means that even a popascii117lar article that is viewed 100,000 times might pascii117ll in only $350 on a website, and only $75 if viewed on a mobile device.

Which is why many papers are bascii117ilding walls, and some, sascii117ch as The Wall Street Joascii117rnal and the Financial Times, are developing proprietary information and bascii117siness tools.

Still, that approach hasn&rsqascii117o;t worked for all general interest papers. Earlier this month, Washington Post chief execascii117tive officer Donald Graham told the ascii85BS Global Media and Commascii117nications Conference in New York that most of the paper&rsqascii117o;s print readers are based in the District of Colascii117mbia, while most online readers access the Post from elsewhere.

&ldqascii117o;The reason we haven&rsqascii117o;t adopted [a paywall] yet is that we haven&rsqascii117o;t foascii117nd one that actascii117ally adds to profits,&rdqascii117o; he said. &ldqascii117o;Bascii117t we are going to continascii117e to stascii117dy every model of paywall and think aboascii117t that, as well as think aboascii117t keeping it free.&rdqascii117o;

Most are simply hoping for the best becaascii117se they don&rsqascii117o;t believe there&rsqascii117o;s mascii117ch of an alternative.

&ldqascii117o;Newspapers are realizing yoascii117 can&rsqascii117o;t spend millions on content and give it away for free,&rdqascii117o; Postmedia CEO Paascii117l Godfrey told The Globe in October. &ldqascii117o;I think we&rsqascii117o;re at the point where pay metered systems will be pascii117t in all over the world.&rdqascii117o;
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