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A model to save newspapers: Where paywalls actually work

Media paywalls are proving difficult to implement around the world. Here are two places they are working. 

By Correspondent / February 11, 2012

Tomas Bella, chief executive of the Slovakia-based company Piano Media, has launched Europe’s first national paywall for news. Not yet a year old, the company is already approaching profitability.

Courtesy of Piano Media

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Dublin, Ireland

As news organizations worldwide wonder if they can charge for content that readers are accustomed to getting free of charge, two Eastern European countries have pioneered a new model: erecting national paywalls and charging a monthly fee for access to most of their newspapers.

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Media executives are now wondering if the model can be scaled up for larger, Western countries, or if it is uniquely suited to small countries, to European nations with a history of mandatory broadcasting taxes, or even to post-communist societies with, some say, a greater thirst for news than those with a longstanding democratic history.

Piano Media launched Europe's first national paywall in Slovakia in May 2011. The company is already approaching profitability there, recently expanded to Slovenia, and has now set its sights overseas. Is this the breakthrough the beleaguered news business has been waiting for? The company's chief executive, Tomas Bella, thinks so.

"Our next priority would be to prove it's not only for small countries or Eastern Europe. We need to do two to three medium-sized countries," he says.

Slovak users pay just under $4 a month to access nine news websites, including mainstream newspapers SME, Hospodárske Noviny, and Pravda, plus business, sports, and technology publications. In wealthier Slovenia, users pay $6.50 for a similar mix. The model does not require all newspapers to participate in order to succeed, Mr. Bella says.

"It's not about getting everyone, but it is about getting enough to provide value," he says. "We need to change the mind-set of people, break the barrier of 'I will never pay,' and then you have years to work on 'how much' [people will pay]."

European newspapers are notoriously partisan. Piano Media's model is designed to ensure readers only pay for publications they read: rev-enue from subscription fees is distributed based on which publication each reader signs up through and which ones are read the most.

Many in the news industry worry that free online access is a genie that can't be put back in the bottle.

Roy Greenslade, former editor of Britain's Daily Mirror and a visiting journalism professor at the City University of London, says it is too late because the Internet's founding motto of "information wants to be free" has gone too far.

"Our funding mechanism, our business model, is over. We can lament it, we can bemoan it, but we can't do anything about it," he says.

But venerable newspapers worldwide, including The New York Times, The Times of London, Germany's Handelsblatt, and France's Le Monde are attempting to claw back losses by asking readers to pay for some or all news online. Andrew Calcutt, journalism professor at the University of East London, says that if newspapers want paying readers, they need to get back to providing hard news that is relevant to people's lives.

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