In January, The Record of Stockton took a bold move: It began charging readers for access to some online content.
Others in the news industry, including the News-Sentinel, are watching The Record's move with keen interest. For years, most papers have given away content on the Web in hopes of attracting new readers and, perhaps more important, new advertising dollars.
But advertising revenue online has proven meager, and many publishers wonder if they've hurt their print circulation by giving content away online.
Now, The Record is part of a movement to see whether readers will pay for online content, and whether closing off some of the free material will help stabilize print circulation.
Much could be at stake: If the paid model works, news companies could steady their finances and preserve print journalism for years to come.
Record Publisher Roger Coover said executives at The Record conducted extensive studies on their pay model, and he expects other papers in similar markets to follow their example.
"Before, subscribers were subsidizing the people who were reading for free," Coover said. "This model ensures everyone pays their fair share."
The print model isn't going away, and the pay wall will help supplement the paper's business, Coover said.
A publisher's view
Coover said the response has been better than expected. Although Coover said he didn't have much data since the program is only a month old, he said the only people who have expressed displeasure are those who never paid for the paper before.
He said The Record is able to charge for content because it has no other major competition in San Joaquin County. Papers in larger markets like Boston and New York would have a more difficult time with creating pay walls because users have more places to gather information about their hometown.
"Nobody can compete in San Joaquin County like we do," Coover said. "For our size and situation, it makes sense."
The way people receive their news has evolved dramatically since the advent of the Internet in the 1990s. Giving away news on the Web has been the rule, and attempts to charge for it have been mixed.
The New York Times has attempted and abandoned pay models for its online content several times. In 2011, the paper will attempt again. The Wall Street Journal has successfully enacted a pay wall, but it's believed the news outlet has been successful in doing so because it offers specialized financial coverage to a target audience of bankers, investors and brokers. Newspapers nationwide have struggled to build revenues as the Internet draws readers away from the printed copy, and some have folded.
The Record's pay wall works by charging readers fees depending on differing levels of access, and whether the reader is already a print subscriber. (See accompanying information box.)
An unusual business model?
Some offer a startling model for the news online business: the pornography industry.
How The Record's pay wall works— First-time subscribers can get all-access to The Record's print and online content for $2.67 a week.
— There are various levels of access to the Web site, beginning with three free visits per month and increasing to an all-access level.
— Premium subscribers also have daily access to eRecord, an exact replica of the print edition that allows readers to see the newspaper page-by-page online.
Adult Web sites that charge users have lessons for the newspaper industry because they offer exclusive content and consistent updates, Del Stone, who oversees the Northwest Florida Daily News Web site www.nwfdailynews.com, said in an e-mail.
"The beauty of the model is it would work perfectly for a news and information provider because the content changes more rapidly than it can be undermined," he wrote.
For many pornography sites, users pay one of several flat rates for a membership that can last for anywhere between a month to a year.
Marty Weybret, publisher for the Lodi News-Sentinel, disagrees.
"The news is not as sexy as pornography," he said.
As it has always been with newspapers, coupling audience with advertising dollars is the key to the success of online newspapers.
"Any time you diminish the audience size, you diminish the effectiveness of advertising," Weybret said.
Newspapers could also take a page from the blogosphere by adding virtual tip jars to their Web sites. One such Web site, www.kachingle.com, enables users to make small donations to sites they frequent. Kachingle users are charged $5 a month, and the money is broken down based on site visits. Web sites that participate with Kachingle have an icon on their page that users can click on. From there, Kachingle distributes donations monthly among the participating sites you click on the most.
Weybret said that while he hasn't ruled out the thought, he isn't sold on it.
"People have a hard enough time paying for news online; it will be even harder for them to think of it as a charity," he said.
The News-Sentinel launched an experiment several years ago known as Sentinel Gold, which provided exclusive content for print subscribers online, such as coupons, blogs and real estate sales information. Weybret said it was discontinued because it didn't gain popularity. The News-Sentinel also charged for its online archives starting in 1998, but discontinued the practice five years later because it wasn't effective.
"The income and traffic were abysmal," Weybret said. "We didn't promote it well, and as soon as users hit a pay wall, they found better things to do."
One college professor sides with Weybret's assessment.
"As long as there is free content available on the Internet, people will gravitate towards that as opposed to paying," said Ed Arke, chair of the communications department at Messiah College in Grantham, Pa. in an e-mail. "The only qualifier I might add would be a local paper may have a better chance at success than, say, the New York Times because the content might be more unique."
Where do we go from here?
Newspaper insiders and publishers alike know this is a time to get creative.
As a journalist and entrepreneur, Steve Outing is against pay walls for general news Web sites because he says it can damage a news organization's profits and influence. He warns that putting up pay walls can reduce traffic to a Web site and will in turn drive down advertising revenue because fewer people will be exposed to the ads.
When newspapers charge for their pieces of investigative journalism, Outing cringes, because he believes it goes against the industry's foundation of informing the public.
The Miami Herald adopted a donation icon on its Web site similar to what Kachingle offers recently, but Outing said it's ineffective because it asks people to pay with a credit card, and the process takes too many clicks. He said it would work better if the Herald adopted a PayPal structure that made it easier for people to donate.
Asking for donations could supplement income, but Outing said it alone won't help the industry recover. He said papers must be wary to charge, especially if the content isn't exclusive and is easily found elsewhere.
There is another issue a paper in a town such as Lodi should think about when it comes to putting up pay walls online.
A newspaper that serves a community trying to establish itself as a tourist destination would be unwise to put up a pay wall for online content, Outing said.
"I'm not sure it makes sense to lock out folks from outside," he said.
Great reporting will bring readers
One industry consultant thinks it's crucial for journalism to go back to the basics of strong reporting in order to give users a reason to want to fork their over money for content.
"Quality of content will be deciding factor," said Julie Schoenfeld, CEO of Perfect Market, a technology company that works with publishers to increase their revenues.
She said there are three types of consumers of news information on the Internet: brand users, intent users and event users.
Brand users are those with a devotion to a specific publication. Intent users are those looking for a certain subject or story. Event users come to a site because of breaking news or some specific event.
Schoenfeld said Internet users don't like using search engines to find news and then being forced to pay when they want to read an article.
She said pay walls are not the most efficient method because her research has shown 80 percent of pages looked at on Web sites come from 20 percent of the visitors. She said that by reversing that statistic, it shows that 80 percent of visitors account for 20 percent of page views. Schoenfeld said those users are coming in from search engines and other back doors.
Weybret said he hasn't ruled out putting up a pay wall on the News-Sentinel's Web site, and is monitoring the successes and failures of other papers.
"Innovation is like wagon trains heading West, and someone has to be first," said Weybret. "I will be very happy to see if The (Stockton) Record gets to California without any arrows in its back. If they do, I will be the first to follow."