Is charging for digital news a good thing?

Once unheard of, it soon will be the practice of more than 40% of U.S. dailies

“The New York Times” now has 727,000 digital subscribers.
(Photo: Angus Oborn, Getty Images/Lonely Planet Images)

Charging for digital news — erecting paywalls — is not a panacea for the many problems newspapers face as they struggle to adapt in the Internet era. But it’s an important arrow in the quiver. It’s a critical new source of revenue for news outlets that desperately need them in the wake of a steep decline in ad dollars.

Some early attempts to charge for digital content were short-lived, among them TimesSelect, which placed New York Times columnists behind a paywall, so there was much skepticism when the paper began charging for digital content in March 2011.

The New York Times now has 727,000 digital subscribers. While advertising revenue continues to shrink, the newspaper industry’s circulation revenue rose by 5% last year, thanks to those digital pennies. It was the first such increase since 2003.

Change had come so quickly that it’s hard to remember how bold and against-the-grain the Times’ move was. For years, the prevailing mantra was that on the Internet, information wants to be free. Digital enthusiasts portrayed it as virtually the moral equivalent of a constitutional right.

Newspaper companies, understandably baffled by the digital maelstrom engulfing them, figured they better get in on the action. They started posting their expensively gathered news content on the Web, for free, all the while charging for it in print. The hope was that their handiwork would attract lots of digital readers and that advertising dollars would follow.



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