Lessons for U.S. Media From European Paid-Content Plays

Le Figaro, Le Monde Offer Premium Services and The Guardian, Die Welt Sell Apps

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LONDON (AdAge.com) -- U.S. newspapers from The New York Times to the Enterprise-Record in Chico, Calif., have recently announced plans to start charging their websites' heaviest users, but some of the countless others still trying to choose a path forward may want to cast a glance across the Atlantic. European newspapers are moving slightly more quickly to prove, or at least put to the test, consumers' willingness to pay for news that's delivered digitally.

German paper Die Welt is selling a paid app.
German paper Die Welt is selling a paid app.
Le Monde in France, for example, has been charging for premium content since 2002, and has racked up 100,000 subscribers steadily paying $8 a month -- even though its traditional newspaper circulation is barely more than 300,000. And on Feb. 11, Le Figaro launched a subscription service on its website. L'Express is rumored to be close behind.

To be sure, there are still relatively few European attempts to bill for content online, and no one can yet say for sure how wedded consumers are to the free-information society. The consensus, however, is that a hybrid model is the best option for most businesses as publications seek to develop potentially lucrative relationships with paying customers without losing the volume that comes from offering free content.

And even if the final judgments aren't yet clear, the European efforts so far suggest some keys to keep in mind.

Your local market matters
Le Figaro's approach, 14 months in the making, keeps the main newspaper content free but offers two other options at $10 and $20 a month. Premium users get access to in-depth information, special offers, twice-daily newsletters, roundtable discussions with journalists, the opportunity to see their own content on the home page of the site and a concierge service that can arrange everything from theater tickets to shirt cleaning.

"We have done a lot of work to create a very rich offer -- but you can be sure it's not perfect, and there is a lot more to do," said Bertrand Gie, the paper's new-media director. "We are not sure we can ask people to pay for information, but we will try. Nobody has the truth."

Apps may be easier
Two regional titles in Germany, Berliner Morgenpost and Hamburger Abendblatt, have put up pay walls around premium content. But two big national titles, Bild and Die Welt (owned by publishing company Axel Springer), are keeping their websites free while selling iPhone-app subscriptions for $2 to $5 a month. And when The Guardian, Britain's most-visited newspaper website, launched a $3.73 iPhone app -- despite outspoken rejection of the pay-wall model -- it sold 70,000 in the first month.

The app route's advantage is that it is relatively easy to pursue and doesn't require setting up a complicated, individually tailored payment system. "The iTunes App Store is an established platform, and we have jumped on it," said a spokesman for Axel Springer. "It's easy to pay, simple and safe. We can use it to distribute attractive content easily."

Bild, with print circulation of 3 million, and Die Welt, with print circulation of 300,000, have collectively sold 100,000 app subscriptions in just four weeks. "We are very pleased," the spokesman said. "We didn't expect that many." The company is also developing offers for the iPad when it launches in Europe in April.

Count your pennies -- or pounds
The U.K.'s Times newspaper, on the other hand, is planning to put up a pay wall in the next few months. But not everyone can do everything Rupert Murdoch can.

"Rupert Murdoch is flying a kite that others can't afford," said Hugo Drayton, CEO of InSkin Media and former new-media director at the Telegraph Group. "As long as 'Avatar' is doing well at the box office, he's OK, and he might even drive off a few competitors while he's at it -- but in my view, it needs to be a hybrid model.

"Getting people to pay is a lot of hard work," Mr. Drayton added. "It's a big investment, and you need compelling promotions every week to [which] people want to belong. Everyone wants to charge as much as possible, but you can only do it for unique content. If you put up a wall on most general newspapers, there are too many other places to go."

Target the young
Europeans are no more enthusiastic about paying for newspapers online than their U.S. counterparts, according to a Nielsen report. In the U.S., 66% of poll respondents said they would not pay, compared to 77% in the U.K., 66% in France and 63% in Germany. The percentages of people who already pay for online newspaper content followed a similar pattern: 6% in the U.S. and France; 5% in Germany; and 3% in the U.K.

U.K. outlet The Times is planning a pay wall.
U.K. outlet The Times is planning a pay wall.
And "standard" content isn't your best bet anywhere. In 52 countries around the world, 71% told Nielsen that online content would have to be better than what is available free before they would pay for it, and 79% would not use a site that charges them if they can find the same information at no cost.

But those under 20 years old -- the "digital natives" -- were the most willing to pay. "This may seem counterintuitive, but it reflects a realization that they are now in a world where the value of content is platform-agnostic," said Nick Covey, the report's author.

Young people were more willing to pay for movies, music, games and magazines than for newspapers, but there's nothing preventing newspapers from shopping nontraditional content or packaging their news in ways that might appeal more to young people.

Keep trying
"The motivation for finding paid-for models is clear, but the likelihood of success is far less certain," said Eamonn Byrne, business director at the World Association of Newspaper Publishers. "The iPhone and the iPad show promise, but I don't know if it's the ultimate route. It solves the payment problem, but it swaps a reliance on Google to a reliance on Apple.

"In the long run, though, the industry has no choice. It has to find a way to get people to pay for content. It's a great experiment."

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