The best things in life are free, it's been said -- but the cost to compete in the online news business has taken its toll on countless newspapers from The New York Times to The Australian, which have started charging users to access digital content. Now, add British daily The Guardian to the mix, which last week put up a paywall on its iPad app, requiring a £9.99 ($13.99 USD) monthly subscription.
Critics of the move say it sends a hypocritical message, considering how long The Guardian and its editor-in-chief Alan Rusbridger have trumpeted the cause for free access to online news content. Some experts, however, say the decision was appropriate and inevitable, especially considering how profusely the publication is losing money (in 2010 alone, The Guardian and its sister paper, The Observer, lost more than £47 million).
"The Guardian, like everyone else, is figuring out the best strategy for them and their audience," says Jeff Israely, founder/editor of WorldCrunch.com. "They've made a point over the past few years of declaring that they were going to be free news platform that would be part of the open internet. So some of their readers may be disappointed and alienated by this [move]. Readers who are dead set on never paying for digital content obviously won't pay for it. But I think as habits change and with the influx of more mobile devices, people are more likely to pay for apps."
The Guardian, like many other papers, "sees the iPad edition as a different beast than its free web content," says Brett Debritz, director, Accent Media Pty Ltd., Brisbane, Australia. "It certainly isn't the only paper in the world to offer free access to its website but charge for an app. But with hard copy sales declining and lower advertising revenues, all newspapers have to innovate and experiment to survive. I can't see people cancelling their subscriptions to the print edition because of this."
The Guardian iPad app has been downloaded 500,000 times since it launched last October with a free trial, but the app had only 280,000 active users in December, according to paidContent.org, owned by Guardian News and Media, publisher of The Guardian (in an unrelated bit of news, Guardian News and Media is now looking to sell paidContent.org).
Steve Wing, head of digital marketing for Guardian News and Media, says the monthly subscription charge "is something we communicated clearly to our users back in October, so it won't come as a surprise, and we are pleased with the number of subscription conversions we have seen in just a few days.
"This approach is very much in line with the Guardian's digital first strategy, which we announced in June last year, through which we intend to offer readers the ability to access our content on as many devices as are relevant, ensuring that the commercial strategy for each of our digital products is in line with the diverse markets in which they operate," Wing says. "This approach has resulted in great success with our subscription-based iPhone app -- which is free in the U.S. -- and Kindle edition, yet we have also seen fantastic results with our free, ad-funded Android app and mobile website, m.guardian.co.uk."
Israely says he doesn't believe implementing the paywall sends the wrong message to Guardian readers. "It shows how fluid the situation is and how hard it is to come up with a strategy that works. In the long-term, their challenges will be like everyone else's -- to create a product worth paying for. Maybe their content will remain free on their browser, but I think this is a sign that [The Guardian] is going to be practical and opportunistic about where they think it makes sense to change."
Ken Doctor, a news industry analyst and author of Newsonomics: Twelve New Trends That Will Shape the News You Get (St. Martin's Press, 2010), says consumers need to understand what dire straits the newspaper business is in. "Directionally, [The Guardian] charging for content is a smart move, and I'm glad to see them doing it," he says. "However, I question why they don't have an all-access policy of ‘pay us once for all of our content and we'll get it to you however you want it.'"