News

They are among the world's most influential newspapers when it comes to setting the news agenda. But a push by The New York Times and The Wall Street Journal to abandon their subscription websites may now influence a broad - and irreversible shift - across the newspaper industry itself.

The Times officially walked away from its subscription model last week, deciding it could make more money by making all of its content available free of charge online - including its vast digital archive that users have paid to access in the past.

As that decision was made, News Corp. chairman Rupert Murdoch mused about doing the same with The Wall Street Journal.

Though he has yet to close the purchase of the well-known financial broadsheet, moving entirely to free content online already "looks like the way we are going," he told analysts.

This has the newspaper industry watching closely. Though major papers like the Los Angeles Times have been scrapping their subscription models, these latest moves are seen as the potential death-knell for the online subscription model, given the clout of the Times and the Journal as global news sources.

Internet advertising has become too powerful and too lucrative to block non-subscribers from your website, executives across the newspaper industry have told analysts and investors.

However, the Times and the Journal were widely seen as the last bastions of a successful subscription model in the North American industry. With both now heading in the opposite direction, other newspapers may now have to look closely at their own subscription strategies, including most of Canada's publications that offer a mix of paid and free content.

Search engines and portals like Google and Yahoo act as key conduits that link readers with news outlets, rather than Internet users typing in the Web address of a specific publication. Having noticed this trend, the Times is trying to open the gates as wide as possible so that those audiences aren't inadvertently turned away by the subscription wall.

The larger the traffic numbers, the more the paper can make from advertising, said Vivian Schiller, senior vice-president and general manager of NYTimes.com.

"In the old days - and by the old days I mean just a few years ago - people would come to the newspaper by typing in the [website address]," Ms. Schiller said. "Now, people are coming to us that never even knew they were looking for us."

When the paper launched its revamped pay site TimesSelect in 2005, "frankly the Internet was kind of a different place than it is now," Ms. Schiller said.

The Times figures it can more than replace the $10-million (U.S.) in subscriber revenue it generates each year with ad dollars from the increased traffic. And if the Journal follows, it will be betting that the profit from boosting its audience will exceed the industry-leading subscriber list it has amassed, with close to one million registered users.

"Specialized information is much more available today, so it becomes a real difficult economic proposition to charge for it," said Kaan Yigit, a consultant with Solutions Research Group Inc. in Toronto. Detailed weather and stock market data was difficult to get even five years ago, but is now offered free through numerous sites, he said.

"Users are getting used to an environment where they pay for their Internet connections, and then the rest of it is kind of like water, it just comes through the tap. They see it as a utility and they don't want to pay for it, but they will accept advertising."

Major papers such as the U.K.'s Financial Times and The Globe and Mail have a combination of premium subscriber content and free news, but the trend has been to open up more of the content to an ad-supported model. CanWest Global Communications Inc. also uses a mixed approach.

While basic news content has become increasingly advertising supported, the Times' move to open its archives since 1987 (along with 1851-1922 which is already in the public domain) has raised eyebrows in the industry.

For large papers, selling access to their archive is a lucrative enterprise, with databases, governments and businesses spending millions a year to tap into libraries of past articles.

"I was surprised by the New York Times' decision," Globe and Mail publisher Phillip Crawley said. He would have reservations about converting the Globe's archives to a free database given the revenue it generates, turning a profit for the paper.

"The Globe's archive, with its long history, is a treasure house of information which remains a valuable asset," he said.

The Times is hoping to use its new free archive to draw traffic into other parts of the website, Ms. Schiller said.

"A certain portion of the people that come in through the archive ... are going to get diverted," Ms. Schiller said. "They're going to find other portions of our site such as business, technology, health, entertainment - key verticals that you can really monetize."

The eyes of the industry now shift to Mr. Murdoch, who once said he was drawn to the Journal because it owned content that readers would pay to access. But with a key rival shifting away from subscriptions, a decision on the Journal's online business is now "right on the front burner," he told analysts.