The first wave of internet pay walls

'You really think it's wise to enter your credit card number?'

By Sean Coughlan
BBC News

As The Times prepares to charge readers for access to its website, it's worth remembering we've been here before - when the internet was new and fangled and the idea of asking people to pay for online content went unquestioned.

The arrival of the pay wall for The Times and Sunday Times online editions is being viewed as a media landmark - if the venture succeeds other newspapers and online content providers could follow suit. The recent era of free access for all could seem like a quaint anomaly.

But this isn't the first time that Rupert Murdoch's News International group, which also owns the Sun and News of the World, has tried to charge for an online version of a UK newspaper.

Back in early 1997, when the internet was held together by string, News International attempted an online pay wall.

Murdoch's right-hand man came to see a demonstration of this strange contraption - obviously this was faked on the hard drive, because no one trusted a dial-up connection

This long lost, below-the-radar experiment answers some questions about how hard-nosed commercial news companies ended up giving away their content for free.

This digital guinea pig was the Times Educational Supplement (TES), a weekly publication for school teachers, which was then owned by News International.

There was already a website for The Times, but it was going to be another two years before it broke a story with its own separate content.

When the TES website was set up, with its own stories, an archive and discussion forums, there was never any question of giving it away for free.

As editor of this fledgling service, I had a close-up view.

Murdoch's then right-hand man in London, Les Hinton, came to see a demonstration of this strange contraption. Obviously this was faked on the hard drive, because no one trusted a dial-up connection.

David Blunkett, then shadow education secretary, was invited to cut the ribbon, and readers were invited to subscribe for this new service, using a hi-tech payment method called sending a cheque in the post.

A letter... by e-mail!

It's easy to forget how much has changed so quickly. In 1997, the mere fact someone had written to The Times letters page using e-mail was considered a news story in its own right.

The TES landing page in 1998'...now available on-line"

There were no assumptions about what things should cost on the internet, because few people were buying anything. What kind of maniac would put their credit card number into this unreliable gadget?

But it was seen as entirely natural that people should pay for the TES online edition.

And the cheques began to arrive.

Readers began to use the service. It was like watching some kind of fast-forward evolution as a new audience emerged. They behaved differently, not just looking for news, but wanting to talk to each other, to get information from other experts and be entertained as well as informed. They wanted pleasure with a purpose.

Except then a strange thing happened. Word filtered down from above that there was a new idea in town. It was called giving it away for nothing.

The digital hippies had arrived, bringing a new dot.com philosophy from Silicon Valley. These highly-paid new media consultants were telling everyone else to give their words away for free, while charging top rates for their own.

Ink-veined newspaper managers, veterans of circulation wars, started to proselytise the importance of "free".

Return to sender

For the newly-launched TES website, it meant giving back the money to subscribers, baffling readers by telling them that the service they had agreed to buy no longer wanted their cash. This was the internet, man.

The internet, version one... displaying a BBC News page in 1997

There were letters from subscribers complaining that they wanted to pay, because they thought this was plainly a move towards cutting the service.

It might have seemed quite strange at the time, like burning money to save on the heating bills. But everyone followed the stampede to give away news.

Was this more dot con than dot com?

"It was an entirely irrational decision. We were wrong," says Tim Luckhurst, now professor of journalism at the University of Kent and former editor of the Scotsman.

"It was a huge mistake. But we were all guilty of believing in the myth," he says.

But having taught readers to expect online newspapers to be free, he says it's going to be tough for The Times and Sunday Times to convince them it's now time to pay.

"Very few people expect it to work, but most people in the industry want it to work," he says.

The papers will have to accept a huge decline in online readership, he says, but could be better served by a small number of paying customers than a large number of free riders.

Leaky bucket

There have been sporadic attempts to re-introduce the idea of paying for online news services, but with mixed results.

Apart from resistance from readers, the internet is a leaky bucket, with so many different pathways for content to be copied and re-distributed.

The New York Times has experimented with charging for parts of its website for more than a decade - and from next year will take the plunge with a flat-rate fee for unlimited use.

And the financial daily, the Wall Street Journal, with its well-heeled, niche market, has succeeded in getting people to pay online.

However a couple of years ago the Irish Times had to dismantle its pay wall for its daily news.

Remaining unconvinced is the Guardian's editor in chief, Alan Rusbridger, who has said it would be "odd and dangerous" for his paper to withdraw entirely behind a pay wall, "cutting off your journalism from the rest of the world".

In the UK, the vanguard for charging has been the Financial Times, which allows a limited amount of free material before requiring payment.

Rob Grimshaw, managing director of FT.com, says charging for online services is inevitable, as online advertising is unlikely to deliver sufficient returns.

Polo necks

In the long term, he says not charging will come to be seen as the aberration - and he imagines future business students writing case studies of how publishers were wrong-footed.

While it is still "swimming against the tide" to expect payment, he says it will be recognised soon that "the oddness has been to give it away".

Will The Times and Sunday Times put the clock back before the new media world first put on its polo neck and fashionable glasses?

Since then websites such as Facebook, YouTube and Google have found ways of getting other people to produce their content. A public service broadcaster such as the BBC provides online content through the licence fee, while carrying advertising outside the UK.

But newspapers have struggled to find a way to afford the move into a digital world. The audiences are there in vast numbers, and new technologies such as the iPad make the content tantalisingly easy to reach.

Rupert Murdoch, with his pound a day plan for The Times and Sunday Times, is going to find out how much a digital newspaper is really worth.

Sean Coughlan is now education correspondent for the BBC.

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Below is a selection of your comments.

The best proposal I've seen for crossing the digital-physical divide is to make the digital side real time, constantly updating, free for everyone. Then make the physical side of things an edited, highlights package. Like having a news website free for everyone, but having a weekly magazine composed of all the best bits, printed in high quality, something that people would want to keep. When e-ink finally becomes cheap, inserting video clips into these weekly items won't be difficult. As for putting up paywalls, I doubt it would work for general news. If its newsworthy, it will be picked up by the "free sheets" almost instantly, and in terms of a business model you're cutting 90% of your advertising revenue for a small gain in subscription income. This seems like the last gasp attempt of a media tycoon struggling to come to terms with the modern age.
Dylan, London, UK

I've run a website for 3 years, attempting to make money from advertising and struggling to make ends meet, despite superb traffic figures. We went subscription last month, on a calculation that if 1 in 400 of our readers were willing to pay, we'd at least start to break even. So far we are running at about 3 times that level, so whilst we have lost over 99% of our readers, we are bringing in much more money than advertising used to. We've also had a lot of very offensive e mails from former readers!
Richard, Devon

Such debates have been ongoing in the gaming communities for years now. Within the Sims community it is particularly heated with one website aptly named PaysitesMustBeDestroyed actively seeking content that other websites charge for and putting it up for free. I wonder if such a phenomenon will occur in the newspaper world?
Sarah, Colchester

"In 97, the mere fact someone had sent a missive into the Times letters page by e-mail was considered a news story in its own right." A couple of years out there perhaps? Our family was perfectly happy buying things online in 97 and it was amusing how most seemed to think the internet would steal their card number yet happily leave the card when they opened a tab at a restaurant! While true that not many did use the internet much or at all in 1997, describing an email to a paper as newsworthy seems a little overdramatic.
James B, Bristol

Charging for information? How very 20th Century. The problem with any dinosaur is that they can't accept a solution that involves their own extinction, and so they try ideas like this, despite the predictable failure that lies ahead. Journalists do not make news, they simply provide a service in transporting it. In the old days, only they could do it, and that is why they got paid. But this is the 21st Century and without journalists the news would still get through. If you have read this, then I just proved my point. (Alternatively, I think my opinion is worth twenty quid, so please mail me your cheque).
Andy, Wiltshire

Too late now chaps, you don't control the news anymore. Do you honestly think that people will pay a flat rate when they can use competing websites for free? No matter how many newspapers do this it'll be no good. Well get our news with or without online print.
Garret Eastwood, Cookstown, Northern Ireland.

Liked this story - a nostalgic trip down memory lane for those of us hacking away during the original dotcom boom. But it also made me think about why the Times / Sunday Times pay wall will fail - and that's because it isn't niche, the root of all success online, particularly in our Google-dominated, keyword-orientated world. I'm now a bookseller - and I pay an annual subscription for an offline industry magazine, plus access to content/services on-line. It's niche. The financial publications you cite in this article can also get away with payment - they are a niche (financial information, which is often time-sensitive). Paying for 'general' news just doesn't make sense. For example, if I don't like the way the BBC is covering a news story, I'll just switch to a competitor (Al Jazeera or Matt Drudge for example). And that's what online readers of the Times will do. Unless there's compelling content *only* available to subscribers (which The Sun / News of the World might just pull off for additional content of an exclusive scoop) I just can't see the Times managing that.
Mark Thornton, Abingdon, UK