Odds of newspapers' survival: Lab tests are on

In Britain, a Laboratory for Newsprint's Future

PARIS — Only days after News Corp. announced plans to start charging online readers of The Times of London and its Sunday sibling, a so-called pay wall came down last week at The Southern Reporter in Selkirk, Scotland

By Eric Pfanner, NYT, Published: April 4, 2010

The Times, with a storied name and a weekday circulation of 505,000, and The Reporter, which sells about 15,000 papers weekly, occupy very different positions in the newspaper market. But their decisions show how Britain is turning into a laboratory for the future of newspapers in the digital era.

The question for publishers is this: Can they persuade sufficient numbers of readers to pay online to make up for shortfalls in print advertising and circulation revenue, or are they better off keeping Web sites free and waiting for enough ad revenue to materialize?
"There is a real sense that we will be a test bed," said Vanessa Clifford, head of print advertising at Mindshare, a media buying agency, in London. "The U.K. still loves newspapers, despite the talk of decline. If you can't get people to pay for them here, then you might not be able to get them to do so anywhere."
By some measures, Britain remains a vibrant newspaper market. Ten papers with widespread national circulation together sell about 10 million copies a day. In a country of 60 million people, that is a lot of newspapers — many more than in similarly sized European markets like France or Italy.
But the circulation slump has been deepening: Both The Times and another daily, The Guardian, experienced declines of more than 16 percent in February from the level of a year earlier. Advertising, even on the Web, has been slow to recover from the recession.
Proponents of charging, like James Harding, editor of The Times of London, say the cost of producing high-quality journalism requires readers to pay. "Saying that our journalism is worthless and dumping it free online is not a viable economic model," he said in a presentation to the paper's journalists.

To persuade readers to pay, The Times Web sites plan to add question-and-answer sessions with star journalists and other features. Mobile applications will be included with online subscriptions.

http://www.nytimes.com/2010/04/05/business/media/05iht-papers05.html?ref=business