Slovak media team up to charge for online access

AP News
Posted: Apr 19, 2011 10:12 AM
Slovak media team up to charge for online access

Major Slovak media companies have put aside their rivalry to team up in a project they hope will bring in much-needed revenue by charging for access to key sections of their online sites.

In an unusual show of unanimity, they have agreed to go behind one common pay wall and charge a small fee for unlimited access to niche areas like sports, entertainment, video, opinion pieces, archives and anything else considered exclusive.

A two-week trial period and an information campaign started Monday and the paywall will come into force on May 2.

A poll last year showed that almost one half of the Slovak population was against the idea of paying for news online, but the two companies behind the project, NextBig and Etarget, are confident it will be a success given the surprising consensus among the country's main media. Only a few tabloids are refusing to join.

They're talking to Czech publishers to try and implement a similar system there _ and hope to target up to between 10 and 15 other small European nations.

Users will be asked to pay one single fee of euro2.90 ($4.15) a month for unlimited access to the websites of all participating media. General news will continue to be free, and some sites will not include advertising.

"We decided to take a soft approach," Matus Kostolny, the editor-in-chief of SME, the country's leading broadsheet, told AP, referring to the fact that some general news sections will remain free.

"Murdoch-style shock therapy wouldn't work in Central Europe."

The initiative, known as Piano, comes at a time when media publishers around the globe are looking for ways to monetize the news they provide online and compensate for a decline in advertising revenue.

Slovakia's three major national newspapers _ the business daily Hospodarske Noviny, Pravda and SME _ will be behind the paywall, alongside a sports daily, two leading magazines, a major television network, an IT magazine and video portal. That leaves only a few remaining sources of free information online.

"The most important thing is that all the media now understand that we have to find a way of making people realize that newspapers online cannot be for free," said Kostolny.

Marian Zima, director of Sport Press SRO, the publisher of the Sport daily, said all publishers agree that "it is not sustainable in the long term" to provide everything for free.

"We have to make it clear to the public that what we create has a value," Zima told AP. "You have to pay for that value."

Tomas Bella of the Prague-based Czech-Slovak media consultancy company NextBig said "Piano" would be similar to the idea of paying a monthly fee for cable television.

"One payment covers all," said Bella, the driving force behind the project and its chief executive. "It's simple and the sum can hardly be a problem for anyone."

Bella tracked the experience of other publishers worldwide with charging for online content and decided to create a model that would best suit a small, single-language media market in countries such is Slovakia.

"It would be impossible to do the same in big countries such as the United States because thousands of media organizations would have to get involved to have the market share that we have," he told AP.

Newspapers around the globe, including The Wall Street Journal, the Times of London, the Financial Times and the New York Times charge their readers separately for some or all online news. Collective projects have appeared in the United States similar to "Piano."

Bella estimated 0.8-1.5 percent of the 2.5 million of Slovaks who use the Internet could subscribe in the early stages, while 5-15 percent "is realistic" in five years.

His company gets 30 percent of the revenue while the publishers get the rest, depending on how much time users spend on their Webs.

The paywall would apply to people reading news on their computers, mobiles and _ within weeks _ tablets.

Martin Keseg, a 35-year-old IT specialist from the Slovak capital Bratislava, said he hoped the payment model and signing-up process would be hassle-free.

"I have no problem with it," Keseg said. "The euro2.90 fee won't harm anyone and will not force people to look for an alternative. It would be great to have all the websites without ads."