The Washington Post, one of the last holdouts against the trend of charging readers for online access that has swept through the newspaper industry in the last two years, is likely to reverse that decision in 2013, according to people familiar with the matter.
While details are being finalized, people familiar with the matter said a metered paywall--meaning a website that allows casual readers to read a certain number of stories for free before charging a subscription fee--is likely to be rolled out in 2013, along with price increases to the print newspaper's newsstand price. One person familiar with the matter said the paywall will be introduced no earlier than next summer.
The move comes as the Post is dealing with a steep decline in its core business of print advertising. The Post's newspaper division reported an operating loss of $56.3 million for the first nine months of the year, pulled down by a 14% decline in revenue to $160.7 million. The company lost its chief revenue officer in the spring, and the search for a replacement is ongoing.
Most other newspapers in the country, including the New York Times (NYT) and Gannett Co.'s (GCI) local papers, have introduced paywalls in the past year or so, generating increased circulation revenues that offset print advertising losses. But among major newspapers, the Post has stood almost alone in its decision to keep its website free.
Don Graham, the chairman of the Washington Post Company (WPO), has long argued the Post's unique position as a locally distributed paper with a national online readership makes it ill-suited for a paywall. He reiterated that view during a UBS investor conference earlier this week, noting the Post had robust digital advertising revenue that a paywall would threaten. But, noting that former Washington Post Company board members and longtime Graham family friend Warren Buffett was a supporter of paywalls, he left the door open a crack to the possibility of adding one at the Post.
"We are obviously looking at pay walls of every type," he said. "But the reason we haven't adopted them yet is that we haven't found one that actually adds profits immediately. But we're going to continue to study every model of pay wall and think about that, as well as thinking about keeping it free."
Tensions over budgets contributed to a recent shakeup of the Post's editorial leadership, with executive editor Marcus Brauchli stepping down and Boston Globe editor Marty Baron replacing him at the end of the year. At the time, Katharine Weymouth, the Post's publisher, said the paywall debate had no bearing on the move, but added in an interview with the Journal, "We've always been open to it." Ms. Weymouth did not reply to a request for comment.
People familiar with the Post's thinking point to the success of the New York Times's paywall model, which was introduced about 18 months ago and now has more than 500,000 digital subscribers. It has helped the company's newspapers' circulation revenue eclipse their advertising revenue, as part of the impetus for the Post's change of heart.
Indeed, Mr. Graham called the Times's paywall model "intelligently conceived" during the UBS conference this week.
--Write to Keach Hagey at email@example.com