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April 15, 2011, noon

Call it the new Iron Curtain: Slovak media erect a nationwide paywall

It’s become a cliché in discussions about the future of news: Most readers won’t pay for news online because they can find it elsewhere for free.

But what if consumers had no free alternatives? What if every news site in the country erected a paywall on the same day? It’s a far-flung hypothetical (and a newspaper exec’s fantasy) in the United States, but it’s about to become reality in Slovakia — well, almost. Call it the new Iron Curtain.

Nine of Slovakia’s major news organizations have partnered with a company called Piano Media to create a unified, um, pay curtain, which goes up Monday. After a free two-week trial, users will have to pay €2.90 ($4.20) per month for unlimited access to all sites.

The man behind the curtain is Piano’s CEO, Tomas Bella, formerly the editor-in-chief of Slovakia’s largest broadsheet. He’d tried to create a pay model at his own paper — charging readers for individual commentaries — and failed miserably. Three other Slovak news organizations had also failed. This time, Bella said he took a cue from cable TV providers: One company charges for access to multiple channels, with opportunities to charge extra for premium content (think of in-depth financial news as news’ HBO).

“We don’t think it’s a problem of people refusing to pay — we don’t think it’s a problem of money. It’s a problem of convenience,” Bella said, speaking to me by phone from Bratislava. “The complexity of the system and the complexity of which media will get what amount of money is hidden from the user.”

A subscriber logs in only once for access to any site in the Piano network. The company handles all billing, software, and support. Piano takes a 30 percent cut and divvies up the rest among members based on how much time users spend on their sites — and time is the measurement, not pageviews. Publishers get to control what content goes behind the curtain, and they can offer special benefits for paying members. For example, Bella said some publishers plan to remove ads, while others might make stories available earlier in the day to paying customers. Bella said most publishers [see below] agreed to make leaving comments a premium feature, which has the added bonus of raising the level of discourse. Haters gonna hate, but haters, they gotta pay.

Piano is following the John Gruber rule of pricing: Keep it simple. It’s a flat rate, always billed monthly. Compare that to The New York Times’ tiered pay model, which has drawn criticism for its complexity.

Bella said the partnership with Slovak media companies took a year to finalize. He initially approached 12 publishers and expected half of them to sign on. The nine who did include all three national broadsheets, specialty newspapers, magazines, and a television station. No single publisher has more power than another. “At first, our plan was to give the media a share in our company,” Bella said. “We said no, because we realized it would be very hard to get them to agree on anything.” Bella said some partners have offered to buy his company, but he refused.

Three euros a month is not a lot of money. Bella said he is more interested in changing attitudes than making money. It’s psychological: If you start slowly, maybe, just maybe, you’ll persuade people that news is worth paying for. A nationwide paywall is like a reset button after years of free riding.

Bella hopes to sign up between 0.8 and 1.5 percent of the Slovak population (5.4 million) in the first year — which, he says, would represent by far the largest digital subscriber base in the region. If it takes off, he’ll expand to other small, single-language European countries, such as Holland or Denmark.

And of course, it’s Slovakia’s size and relative language isolation that has left it with a comparatively contained media universe; Bella concedes that his pay model probably wouldn’t work in a country like the United States, 60 times larger and with more free news sources online than anyone can count. But it’s an interesting experiment that will no doubt be watched by those who wish they could build a similar paywall in their own country — and, of course, by the remaining free sites in Slovakia to see how much of their peers’ audiences they can siphon off.

[Update: This story originally said all nine publishers had agreed to make commenting a paid-only feature. Actually, only five of the nine have.]

POSTED     April 15, 2011, noon
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