Companies & Industries

TorStar's new paywall doesn't change the dire straits of newspaper economics

Throwing everything at the paywall to see what sticks

Screenshot of the Toronto Star

The Toronto Star unveiled its digital paywall on Monday, August 12.

On Monday, TorStar Corp. announced, finally, that its long promised paywall for the Toronto Star would kick in this week. At the same time, the company revealed it was shuttering and, its two experiments in hyper-local business news.

The paywall announcement came as no real surprise. TorStar has been planning to charge for its online content for some time now. Its major competitors have all brought in their own paywalls. And, as I wrote about in the magazine earlier this year, they don’t really have much to lose. The metered paywall model the paper is bringing in—which offers readers a number of free stories every month before charging for additional content—should have a limited impact on the Star’s overall web traffic. If it works as planned, it could shore up the paper’s print subscriber base and offer a small new revenue stream from digital-only readers. What it won’t do is fundamentally alter the paper’s economics. Paywalls may have a major impact on consumer experience. But on the business end, they’re just one scheme among many—another gambit in the panicky, yet hopeful era of newspapers throwing stuff against the wall and praying something sticks.

What’s more surprising, maybe, is the decision to close the local business sites. Both were less than a year old. And as anyone who’s ever tried to build an audience—online or off—knows, that’s not a lot of time to establish a brand. Both sites offered hyper-local, specialized business news online at a relatively steep price: $9 a week with discounts available for bulk buyers. When I spoke to him in January, Ed Greenspon, the TorStar executive in charge of the projects, told me each site would only need about 3,000 to 5,000 subscribers to work economically. That the company decided they had failed so fast suggests, perhaps, that they were nowhere near hitting that mark. It’s also possible, I suppose, that TorStar didn’t like the idea of asking some readers to pay $36 a month for one product and others $10 a month for a much more substantial one. (Greenspon did not respond to an email Tuesday asking for an interview. A TorStar spokesman told reporters Monday the sites were growing but not fast enough and that closing them was a “business decision.”)

In a way, I think the YourBiz sites were caught between two competing business ideas. On the one hand, online innovators are always urged to fail fast. If a project isn’t working, they’re told, accept that, shutter it and move your time and resources onto something else, quickly. On the other hand, however, building an audience’s trust online, convincing them you should be part of their daily routine, let alone something they’ll pay for, can be a slow, steady grind. Andrew Sullivan blogged for more than 12 years before asking his audience for cash. AllNovaScotia, the original hyper-local Canadian business site, was a bootstrapped passion project. In the early days, the owner was the operator (he still is). As a result he was able to give himself the time to grow the YourBiz sites never had.

Neither YourMississaugaBiz nor YourHamiltonBiz published Tuesday. But for now, TorStar’s other niche online product, the political site QP Briefing, remains active. The company’s critically lauded weekly magazine the Grid, meanwhile, is hiring again after laying off a good chunk of its masthead earlier this summer. So not all things at TorStar are dire. As for the paywall, as long as the mayor of Toronto keeps having “a couple” of beers and wandering the streets, I suspect there will be an audience for Star reporting. If they could only dig up a certain video, meanwhile, they might just sign up the whole country. Barring that, the Star paywall will likely act like paywalls before it: as a significant but not transformational shift, the kind of thing that makes a lot of noise, but in the end doesn’t change very much at all.