Toronto Star moving behind paywall

08/13/2013 08:44 EDT | Updated 10/13/2013 05:12 EDT
The Toronto Star will begin asking its web readers to pay for content starting on Tuesday.

The country's biggest paper by circulation told staff that details of the program, including how much it costs, will appear in both the newspaper and online.

The model will ask readers to pay for full access to online content with a digital subscription to the Star.

The first month of digital access costs 99 cents, then $9.99 a month plus HST after that, but will be free for home subscribers who meet certain conditions.

Toronto-area residents who sign up for digital access can also get free home delivery on Saturday until Dec. 31.

Other Canadian media outlets have launched "metered" paywalls that allow readers to access a specific number of free articles each month before they're asked to pay for further content. The Star is offering non-subscribers 10 free online articles per month.

Other big Canadian newspapers with paywalls in place include National Post, which charges $9.95 per month, and the Globe & Mail, which charges $19.99 per month.

Parent company Torstar Corp. has been testing the paywall at other newspapers it owns such as the Hamilton Spectator and the Waterloo Region Record.

The company is under pressure to wring more cash from its newspapers. Last month Torstar reported an eight per cent drop in revenue compared to the previous year and saw profits fall for a fifth consecutive quarter.

Some 400 newspapers have switched to a pay model across the U.S., where the industry has been harder hit. Many are looking to the example set by the New York Times, which put up a paywall two years ago and now draws $150 million US per year from some 700,000 paid subcribers.

Others are wondering what e-retailing magnate Jeff Bezos will do with the Washington Post, following his purchase of the storied but struggling broadsheet earlier this month. The paper started phasing in a paywall two months before the deal was revealed.

But industry watchers remain divided on the merits of paid subscriptions over other potential revenue streams such as advertising.

Critics insist online readers are too impatient to put up with ads. But research suggests readers will tolerate a modest dose of commercial messages — roughly six, 30-second ads per hour, according to a 2012 study at Murdoch University in Australia.

Two sites shut down

On Tuesday, Torstar also ended a short-lived venture into small business media coverage, with the closure of two paywalled websites it owned.

The publisher of the Toronto Star and several other dailies notified staff at YourMississaugaBiz and YourHamiltonBiz that both sites would cease operations effective immediately.

About 15 employees are affected by the decision, said Bob Hepburn, a spokesman for the media company.

"It's a business decision based on the economic conditions," he said in a phone interview.

The YourMississaugaBiz website launched last year while YourHamiltonBiz began operating in January. Both went behind a paywall earlier this year, and readers could subscribe to each website for about $30 per month.

Torstar holds an investment in The Canadian Press as part of a joint agreement with the parent companies of the Globe and Mail and Montreal La Presse.