05/10/2012 06:41 EDT | Updated 07/10/2012 05:12 EDT

Globe and Mail to charge for online content, ask employees to take unpaid leave

TORONTO - The Globe and Mail will soon move to an online pay-per-view model, the newspaper told employees Thursday as it also asked them to take unpaid leave in moves that will help the newspaper improve its bottom line.

Phillip Crawley said Thursday the newspaper has decided that beginning in the fall, premium content will be shielded behind a paywall.

"I think there is a broader general move towards charging for content," Crawley said.

"It doesn't mean that everything is sealed off because it's a metered paywall, it means that if you go beyond a certain number of stories you want to access you end up paying something for the privilege of doing that."

Crawley said the paper had already planned to put Report on Business content behind a paywall this fall, but "as we've looked further into this, we think it's right just to take the plunge."

The Globe spent the past year studying similar strategies at papers like London's Financial Times, The Wall Street Journal and The New York Times.

In Canada, Postmedia (TSX:PNC.A) began experimenting with a "metered'' or paywall model at some of its papers last year and is rolling the model out to the rest of the papers in its chain. And Torstar (TSX:TS.B), owner of the Toronto Star newspaper, has already begun charging readers for online articles from its Hamilton Spectator daily.

The Globe and Mail is still working out the details on pricing structures and Crawley wouldn't give any further indication as to how the system will work. The Times allows readers to access 10 stories per month before paying, but print subscribers get access to all articles at no additional cost.

"Clearly the traditional revenue model is changing. Over the last 10 years we've seen a lot more digital revenue from ad sales but we haven't done a great deal on the subscription side, so this is an area that is still relatively untapped for us," Crawley.

"At the same time, we've got to look at the existing costs of the business. As some of the traditional sources of revenue decline we need to look at where our resources are and make some shifts."

In another move that comes as the news industry continues to cut costs to offset declining revenue, management told employees at a town hall meeting Thursday that it is seeking volunteers to take any number of weeks of temporary leave over the slow summer months.

"That's something we're just trying to do to manage the business better this year," Crawley said.

"Our new fiscal year starts on September the 1st, we hope by then we see an improvement in market conditions and the people who have been on temporary leave will come back to us and be working flat out."

Crawley said the paper is targeting the equivalent of 80 employees, or 10 per cent of its workforce, under the program. If the target is not reached, he adds, management will consider alternatives such as involuntary temporary leave.

"We're not talking about permanent layoffs," he said.

Sue Andrew, unit chair at the Southern Ontario Newspaper Guild, said volunteers have a one-week window to apply and will be able to choose how much time they take.

The union is working with management to determine how to best mitigate the impact on employees.

Andrew said the union is relieved that the management is so far not asking for permanent staff reductions.

"We're supportive of any efforts it takes to avoid layoffs."

In the decades since the advent of the Internet, newspapers have witnessed a hollowing out of the industry as a result of declining revenues.

But Crawley thinks readers are ready to pay for the type of value-added content — including columnists, video and other "specialist" content — it plans to charge for. Breaking, or "commodity" news, and wire service stories would not likely be behind the paywall.

"We believe the loyalty that we've got and the quality of the content will persuade them that this is something that they are happy to pay for."

The Globe and Mail is part owner of The Canadian Press, the national wire service.