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Variety to start charging for website access

The entertainment-industry publication's return to a 'pay wall' could be risky, but the company's president says the risk is necessary given the potential loss of paid print subscribers.

December 10, 2009|By Ben Fritz

In a move that will be watched carefully by newspapers struggling to find a viable financial model in the digital age, entertainment industry publication Variety today will begin charging readers for access to the news and information on its website.

The return to erecting a "pay wall," though anticipated, nonetheless could be risky because several online competitors -- including the Hollywood Reporter, Deadline, the Wrap and the Los Angeles Times -- offer similar content without charge, potentially undermining Variety's ability to get subscribers to pay.

Although it's one of the first publications to make the move to cut off unpaid access to its site, many others are examining the issue as advertising migrates from print to the Internet. Rupert Murdoch, chairman of News Corp., owner of the Wall Street Journal, the New York Post and other newspapers, has said repeatedly that he wants to charge for all online news content.

For Variety, it gets down to the unique content shaped for a small but important readership that gives it leverage in being able to charge for access, company executives believe.

"I have to believe that Variety is both a superior product and one that covers the ground in a much wider fashion," said Neil Stiles, president of Variety Group, a unit of Reed Elsevier Inc.

When Variety shifted to free site access in February 2007, it hoped to take advantage of the then-booming online advertising market by drawing in a large audience interested in entertainment and then selling ads targeted to them.

As with many media companies, however, those expectations didn't pan out, particularly this year, as industrywide online ad revenue fell 5.3% in the first half, according to Internet Advertising Bureau.

Beginning today, Stiles said, 1 in 10 visitors to Variety's website will be required to enter a log-in name and password to access the site. Over the next few months, as potential glitches are ironed out, the so-called pay wall will be extended to all website visitors.

Stiles said new subscribers will be able to choose which Variety products they want, including all of them, for the single price of $248 a year.

The one-price strategy is a shift for the 104-year-old Variety, which has historically charged different rates for access to its daily paper, weekly magazine, mobile applications and some digital versions.

With its new approach, Variety is now focused on selling subscriptions and ads to industry professionals.

As Variety starts charging for digital content, it's possible that younger members of the target audience will flock to free competitors, but Stiles said that was a risk the company needed to take.

"Realistically, if we carry on doing what we're doing, there is a chance that two years down the line we will start losing paid subscribers to the paper product and will not have replaced that with paid content online," he said.

ben.fritz@latimes.com

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