Variety launching digital pay strategy with one price for all content

Dec. 9, 2009 11:41 AM PT

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Entertainment industry trade paper Variety will begin a strategy Thursday to block free access to its website and charge one price for all of its content: $248 per year.

In a risky move that will see it charging for a category of news and information available free online from most of its competitors -- including the Hollywood Reporter, Deadline, the Wrap, and the Los Angeles Times -- Variety will require a paid subscription for users to access any content on its website, including news, reviews, opinions and archives.

‘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.

Beginning Thursday, 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 technical glitches are ironed out, the so-called pay wall will be extended to all website visitors. Current subscribers to Daily Variety and weekly Variety in print will be e-mailed passwords to access the site.

The new one-price strategy is a shift for 104 year-old Variety, which has historically charged different rates for access to its daily paper, weekly magazine, mobile applications and some digital versions. Stiles said new subscribers will simply be able to choose which Variety products they want, including all of them.

‘The vision is simplicity, that all content is equal that we produce,’ Stiles explained. ‘Nothing is less valuable because of the distribution medium we use.’

To draw new subscribers, nonpaying visitors to the website will be allowed to sample four articles per month before they are required to pay.

When Variety opened its website for free in February 2007, it was aiming to take advantage of the then-booming online advertising market by drawing in the huge consumer audience interested in entertainment and selling ads targeted at them. Like many media companies, however, it has struggled to make as much as expected, particularly this year as industrywide online ad revenue fell 5.3% in the first half of the year, according to the Internet Advertising Bureau.

With its new approach, Variety is now focused exclusively on selling subscriptions and ads to entertainment industry professionals. By charging for its digital content, there’s a risk that younger members of that target audience will flock to free competitors, but Stiles said that’s a risk the company needs to take.

‘Realistically, if we carry on doing what we’re doing, there is a change 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

Company Town Blog