REFILE-Polish publishers team up to get readers to pay online

By Adrian Krajewski and Chris Borowski

WARSAW, Sept 6 (Reuters) - Poland has become a test bed for a new subscription model for Internet content that media companies hope will allow them to convince users to hand over cash for online news they are used to consuming for free.

Starting this week, most of Poland's leading publishers are joining forces by pooling their content behind a combined paywall that will charge readers for access.

Unlike other subscription models that include only one or several titles from the same publisher and have mostly failed to catch on, the new approach resembles cable television, where users are charged a flat fee for access to various channels.

The scheme is run by Slovak startup Piano Media, which launched similar projects in much smaller Slovakia and Slovenia. But Poland, with its 38 million population, is the first time it will be tested in a major media market.

If the combined paywall succeeds, Piano hopes to conquer western markets, where only a handful of newspapers and magazines like the New York Times and the Financial Times (owned by Pearson Plc ) have been able to attract enough paying subscribers to justify a plunge in readership.

"Poland is the place where we can show that this idea can work in a large market," said Tomas Bella, one of Piano's founders and its general director. "Our next step will be western Europe or an English-speaking market."

To avoid scaring away most of their readers and advertisers, as seen by News Corp.'s The Times and others when they introduced restrictive paywalls, only a small portion of the content will be locked away at first.

On the home page of tabloid Super Express, a small key resembling a colourful piano keyboard that designates paid content appears next to only a handful of articles from some sections, including gossip and opinions.

Readers in Poland will have to pay 19.9 zlotys ($6) per month for access to locked content or to listen to higher- quality audio streamed by the state radio broadcaster.

Piano will take a 30 percent cut.

LOST INCOME

Newspapers around the world have seen circulation plunge as readers switched to lighter news on the web or tuned out completely. Revenue from online advertising has not made up for the lost print income.

Agora, the publisher of Poland's top broadsheet Gazeta Wyborcza, which has seen its circulation drop by two-fifths in five years, said it joined the project as the new approach is convenient to users and has been tested in smaller markets.

"Time will tell in what form users will be willing to pay in the future," said Michal Gwiazdowski, in charge of Agora's digital strategy.

Some Polish media groups have remained on the sidelines and others say they only expect marginal income from the project they hope will test interest among local readers.

"We are not seeing a large flow of cash from Piano, but thought we won't lose much by taking part," said an executive at one of the Polish publishers. "I'm not sure if this will work for all types of publications."

Poles questioned in the centre of Warsaw said they were not aware of a plan to charge for news on the web, but most said they were not willing to pay.

"Paid subscriptions have no place on the web," said Agata Rudniewska, a student in Warsaw. "The Internet has its own rules. If I can't get the information for free, I'll just look for it on another website."

Piano hopes to roll out its service in one more market in eastern Europe by the beginning of next year and then move on to western markets.

Bella said in other places Piano could focus on specific regions, metropolitan areas or subject areas instead of a nationwide approach.

Piano is keeping expectations low, saying it is not a miracle cure for ailing media companies and instead aims to lay the ground for a steady income from online subscriptions.

"The majority of people will never pay," Bella said. "Our realistic estimate that 5 to 15 percent of online population will be paying within five years and this will bring huge money for publishers."