Newspapers know readers are flocking to their Web sites. What they don’t know, at least yet, is how to reap financial benefits from that online traffic.

One paper that has begun to exploit its online content for profit is The Scotsman. When the Scottish national daily launched its online archive last November, the newspaper believed its readers would be interested in seeing the first-ever edition of the paper, according to Scotsman.com General Manager Alistar Brown.

To that end, the paper created an electronic repository that contains every issue of the venerable daily, dating back to 1817, when the first issue was printed, through 1950. In addition, the paper, following a model similar to The New York Times, added paid opinion and analysis content to the site.

The project was not something The Scotsman entered into lightly, Brown said. Indeed, the process began more than a year prior to the launch of the paid services.

“We documented our requirements covering the whole range of archiving and digitization,” he said. “Primarily we were focused on the digital archiving and then we also started offering the paid archive and general subscription service.”

Scotsman.com deployed eMeta's eRightsWeb app (eMeta is now a division of Macrovision) to coordinate electronic payments after a review that included advisers from consultancy firm Ovum.

 “We wanted them to come up with a list of the organizations that would work for us in terms of scale - because we’re not The New York Times, we’re a reasonable-sized publisher - so we wanted something that was going to be cost-effective and that could also be scalable,” Brown said.

In addition to The Scotsman, eMeta’s software is also used by The Times, Knight Ridder, The Globe and Mail in Canada, Financial Times and Oxford University Press.

Archived and opinion information - which represents about 10 percent of the paper’s site - is currently the only pay content on the site.

Experimenting and promotions

“That’s very much experimental at the moment,” Brown said. “We’ve also done things like making the archive free for a week, or for 40 hours.”

Those promotions have proven successful and Brown said following one of the free weeks last year, 10,000 people signed up on the site. Scotsman.com also conducts extensive research to see which offers are best received.

“We did a lot of research before we launched into price points,” Brown said. “We gave different offers to different people based on demographics. We were looking at the idea of measuring response rates according to the offers in terms of the best price point. The jolly of eMeta is that it allows you to do that quite quickly - you can set up different offers for different people based on these factors.”

With the help of eMeta, Scotsman.com has also done extensive work to design its transaction pages, including strategies to minimize drop-out points. It also linked its pre-existing registration system to eRightsWeb, enabling subscribers to access both free and paid content once they log on.

Clean, simple

“We wanted to make sure it was as clean and simple as possible,” Brown said. “When we actually went live, we expected a lot of support calls, but lo and behold, we got hardly any.”

The search model on the site is free, and users pay only if they wish to view a full article. Brown said Scotsman.com has no plans to charge for additional content in the future.

“Publishers have different objectives and Scotland is a very competitive newspaper market,” he said. “I think a lot of publishers are experimenting with what content to hold back and seeing what works, but it’s also very much a case of experimenting with trying to get revenue from material and trying to bridge that gap between revenues made offline and revenues made online from readers.”

At this point, Brown said the endeavor has been a profitable one. “We are making money from both consumer and institutional subscribers and we hope to repay the initial investment in 3-4 years,” he said.

Learning from others

With its paid content model following the form of such esteemed dailies as The New York Times and The (London) Times, Brown said he wanted to create a model that would stand the test of time.

“We knew we wanted to find a new revenue channel and we also thought this was a revenue channel that will exist for a long time.

“As publishers see the rise of Google and Yahoo Premium, these search engines will start bringing together customers with this kind of material - I think it’s going to become more and more important.”

Scotsman.com’s pricing model lets users choose anything from an hourlong pass to a 24-hour pass to a yearlong pass, and Brown said it was key that pricing be kept very simple for users.

“A lot of people have done multipacks where they can buy 10 articles for $10, and they can buy an hour’s pass,” Brown said.

Scotsman.com is currently considering introducing a cap to limit abuse by users who buy a day pass and then download hundreds and thousands of articles, Brown said.

“We’re thinking of introducing some sort of cap just to rein in those people,” he said. “I also think it’s possible to drive a bit more revenue from consumers if we were to implement a slightly more restrictive policy on charging. We’ve been very generous - we’ve given people a lot of value in the model we’ve adopted.”

Per-article limits would likely be in the neighborhood of a 100-article-per-day cap, he said.