Meanwhile, a new medium was emerging. The Internet began as Department of Defense project ARPANET when computers at four US universities were connected for the first time in 1969. People began to refer to the growing network as the Internet in 1982. In 1989, Tim Berners-Lee developed the World Wide Web software that brought an easy-to-use graphical user interface to the Internet. In 1993, Mark Andreeson developed Mosaic, a user–friendly web browser. ^[6]

On January 19, 1994, the Palo Alto Weekly became the first newspaper to publish a full version of its editorial content on the web. ^[7] Less than two years later, in November 1995, 230 newspapers were on the Internet. Another 45 papers published on private networks AOL, Prodigy or CompuServe, and another 38 were published on online bulletin board systems. ^[8]

First foray. By this time, the New York Times was well into planning its web debut. In June 1995, it hired Martin Nisenholtz as president for digital ventures. The paper’s strategic planning department had come up with three possible price points for reader access to a website. At that point, “there was no free scenario,” says Nisenholtz. ^[9] The company was deciding whether to charge customers to the new site $9.95, $14.95, or $19.95 per month.

But in the end, the NYTimes.com team decided to create the website and offer it largely for free. That was a compromise. Nisenholtz and his team of developers, in order to lure advertisers, wanted to offer content for free. But “a significant group of people here … felt that we ought to charge,” he says. So when NYTimes.com went live at the end of January 1996, it was free inside the United States, while customers abroad were charged $35 per month. The rationale was that outside the US, readers couldn’t get the New York Times , so if they wanted it they should pay for it.

WSJ. The Wall Street Journal had been experimenting with an online edition as well. In September 1995, the paper launched an online markets news update dubbed “Money & Investing.” Less than a year later, on April 29, 1996, it published a full version of the paper online. ^[10] The interactive edition at first was free of charge, but in January 1997, WSJadded a “hard” paywall (zero access without payment) of $49.95 per year for non-print subscribers, and $29 per year for print subscribers. Over the next 18 months, the Journal steadily gained subscribers, reaching 200,000 in April 1998, two thirds of them online-only. ^[11] But as would become evident, the Journal was an exception. It could charge because many subscribers wrote off the cost as a business expense; also, its print subscription base, at two million, was large.

By July 1998, only 3,200 overseas customers had subscribed to the New York Times website. “It made no sense, and so we decided on Bastille Day in 1998 to end that,” says Nisenholtz. Over the next few years a handful of other papers experimented with paywalls, but the vast majority of the industry continued to put content online for free. Most newspapers were still focused on the print product, and treated the website as a secondary place to put content.

Early adopters . But a few erected paywalls. In March 2001, a new online-only newspaper, AllNovaScotia.com, launched with a paywall. Like the Wall Street Journal , it focused on business—regional rather than national. It struggled for nearly a year, had weak subscription sales, and stopped publication for a few months to revamp. In February 2002, the Web publication relaunched. It started with two employees and grew very slowly as subscriptions increased.

Other experimenters included the Albuquerque Journal which, on August 1, 2001, began charging $8 a month (or $60 a year) for online-only subscriptions. The paper had about 100,000 print subscribers and had maintained a free website since 1995. The website remained free for print subscribers who registered. By 2003, the site had garnered just under 2,000 subscriptions and 35,000 print subscribers had registered. ^[12] In 2002, the Arkansas Democrat-Gazette , which had nearly 200,000 print subscribers, began charging $5.95 a month ($59 a year) for online-only subscriptions. It, too, had a very modest number of takers in the first couple of years. ^[13]

In August 2003, the Los Angeles Times , the fourth-largest newspaper in the US, put its CalendarLive section behind a paywall, charging $4.95 a month or $39.95 a year for non-print subscribers. The section, which included arts and culture reviews and events, remained free for print subscribers who registered. Six months later, the sign up numbers were dismal: 15,000 print subscribers had registered and 3,674 non-subscribers had paid. The paywall reduced the number of site users to 18,694 from a high of 729,000 before the paywall, a 97 percent drop. The LA Times removed the paywall in May 2005. ^[14]

Meanwhile, early in 2004 the New York Times held a meeting about subscription revenue, says Nisenholtz. “There was a sense in that meeting that the folks at the newspaper were anxious to start to charge for the web, because it seemed to be getting more and more difficult to sell newspaper subscriptions,” he recalls. Indeed, newspaper circulation continued to shrink annually. In 2004, the Newspaper Association of America counted 1,457 daily newspapers in the US, down from 1,548 in 1994. Newspaper circulation had fallen to 54.6 million from 59.3 million in 1994. Sunday circulation stood at 57.8 million, down from 62.3 million in 1994.