Independent website to launch paywall for non-UK readers

The Independent, which celebrated its 25th birthday on Friday, is to launch a paywall for non-UK readers, a top-priced iPad application and strip more than 70,000 free bulk copies from its circulation, in a strategy designed to reinforce its credentials as a premium multimedia title.

The paywall will initially target online readers from the US and Canada, and allow access to 20 articles for free a month with a charge for unlimited usage. Following the limited free access models of the New York Times and the Financial Times, north American readers will be charged at $6.99 (£4.50) a month.

About 40% to 50% of the Lebedev-owned title's traffic comes from readers outside the UK, with monthly unique users now at about 16 million. Senior executives say that there are "a couple of hundred thousand" of users in North America that have been identified as viewing more than 20 articles a month who are the initial target of the paywall strategy.

Last week, Independent editor Chris Blackhurst told the Guardian he believed it was necessary "to make a distinction between the UK and foreign readers. In the UK where you have a BBC it is very hard to make the case for a paywall. But hinting at what is to come, Blackhurst said there was a difference for overseas readers, who should be charged at "say, 20 hits and then you pay".

The introduction of the paywall, which is expected to launch in the next week, comes as part of the biggest overhaul of the Independent's website since at least 2007. The exercise has been led by digital chief Zach Leonard, a former senior digital executive at News International and the FT, who is also masterminding the upcoming launch of an iPad subscription service for the Independent. The service – which will launch with single issue, monthly and annual options – will charge prices as close to cost at the newstand as possible, although the final tariff has not yet been set.

The Independent already has thousands of active subscribers to its Kindle edition in the US and the UK – charged at $9.99 and £9.99 respectively a month – with little active marketing.

Bulk copies will largely be dropped. The strategy is significant because the 83,159 bulk copies the Independent distributes to hotels, airlines and stations represent 45% of the newspaper's officially audited circulation of 182,881. Only about 10,000 will be retained at the request of several companies, such as British Airways and Hilton Hotels, who would like to keep offering them to customers.

The majority of the existing Independent bulks will be replaced by giveaway copies of the 20p i – boosting its 183,677 circulation and, the newspaper's publishers hope, enhancing its brand awareness.

The publisher cannot scrap bulks from its portfolio entirely because advertising deals in place with media agencies have been struck on the basis of the combined circulation of the Independent and i, standing at about 340,000.

International distribution of copies of the Independent and the Independent on Sunday – 23,558 and 27,597 respectively – will be dropped and replaced with a new international subscription service. A large percentage of international copies distributed do not get bought, meaning it costs newspaper publishers millions of pounds a year.

The aim of the new subscription service is for every sign-up to produce a profit.

"2012 will be about prioritisation and focus," said Andy Mullins, managing director of Independent Print Ltd. "It will be about reallocating and targeting our scarce resources behind the brands and products that matter most. The Independent brand will be key to securing and building our future. i will be about audience scale and optimising the revenue taken from the traditional and existing revenue markets. Our moves on bulks and the foreign edition underpin this approach."

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