The Times’ Paywall – Can It Work?
(please note you can listen to an audio blog post on this theme by clicking the link below)
So here we go. A paywall it is. After much speculation, we learn that News Corporation’s two flagship titles in the UK, The Times and The Sunday Times, are to start charging users to access online content from June. No freebies, no tiered access models, just a paywall. And the price, at £1 per day, is the same as the cover price of the print edition.
The Times.co.uk (note, not Times Online, its current moniker) is primarily intended, it seems, to add value to the core product, the print newspaper. Of course the risk Murdoch’s team is taking is in sacrificing scale for an untested revenue model. What kind of conversion rate would make this viable? There are few precedents, though in the gaming world, a paid conversion rate of 2% would be considered successful. And even the Financial Times, the self-styled pin-up boys of the paywall, have found that only around 121k of the 1.9m who have registered for the site, are paying subscribers. That’s just 6.4% of registered FT.com users paying for content which helps them do their job, and which they often expense anyway. What chance for a generalist title competing with free rivals?
Even assuming a 5% conversion rate, that would mean 60k from a daily online readership of around 1.2m (according to the ABCe figures). Factor in that around two-thirds of the readership are outside the UK, and advertisers locally will be left with a readership of around 20k. Advertisers may say they value engagement over scale, but will they actually come on board? Even if current revenues are disappointing, they are going to be hit hard by such a diminution of scale. And the costs of delivering a high quality website will still need to be met.
It’s easy to criticize. After all, what are publishers to do if users won’t pay for their expensively acquired content. But it remains to be seen if this model effectively can generate more revenue than other models, whether they offer tiered access, or additional exclusive content , or try and build additional new revenue streams (such as ecommerce) around the core news brand.
It’s a bold move, of the type we’ve seen before from Murdoch. But does that guarantee it will work? The jury’s out for now. But partly it depends on how his competitors respond. In the UK The Guardian, The Telegraph and the Mail may benefit initially from those unwilling to pay for The Times online. But also on the horizon, and also announced today, is the prospect of the polar opposite of the News Corp model, from The Independent, under its new Russian owner Alexander Lebedev.
The Indy, with a loyal but small readership, has struggled to make an impact either in print or online, lacking the resources of its rivals. But Lebedev has already revitalized London’s daily paper, the Evening Standard, through a commitment to both decent journalism and the ultimate disruptive model – he scrapped the cover price. With The Times putting up a paywall, will Lebedev be tempted to outflank them and offer The Independent – in print and online – for free? We’ll be returning to the topic of how publishers can monetize their content in a number of reports later this year. Watch this space for further updates.
To hear more about my thoughts on the issues discussed in this blog post please listen to the following audio blog post. Just click on this link to listen.