Cash-strapped fishwraps all over the world are watching the Times of London’s new content paywall business model. How’s that working out for them? Depending on how you look at the numbers and whether you value total visitors or pageviews, the newspaper, owned by Rupert Murdoch’s News Corp., lost either two-thirds or 90 percent of their online readership since the pay walls were erected.
That’s about standard for general-interest publications (as opposed to more niche publications like News Corp’s own Wall Street Journal) that erect a paywall. Executives expect
The figures are also unlikely to surprise some executives at the Times: the Sunday Times’s editor, John Witherow, predicted in May that “perhaps more than 90%” of pre-registration readers were likely to be lost once the registration-only service was implemented.
An outside estimate claims that there are about 15,000 paid subscribers to the Times, who would generate £1.4 million ($2.1 million) per year if they maintain their subscriptions and pay the £2 ($3) per week recurring subscription charge.
Fortunately, one of the Times’ most worthwhile offerings, John Oliver and Andy Zaltzman’s delightful podcast, The Bugle podcast, remains free. For now.
Murdoch’s Times Web Visits Drop to One Third as Paywall Starts [BusinessWeek]
Times loses almost 90% of online readership [The Guardian]
Get Ready To Pay For Your New York Times In 2011
Newspapers Aren’t Quite Sure Whether You’ll Pay To Read Their Stuff Online
Miami Herald Stops Asking For Handouts
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No such thing as a free lunch.
I’ll see that & raise it with a “Information wants to be free.”
I have no adage to reply to that, but while information may be free, gathering it and presenting it definitely costs money.
That’s what advertising is for.
I’ll agree that information should be “free to all.” But how are you supposed to compensate the people who gather that information and report it, for a living?
I am not in favor of a subscription model for internet news services. I don’t think it’ll work and I’d never pay for one. But I’m not sure how reporters are supposed to get paid if the company they work for doesn’t have any money coming in.
man how are all those Google employees going to eat?
You adapt your busines model.
They’ve done that here, but gone in what can be (and probably is) the wrong way.
Despite what many people tell you, big businesses have no more right to ‘make money’ than small ones, or anyone else for that matter. How are they supposed to make money, by offering a product in demand, at a price the market will take. Alas the news market is rather full, with a lot of cheaper alternatives.
“The first rule for the industrialist, is to make the best goods possible, with the highest quality possible, while paying the highest wages possible.” — Henry Ford (slightly misquoted due to poor memory)
Yes, but if no one shows up to eat, is anyone having any “lunch” at all?
True, but for a lot of people, news sites are like a snack at the Sams Club: you don’t need them, but if they are there, then why not eat? You want me to pay for this? I’ll go to Burger King and get a real meal. If you want to charge for your paper, then you better have something of value, not just cheap stories copied from everyone else.
The Times isn’t offering anything unique in the marketplace. Demanding payment for what others give away for free is a surefire way to fail in business. So, sure there’s a free lunch – that’s what pretty much every other news source on the Web is offering.
Well, pay for one site, or visit one or more of its many free competitors…
While I sympathize with the fact that it takes a ton of money and resources to run a news website, the whole “pay wall” thing has proven to be a very poor solution for revenue generation.
That said, I would love to see the entire Murdoch news organization fall flat on it’s face.
Holy crap, for the first time in months I was able to download The Bugle straight to my iPhone without any “server not configured properly” or “this cannot be played on this iPhone” messages! Happy day!
…and of course, they’re on vacation this week.
Which, if you think of it, could be a metaphor for quite a lot of things in the UK…
Ah the follies of corporate thinking. They go from one unviable business model to another. They refuse to give any thought to what it would take to make their own business viable.
But what is a viable model? This isn’t exactly an easy thing to figure out, and you can say it’s the “follies of corporate thinking” (whatever that means…), but nobody seems to have figured out where this is all going yet. I don’t think Times of London is wrong for trying a paywall again, even if it’s unlikely to work. Money has to be made somehow.
Sadly, I suspect the future model will likely be more bloggy, more tabloidy, which isn’t necessarily good.
I don’t know what a viable business model for newspapers on the Internet would be. But … I don’t have to know. I’m not in that business. It’s not my job to figure one out.
It is, however, Murdock’s. He IS in that business, and he DOES have to figure one out. I furthermore suggest that relying on 15,000 paying subscribers, in a city of millions which is known worldwide, is NOT viable.
As for what “corporate thinking” is, it’s any dysfunctional or even counterproductive planning in a large business, especially when that planning coincides with something which is “in vogue” elsewhere in the industry. Currently many papers are considering “paywalls.” The NY Times will erect one in a few months, and that’s just one of many which are making such plans.
They’re all doing this, without even attempting to figure out if it’s even workable. That’s what corporations do … dumb things that appear to be a good idea if one is only concerned with the bottom line, but which might not work out in reality.
Right, I was reminded of Phill Bronstein’s appearance on The Colbert Report in May 09, talking about this. (Former Editor of the SF chronicle, and now VP at Hearst Newspapers, or was when this was done).
He believed that people should be put in jail for ‘infringing the copyrights of the newspapers’ (ie, reporting the news themselves and putting them out of a job)
Here’s the clip – http://www.youtube.com/watch?v=ybU4vevkMUI
Quote ‘maybe we should have a jail term for people that don’t pay for their news’ endquote
So 10 percent of the readers pay? I’d say that is a pretty good result. If the company is expecting more, they are fool.
Well, believe those 10% include the subscribers of the dead tree-version who get online access for free?
That’s something that seems to be repeatedly missed by analysts. A smaller number of paying customers is better than a large number of freeloaders, particularly in a market where advertising revenue is not enough to pay your bills. Traffic does not equal revenue. If they can get 10% buy-in, that’s a major victory.
I am one of those people that really enjoyed reading the TimesOnline. It kept me up to date on most things British. But, when they switched to a “pay as you go” site I said enough. There are simply too many other “free” sites for me to read. Their stories will be missed.
I enjoyed reading a number of their writers, Jeremy Clarkson and India Knight among them. I hope they drop this paywall nonsense soon.
Meh… Newspapers are so 20th century. There’s nothing wrong with charging for access, but they need to make sure that the product is worth being paid for.
If the newspaper is “20th century,” then I fear for the 21st century.
I like my news in less papery form. News itself is still fine.
Lack of paper is fine and all, but it’s hard to argue that the bloggy model of news is giving people more accurate, higher-quality access to news.
Don’t get me wrong, I like blogs (that’s clear enough right now), but the professional news arbiter role played by newspapers and other traditional outlets is incredibly important. I’m still not convinced that our news is getting “better” on account of technology.
How does no news on paper instantly equal blog?
What do you think it equals?
We’ve seen time and time again that newspapers can’t make enough money online to pay a news staff to produce good stories. So what’s starting to happen is that newspapers are being replaced by blogs, where advertising can pay for a few people to spend very little time doing very little work to “report” news (really, to just find other news and re-post it). If that’s all they can afford, that’s all they can do.
Newspapers is now a niche market. Let me repeat… Newspapers is now a niche market. They will survive since there will always be some need for paper printed news, but at about 1% of what it was in the past. I could be wrong, it may be about 1/2 of a percent. My point is news is not a scarcity anymore. Now, if the newspaper industry can define news such that the government can control and regulate who can report news and who can distribute news, NOW we have a viable business model. (God I hope I’m being funny and no one ever takes this seriously). But this is what it will take. News will have to be licensed and regulated. Reporters will have to be licensed to report news and publishers will have to regulated as to what is news and what is not news. And if this ever happens, I apologize in advance for spelling this out.
How about micro-payments? Or something fairly cheap. Besides bandwidth, it is fixed costs, so they could offer $20-$50 a year and more than triple their $150 subscribers. It might not work for all, but a good quality news source could do well just by having huge numbers and charging a little.
The Guardian article only refers to “registration” but uses “paywall” in the headline. Very confusing article in that regard.
I don’t care where my news comes from. If I click on a link and there is a paywall, then I just move on. If I was an advertiser I would stay far away from paywalls, at least pay a fraction of non-paywall ads.
Hmm. If $3 per week isn’t reasonable, than what is?
.02 cents
Do mean 2 cents ($.02) or do you actually think that 2/100th of one penny is what it would be worth? Either price would certainly be more in tune to the product.
This was a reference to an old Verizon or AT&T CSR who didn’t understand the difference between $0.02/Killobyte and $0.002/Killobyte while also conveying that it’s not worth very much.
I would not mind $3/week – IF it covered all the news sites. On an average day I visit twenty newspaper web sites such as London Times. Sydney Herald, St. Louis Post-Dispatch, New York Times, Washington Post, Daily Telegraph], Daily Mail, Orlando Sentinel, Orange County Register, DNAIndia… No way I could afford to pay each for subscription/regristration.
If Drudge was a pay site, I’d have to pay. I do pretty much the same thing as you.
No one ever paid for news. Ever. If you think your business model is to get people to pay for something people don’t pay for, you deserve what you get. People pay for access. In the old days, access was a tangible news paper or magazine. The value was delivering the information on tangible media. Fast forward to the year 2000, people now pay for their own delivery mechanism and no longer require paper media to have the information delivered. The information is ubiquitous. The delivery costs are so close to zero, it really isn’t viable to charge for delivery. So where is the value that old publishing houses and newspapers give? That’s a very good question that I’m not prepared to answer.
If you say reporters, I say no. Reporters have their own value, they don’t add value to the media companies since anyone can be a reporter and the barrier to entry is almost zero. There is no reporter out there who is so good that no one else can’t substitute for them. Thus you have an unlimited number of possible reporters able to deliver information using a medium that is almost free. Again, I ask, where is the value?
“If you say reporters, I say no. Reporters have their own value, they don’t add value to the media companies since anyone can be a reporter and the barrier to entry is almost zero. There is no reporter out there who is so good that no one else can’t substitute for them.”
It’s not just reporters, it’s editors, and the whole infrastructure. While anyone can be a reporter at the most basic level (or at least anyone literate), anyone can be a NASCAR driver too – it doesn’t mean they’ll do it well.
Our local paper is full of recycled content that I’ve mostly seen before I get it, online, on other news sites. And their own site is horrible. I still buy the Sunday paper, but mostly for the ads. I can’t justify the expense of getting the daily although I used to enjoy it.
Their Sunday delivery was so bad–missed drops and outsourced customer service–that I had to cancel it and now I go up to the gas station and get one.
I don’t believe ANYONE actually ever feels sorry for Rupert Murdoch.
Pay walls have been tried before and generally don’t work. I get the Wall Street Journal’s morning email of stories and about half are behind the pay wall. I’d subscribe if there was a monthly option but it’s over a hundred dollars a year and that’s two months of my ‘silly internet/amazon purchases’ budget (this month I discovered you can get many used books at amazon for $4, so I bought ten).
The problem with the legacy media is that they haven’t figured out that the old income streams aren’t coming back. There’s a link in the comments (hat tip ktetch) to a newspaper exec that said “maybe we should have a jail term for people that don’t pay for their news.” When Katrina happened, I watched CNN with my parents and read blogs of people who were there. Nowdays I’d check out Twitter and blogs. There are a few bloggers (Michael Totten and Michael Yon are the best and Robert McCain is also great) that actually go to where the War on Terror is being fought or where national stories are emerging and report on it… as long as people donate enough money to cover air fare. It works for them and I can see Google or even Drudge hiring bloggers/reporters to create content.
The answer to the legacy media problem is to be innovative. If you have Netflix for $9/mo, why would you ever pirate a movie? There are internet radio sites that stream to your phone or MP3 player so you don’t need to pirate music. The future lies towards refining that model. If Murdoch created a site that let you access his papers and Fox shows and Fox News, it’d be worth a subscription, easily. A few of the big talk radio people have subscription models that let you download any show or get video or an extra hour of content a day. That sort of thing is the future. RIAA/MPAA lawsuits and paywalls are the way to irrelevance.
Sorry about the length. Didn’t mean to write a book.
News to newspapers – paywalls don’t work. Support yourself with non-intrusive advertising vis a vis Google. But put up interstitials, popups, popunders, breakups, slidethroughs, banners, and all the other crap, and I’ll just run adblocker…
Someone, somewhere will always post some news. No need to pay for that crap.
Unfortunately, the market is crowded with news sources. Once other organizations become hip to the idea of charging, things will change. News, as an ongoing concern, can’t be “free”. It takes real money to provide in-depth, long-term investigations and to send people around the world to report on events. Bloggers fill a niche, especially for analysis of published information, not for original research.