The Times paywall is just the start – but will readers pay?
Pic credit: Chris King
One way to boost newspaper revenues as print circulation and advertising revenues fall through the floor is to charge readers to read stuff online. The only problem is: will a generation that has grown up with free news content – that believes in a free web – cough up for it?
One man who hopes so it Gurtej Sandhu, digital director of Times Newspapers, which next week launches paid-for, fully paywalled online versions of The Times and The Sunday Times (see previews here) after many months of preparation.
He joined a panel at a Frontline event on digital media, mobile and paywalls on Wednesday to defend – in the face of some serious audience scepticism – The Times’ new strategy, and by proxy parent company News Corp’s tough line on the value of journalism and news.
If you couldn’t make it to the club this time, you can watch the whole thing here.
"We’re one of the first general [interest] newspapers to do this," says Sandhu. He said that The Times – which has just laid off around 10 percent of its editorial staff (via Guardian.co.uk) through voluntary job cuts – is "in a position where we have to do something". Some papers have tried the paywall route and turned back, such as the New York Times which charged for its online comment section and built up some 250,000 subscribers only to bring the paywall down after complaints from columnists and readers. They chickened out when they should have held firm, says Sandhu:
I think the New York Times blinked when they shouldn’t have done. It was 250,000 people, that’s a significant amount; they didn’t really fail… The ad market boomed and suddenly they felt the revenue they could generate from the ad market was far more substantial."
He also had a few words for The Times’s free content-loving rival Guardian News & Media: "The sense is that people are downloading the Guardian iPhone app and not buying the newspaper edition – it’s not an insignificant number and they only pay for it once." Having said that, Sandhu isn’t that bothered whether people read Times content via the print, desktop or mobile versions – as long as they pay. "We’re starting a journey… will it matter in the long run whether it’s a digital edition, mobile or newspaper? It’s all readership to us."
And the loss of readers that will come from lowering the credit card drawbridge on Times Online? Sunday Times editor John Witherow reckons (via paidContent:UK) that as many as 90 percent of readers could go elsewhere. Sandhu: "We don’t see that as a permenent postition; we believe we will generate more revenue through doing this."
I recommend checking our video from about 1 hour 10 minutes to get a feeling of just how hostile our audience was to the paywall plans. Perhaps it’s not the most representative focus group, but if this was a flavour of what people think, the plan could have a rocky road ahead.
Also on the panel was Marybeth Christie, head of product developement at FT.com – a business that has met with some success charging readers of news and data, albeit a highly targeted professional, business audience. Some 126,000 users happily part with £170 and more for breaking news, company data, the Lex column and the use of the FT’s mobile apps (including, yes, the iPad). "The advantage of the metered model is that we know what our users want," she said. "Those that find it most useful, our more engaged users, don’t mind paying because they like us."
Pushed by moderator Steve Hewlett to reveal how many corporate subscribers FT.com has – a market consumer papers like The Times won’t be able tap in nearly the same way – she said it was "less than half". And does a paywall hurt advertising? Not at all: "It has not hurt our ad revenues, quite the opposite. Because we have so many registered users, we now have more data on them and we can pass that on to advertisers."
Ewan MacLeod, editor and founder of Mobile Industry Review has first-hand experience of going from free to paid-for. His well-respected site for mobile industry professionals regularly clocks up 250,000 readers a month, sometimes as many as one million, and in March last year it was "bought out" by another company (I covered the story for PCUK) and went subscription-only for the steep price of £1,000 a year. "How many subscribers did I get? None. Nada. Not one," says McLeod whose site is now free-to-air again.
Here’s a flavour of what people were saying on Twitter:
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