Yesterday, the Telegraph announced the introduction of a 'metered paywall' which allows visitors to read up to 20 articles before having to subscribe for more.
There are two options: a 'web pack' which allows access to the website and content via apps at £1.99 per month, and a 'digital pack' which adds tablet access and loyalty club membership at £9.99 per month.
But can a paywall ever be a good idea for a general news site like The Telegraph though? And how will it affect the newspaper in terms of SEO and traffic to its ecommerce pages?
Can the Telegraph emulate the FT model?
The FT has a similar metered model, and this seems (from the outside at least) to be working for the company.
According to recent stats, FT.com increased its digital subscriber numbers by 18% in the year to 31 December 2012, to almost 316,000, bringing the total circulation of the Financial Times to 602,000.
In addition, FT Group reported sales of £443m, up 4% on 2011. Annual sales revenue up was up 5% to £6.1m.
However, FT.com offers specialist information for subscribers on a range of formats, and can charge far more than The Telegraph is attempting to, with subscriptions starting at £295 per year.
The problem is, The Telegraph has less of a USP as it cannot offer the same specialist content as the FT.
Can paywalls ever work for mainstream news sites?
News International has been relatively coy about its digital subscriber numbers, but it seems that its traffic has been severely affected since the pay barrier was introduced.
ABC figures are no longer available for the title, but stats from the NRS PADD survey suggest that just 675,000 people are reading The Times online, with 7.9m reading the print version. The same figures, from November 2012, give The Telegraph almost 6m online readers.
Perhaps 675,000 digital subscribers (if there are that many) is enough for the newspaper to consider the paywall success but, in the absence of figures, this is guesswork.
However, the key problem may be the willingness of people to pay for the kind of content they can get on several free news sites already. The FT's model works because it offers specialist content and has no obvious free rival, but this is not the case for The Telegraph.
While £1.99 per month isn't a lot to pay, web users have been conditioned to expect things for free, especially general news content. This is the hurdle that The Telegraph has to overcome.
How about SEO and ecommerce?
With a paywall, there is a risk that, as pages are hidden behind these barriers, the search engines aren't indexing them, and rankings could fall.
This doesn't necessarily have to be a problem, and the metered model adopted by the Telegraph should be less harmful than the stricter version as used by The Times.
Here, we can see that FT.com gets around this problem and its articles are indexed by Google:
According to Search Laboratory's Head of SEO Jimmy McCann:
If done in the right way then it (a paywall) shouldn't be a problem for search engines. FT.com is a good example of doing it properly - I think they use a cookie based system so as a search engine cookies aren’t applicable.
Paywalled content could also use user agent detection to serve a search engine the full content and a human another though this is very risky, as it can look like cloaking.
However, The Times is likely to be missing out, as it only shows the first couple of paragraphs, meaning less content for the search engines to index:
So, in this respect, the metered paywall is the better option, as it should minimise any potential SEO losses.
However, metered paywall or not, people will be less likely to share articles on social media or link to the Telegraph's content, as many won't want to send readers straight to a paywall.
Then there is the problem of The Telegraph's ecommerce pages, which rely in part on the traffic sent by its editorial content, and on the search rankings that content brings.
For example, The Telegraph has holiday deals which are linked to via the sites travel section, and it's possible that the newspaper's ability to promote and sell these deals will be adversely affected by any restrictions on access.
Is there anything to be said for The Telegraph paywall?
It could just be that the metered approach may preserve enough of The Telegraph's traffic while ensuring that enough of the paper's 'dedicated' online readership are encouraged to subscribe.
Martin Belam makes an excellent point on his blog:
The (Telegraph's) numbers will almost certainly say that the average number of pages viewed per user per month is between one and five, or something of that magnitude. The only people who will get caught up in the twenty articles a month bracket are super-users and loyalists, who may be tempted to add a print subscription into their package, and can certainly be marketed in that direction over the coming months.
So, perhaps the Telegraph has done the maths on this issue. Indeed, according to Peter Preston in The Guardian, when it added the same paywall for international users, only one in ten users failed to sign up for the charge.
If true, this bodes well for the newspaper's strategy, though there may well be a big difference between the international and UK audiences.
According to Alex Moss of 3 Door Digital:
Paywalls have a negative effect on SEO. Pages are still indexed with the title and there can be (as The Times do) have some introductory content. However, this is not enough to make these pages rank as well as a full article from a competitor. However, ranking doesn't indicate ROI, and this is really what it boils down to.
Providing free content is great and will help rankings, but is there a value in that? Paywalls are clearly a strategic decision that cannot be taken lightly. The advantage for The Telegraph is that it already has an established reputation and some of the current readers will use this paywalled service. This return may actually be more beneficial than ranking in the first place. Providing free content is great but it is clearly coming at a cost.
Only time will tell if this strategy works for The Telegraph. For me, when there are so many free news sources out there, the average newspaper site's content may not be compelling enough to attract any more than the loyalists as subscribers. Consequently, traffic and ad revenies are likely to drop as a result.
I also think that newspapers should consider other monetisation options, such as affliate links and ecommerce add-ons, as well as evaluating the value of 'open' pages, before they head down the paywall route.
However, it could be that The Telegraph has made these calculations, concluded that it cannot grow traffic any further and that the ad-funded model isn't working for them.
As reported today in Marketing Week, The Sun is planning its own paywall later this year, to coincide with the launch of its Premier League highlights package.
Perhaps this will be a compelling enough propisition to encourage digital subscriptions, but it also suggests that News International doesn't believe people will subscribe for news alone.
If, as Martin Belam suggests, the paywall doesn't kick in for the majority of visitors, while super users sign up (and £1.99 per month isn't such a steep price) then it may be able to find a balance betwen free and paid content.
What do you think? Is this a smart move by The Telegraph, or a desparate throw of the dice?