The New York Times announced plans to charge for web access to its content earlier this year, but it looks like Rupert Murdoch's plan to "institute fair pricing for digital journalism" is going to beat Schulzberger to the punch. Today News Corp. announced that U.K. properties The Times and Sunday Times will go behind a paywall in June.
News Corp. has wisened to the fact that paid models need to offer added value. The Times' paid sites will have extra features to get the audience "to be part of it." The question is, will customers buy into it?
Before charging for access, The Times' new sites will be revamped and relaunched in May. Registered customers can preview the sites for free for a month. Starting in June, The Times' site will cost £1 a day and £2 a week. That's comparable to the paper product, which retails on newsstands for £1.
The new site, “TheTimes.co.uk”, will replace the “Times Online” brand, and News Corp. is planning to launch mobile paid applications as well.
While other publications mull over how best to implement paid models, News Corp. is betting that improved features and access will make The Times' digital news worth "the price of a cup of coffee":
"For the first time, readers will have access to all their favourite sections and writers. We will be introducing new digital features to enhance our coverage and encourage interactivity."
While it is unclear exactly how much will be new on the site, the relaunch of The Times website could provide an opportunity to add value sheerly by making the news easier to digest. As I've said before, the iPad isn't the only way to fix digital consumption of the news. There's plenty of room to improve the PC experience.
Because so many publications have subpar websites, getting the user experience right could get people to pony up. But they're going to expect more than simply the newspaper online.
The financial payout is certainly enticing. As The Guardian points out:
“Assuming that only five percent of daily users convert to the paywall system – a standard metric for paywalls – that would bring in £1.83 million if they each buy a £1 daily pass. At a 10 percent conversion, it would net £3.66 million per month for the two papers. If more people of those choose to buy the weekly pass, the revenues would be lower.”
But counting on a small percentage of a dwindling userbase is not a foward thinking strategy. Publications may be able to depend upon the kindness of reader this year. But next year they'll have to provide even more value to keep them. And on increasingly tight budgets, that becomes an even more difficult proposition. No matter, publications are hard up for money and the great paid experiment will continue forward. From News Corp.:
"This is just the start. The Times and The Sunday Times are the first of our four titles in the UK to move to this new approach."
Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.
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7:16PM on 26th March 2010
I'm interested to see how this will work out. If I'm honest, I'm hoping it's a bit of a financial disaster.
Incidentally, I come to this site via my feed reader and the 'In June' part got truncated, leaving me to believe the Times was already behind a paywall.
I would have "London Times to go behind Paywall in June" as the headline, or even "Murdoch's London Times to go behind Paywall in June."
Managing Director at BrandAlert
11:03PM on 26th March 2010
@mikebutcher at TechCrunch tweeted this today which seems an eminently sensible way to accustomise the market to paying for content: "Why has no paper tried 'pay today, but this article is free tomorrow' model? Value of news is *when* u know it. Cost of archives minimal"
12:41PM on 29th March 2010
This is going to be very hard for The Times to pull off. With so much free content elsewhere (unless every site goes down the paid for route) then people will just go to the BBC or another 'free' service.
CEO at Econsultancy
10:24PM on 30th March 2010
I've gone on record a number of times (no pun intended...) saying I think this model is flawed. For example, here's the full version of an interview I did for Channel 4 news this week.
Good to see the loyal Sun readers voicing their thoughts in the comments at http://www.thesun.co.uk/sol/homepage/news/2908580/The-Times-they-are-a-charging.html ;)
Here are some crude numbers to model this out:
- The Times has 20m unique users per month with, say 60%, from abroad so around 8m uniques in the UK.
- FT.com has around 11.4m global unique monthly users with only just over 2m in the UK.
- So let's say the Times has 4X as many users at the moment. But let's say it converts 4X less well than the FT (generous I'd say) because it is a 'business expense' in a way that The Times isn't.
- The FT.com had 126,000 paying subscribers in 2009 so let's assume The Times gets that number too in Year 1 (again, generous to assume The Times will achieve in Year 1 what the FT.com has taken many years to achieve)
- Let's assume only 50% of those subscribers renew for the whole year (i.e. *every week* they pay their £2 which, again, seems very generous).
- That would be (126,000 X £2 X £52)/2 = £6.5m
I think £6.5m is generous. And, according to some analysis I've seen, the Times online makes around £18m a year in advertising currently. I don't know if that's true but I'd be guessing it's a lot higher than £6m.
So will they lose more in ad revenue by implementing the paywall than they gain in subscriber revenue? I'd guess so.
They need a better solution. And Mike's idea isn't a bad one. The FT 'metering' model is an interesting one too. And there are a million and one other ideas.
Managing Director at BrandAlert
11:18PM on 30th March 2010
Alan Rusbridger's leaked e-mail (via the Guido Fawkes blog http://order-order.com/) is a fascinating take on this issue.