There’s been lots of debate and frantic calculations following the Times’ announcement of a £2 a week paywall. Listening to the views of members of the Specialist Media Network I’m pretty convinced it isn’t going to attract a large audience, and isn’t going to revolutionise the newspaper business model. So here’s my five reasons the Times online paywall won’t work:
1. BBC and Guardian are free
Even if you take the (arguable) view that the analysis provided by large established news organisations is somehow superior and therefore more valuable than that found on google, twitter, yahoo and any other free aggregator, how can you expect people to pay for Times news when the BBC and the Guardian are going to provide quality for free? See Rusbridger’s rant about free content here if you still think the Guardian is going to erect a paywall. I know they have a paid iphone app, but this costs £2 for life rather than £2 a week.
2. Most newspaper site visitors are casual
Only a minority of UK-based newspaper site visitors are UK, and few return regularly to the same site. Only 425k UK visitors go to the site daily, compared to 7m UK monthly visitors and 20.4m monthly worldwide. (Thanks to Jim Bilton’s excellent Circulation briefing for these stats). Most visitors arrive by search, read one article and then go. So the potential universe for subs is probably only 425k.
3. Even niche publishers rarely convert >1%
The FT is in more of a niche than the Times; yet it has taken a few years to build up 126k subscribers from 2 million registered users (6%); this would be a lower % of all visitors. Racing Post is even more niche and specialist – they now have 10k subscribers from 750k visitors – 1.3%. Successful b2b online businesses like econsultancy don’t even reach this level. So given the free alternatives of point #1 and the high level of casual visitors in point #2, the Times would be doing extremely well to convert 1% to subs, ie 70,000, and many of these may well already be print subscribers (see #5)
4. The free content/ paid-for premium services model is gaining ground
Many b2b publishers – such as econsultancy – are moving to a model where content is largely free, but then a myriad of other revenue streams from directories to data services to events and training are the drivers of profit. See my earlier post on alternative b2b paid content models for more examples. Or watch Ashley Friedlein’s views on free content and online news. A take it or leave it paywall feels very unsubtle.
5. The business model doesn’t stack up
Print subscribers are being offered online access FOC – they could easily account for half of the potential 70k online subs. The remainder might generate £3.5m pa – assuming limited churn. This doesn’t begin to replace the estimated £18m of ad revenue that the Times generates online.
Now maybe I’m being too pessimistic, but I still struggle to see the consumer demand for online news. I am however a passionate believer in the value of online niche content – see some ideas here on what online content people will pay for and several real examples.
If you’d like to pitch in to the debate, feel free to comment below, or join the Specialist Media Network on Linked in, where over 200 specialist media owners are discussing this and other topics.
About the author: Carolyn Morgan runs Penmaen Media, a consultancy creating practical digital media and marketing strategies, with particular expertise in specialist media. If you are wrestling with your online content strategy, feel free to contact us for an initial discussion. Carolyn is also Content Director for the Specialist Media Show, and has assembled a conference programme and workshop sessions tackling a range of strategic issues for specialist media owners.