Earlier this week an authoritative, much listened to voice on the impact of the Internet on our social and economic structures, Clay Shirky, definitively dissected the recent user statistics of the UK Times and its experiment with locking its news content away behind a paywall.
In a post on his blog, Shirky, writer and New York University professor, offers no optimism about paywalls as saviors of newspapers (“The Times’ Paywall and Newsletter Economics” Nov 8, 2010).
The advantage of paywalls is that they raise revenue from users. The disadvantages are that they reduce readership, increase customer acquisition and retention costs, and eliminate ad revenue from user-forwarded content. In most cases, the disadvantages have outweighed the advantages.
So what’s different about News paywall? Nothing. It’s no different from other pay-for-access plans, whether the NY Times’ TimesSelect* or the Harligen Texas Valley Morning Star.* News Corp has produced no innovation in content, delivery, or payment, and the idea of 90%+ loss of audience was already a rule of thumb over a decade ago. Yet something clearly feels different…
Read full post here.
Continuing to keep an eye on reports about the ups or downs of Rupert Murdoch’s beloved paywall at his UK Times newspapers, I found this brief article from a couple of days ago by Peter Preston — “Murdoch’s paywall: those who leap are an engaging lot” (Guardian online, Oct 31, 2010).
Posting some stats from the latest Nielsen release on the paywall, Preston notes that the Times online traffic numbers certainly have fallen, and that only about 20 percent of visitors have opted to pay to read.
You can weave webs of relative triumph or disaster from all this. The good news for News International is that those who vaulted the wall were a bit older, richer and more dedicated to scanning the site carefully. They are the “engaged readers” advertisers admire – as opposed to the click-by-night trade who never stop to buy anything. The bad news is…
Read the rest here.
UPDATE: A much bleaker conclusion is drawn about the Times‘ paywall by Mathew Ingram writing today at GigaOM (“It’s Official: News Corp.’s Paywalls Are a Bust”).
… after four months of selling its new paywall system, News Corp. has only managed to convince a little over one-and-a-half percent of its readers to pay something for the newspapers’ content — and has only been able to convert half of that already tiny figure into actual monthly subscribers. Meanwhile, the site’s overall traffic has collapsed by almost 90 percent.
Ouch! Read full piece here.
UPDATE 2: A round-up of editors’ perspective on the Times‘ paywall — is it or isn’t it? — comes from Emma Heald at editorsweblog.org (“Times and Sunday Times have about 52,000 monthly digital subscribers” Nov 2, 2010). Reviewing the basic stats just released, Heald takes a wait-and-see attitude on the fortunes of the Times’ experiment. She includes rosier remarks of a Times spokesperson, and also cites some comments from other media folk:
Media commentators were united in frustration at the lack of a more thorough breakdown of the numbers, but not about what they mean. Roy Greenslade believes that the paywall experiment “has, as expected, not created a sufficiently lucrative business model.” Malcolm Coles, on the other hand, sees the numbers as “actually quite good.” PaidContent’s Robert Andrews, stressing that it’s still early days, said that “the small subscriptions base at least offers hope of recurring customer income.” The 52,500 monthly subscribers figure could “signal a news business that has a future,” said Dominic Ponsford.
Read more here.
Although the paying-members-only policy recently enacted by The Times in the UK reportedly has caused online readership to plummet 90 percent (see here), it’s still too early to declare the experiment a dead duck, according to a blog post by Peter Robins, media and technology editor at rival UK newspaper the Guardian (“The paywall won’t be built in a day” July 22, 2010).
Robins writes that it would be “very unwise” to conclude that Times‘ publisher Rupert Murdoch’s paywall has failed. As argument, he raises the analogy of another Murdoch publication behind a paywall, the quite successful Wall Street Journal.
The Wall Street Journal acquired its million online subscribers by following a consistent strategy for a decade…
Robins cautiously predicts that a definitive answer about the success or failure of the Times‘ paywall (if continued) won’t emerge for six months or more.
Robins does omit mentioning that the WSJ is primarily a financial newspaper and — like the Financial Times that also operates successfully behind a paywall — has a select subscriber base that reportedly is quite willing to pay for the speciality of business and finance news (see here).
Earlier post on Times’ paywall here.
Yesterday a friend tried to send me a copy of an article in the Times, the UK newspaper that is now secreted behind a paywall, its online content available to paid subscribers only.
The article, so my friend wrote, was an interview with someone whose life story reminded her of a personal situation I had discussed with her recently. So, being a good friend, she took the trouble of scanning the article into an email for me.
Unfortunately some technical glitch messed it up, and all I got was html code instead of text. I asked her to try again and I’m waiting for the re-send.
In the meantime, in spite of knowing about the paywall, I clicked on the Times website to search for the article. Immediately, up popped a page saying either pay us or go bye bye.
Annoyance compounded! How do I mean this? Months ago when I read about media mogul Rupert Murdoch’s insistence that his News Corp newspapers be swaddled behind a paywall, I felt vaguely, though truly, annoyed by what seems to me a clear outbreak of Ludditus
But yesterday, I felt a personal sting from this imposition by Murdoch that access to information be only available to those able to pay. It feels a violation of what more and more seems to be a crucial human right — open access to a free flow of information. And, furthermore, the idea that a simple paywall can restore profits in today’s complex media-scape of vast options doesn’t seem probable.
Newspaper paywalls (I hope!) are futile wishful thinking for the claustrophobic old days when circulation and audience markets were sitting ducks. Readers and viewers were imprisoned by a relatively small number of news and entertainment outlets — it was quite awful for those of us who were there and remember.
So I perked up today when I came across an interview with Internet technologies expert Clay Shirky in the Guardian (“Clay Shirky: ‘Paywall will underperform – the numbers don’t add up'” by Decca Aitkenhead, July 5, 2010). I noted especially the following segment:
Rupert Murdoch has just begun charging for online access to the Times – and Shirky is confident the experiment will fail.
“Everyone’s waiting to see what will happen with the paywall – it’s the big question. But I think it will underperform. On a purely financial calculation, I don’t think the numbers add up.” But then, interestingly, he goes on, “Here’s what worries me about the paywall. When we talk about newspapers, we talk about them being critical for informing the public; we never say they’re critical for informing their customers. We assume that the value of the news ramifies outwards from the readership to society as a whole. OK, I buy that. But what Murdoch is signing up to do is to prevent that value from escaping. He wants to only inform his customers, he doesn’t want his stories to be shared and circulated widely. In fact, his ability to charge for the paywall is going to come down to his ability to lock the public out of the conversation convened by the Times.”
I like that last sentence so much, I want to pluck it out and highlight it again:
In fact, his ability to charge for the paywall is going to come down to his ability to lock the public out of the conversation convened by the Times.
Raise your hand if you want to be locked out, again.
UPDATE – July 20, 2010: “Murdoch’s First Newspaper Paywall Not Off to a Great Start” by Henry Blodget, Huffington Post