By Nicola Brookes, Atex Communications Manager
Posted on December 16 10:46, 2011
It's been a year and a half since News Corp adopted paywalls for The Times and The Sunday Times. So how has this changed the industry, and is the paywall model the future for online publishing?
Speaking to Brand Republic, Abba Newbery, News International's director of advertising strategy, said: "We're on a journey and it's more complex than simply labeling our approach as a paywall. We’re moving beyond the simple paywall model. Somebody had to be first to market with an approach to counter declining print circulations. Looking around, we see that every newspaper with an iPad app is now charging for the content. Would you say they've all gone with a paywall strategy? It's great that we're all now involved in a like-minded journey and, as the forerunner, it's no surprise that the technology development division of News International is the fastest-growing area of our business."
The Financial Times was the very first paywall pioneer, erecting a metered model in 2007, which allows readers to sample its specialist content for free before a charge is imposed. Its success is well documented, with an online base of 3.7 million registered users and upwards of 230,000 paid subscribers. The New York Times has adopted a similar model, allowing viewers to read 25 free articles each month, before being locked out by the paywall. However, this makes it easy to circumvent – keen readers can just read the newspaper on their phone or tablet when they’ve met their limit on their laptop, so there’s less incentive for anyone to sign up.
The Times and The Sunday Times took this a step further by adopting the paywall for all site content – no free article previews are available and therefore, none of the content is indexed on search engines. This was a brave move and one that made most other publishers sit up and take notice. Understandably, with the newspaper industry as it is, publications are being driven to try out new means of generating revenue, and who better than to experiment with the paywall, than The Times, who certainly has the reputation and following to make this a success. Indeed, the company believes it has selected this model to its advantage. By being able to prove that readers are fully engaged and responsive, its loyal advertiser base can employ targeted advertising to an equally loyal reader market.
The latest figures show that The Times now has an impressive 112,000 subscribers, compared with 79,000 in February. The Sunday Times boasts a similar number, peaking at 105,594 in September. And this is expected to steadily increase.
Although the sites have experienced the inevitable drop in traffic since the paywall was implemented, (20 million digital readership prior to its launch), the figures are encouraging and in contrast to the industry trend of declining circulation.
It does seems that many loyal readers will pay for their digital journalism, but naturally others will jump ship. The Mail Online, the UK’s most popular newspaper website, now claims around 79 million monthly users, a figure which sky rockets whenever major stories are broken. It would be surprising therefore, if the paper started charging for online content, at the detriment of millions of readers.
The problem is of course, that there will always be free alternatives to sites hidden behind paywalls. There will always be opportunities for publishers to charge for specific content, but implementing a paywall for all content might only serve to solve revenue headaches rather than act as a successful growth strategy. The Sun talked about implementing a paywall a number of times this year, but this has been delayed, and actually might not happen at all. Instead, the paper has looked at other ways of monetising content. This currently involves its gaming portfolio, including Sun Dream Team and Sun Bingo. Other means have involved branching into social networking, like the Sun’s Football Legends game, where players can make payments with PayPal to send virtual gifts to their friends.
Other possibilities for achieving online revenue growth include licensing the platform to developers via an open application programming interface, and offering non-news products, such as e-books and running events that draw readers to real-world get-togethers.
So is the paywall sustainable? Well for a start, journalists working under this strategy have changed the way they produce content. They no longer have to worry about using keywords for SEO, something that’s usually important when it comes to linking ads with articles. This also makes the model more difficult to reverse. With other online newspapers boasting larger circulations of a similar demographic, there is also a risk that advertisers will start to look elsewhere. However, Eve Samuel-Camps, UM London head of press, is optimistic. She told Brand Republic: "The luxury clients really like The Times and Sunday Times online environment because they're not having to chase numbers. They're getting quality data in a controlled space, so no doubt they're willing to pay a premium in order to better target a specific demographic.
"Consumers are growing more comfortable with paying for quality content and there has never been an issue with paying for apps on tablets. But News International needs a greater number of assets to make it work financially. Then they can create bundles, which will better serve a wider advertiser base. Personally, I hope they find a way to make it work as this is a real opportunity to move digital newspapers and online content into the 21st century."
So, charging for online content seems to be working so far for The Times, Wall Street Journal and The Economist, but it’s not a strategy that every newspaper is going to be able to duplicate, since these outlets have a very targeted readership. If this is to be rolled out further afield, we need to continue to shift the mindset of consumers, who expect to pay for digital content through apps, but still aren’t used to paying for news.
