The Times’ Paywall Failure: Are You Paying For Marcotti?
We’ve been tracking the problematic future of journalism here for some time, from our sketch of “The Illustrated Possibilities for Good American Soccer Writing” to comment on the decline in the Guardian’s world football coverage and on the then-impending paywall being put up by Rupert Murdoch around The Times’ of London’s content.
Now the first reports are in on the success of The Times’ paywall experiment, begun on 2 July: and, well, “success” would be stretching it. Dismal failure might be more accurate. The Times has lost 66% of its internet traffic, and has attracted a mere 15,000 paid subscribers (plus 12,500 iPad subscribers). And right now, those subscribers are only paying $2 a month on The Times’ introductory rate; how many will remain when the normal subscription fee of $16 a month kicks-in? The likely level of The Times’ revenue from this (given lost advertising revenue as well) is not going to cut much into their losses running into hundreds of thousands of dollars per day,
I’m not surprised the numbers are low, and it’s doubtful this experiment will see out the year, especially with no other major British newspaper close to following suit.
As we commented months ago, The Times’ problem is the downmarket direction it has gone in under the control of Rupert Murdoch: its content is nothing special. Its football coverage is extensive, but aside from Gabriele Marcotti, is undistinguished. Its middle-of-the-road coverage runs throughout the newspaper. There’s just not much value to it with the alternatives out there for free.
Value in content — in terms of what people will actually pay for — comes from covering a niche with essential information for professionals who cannot easily obtain it elsewhere; that’s why the Wall Street Journal (also owned by Rupert Murdoch) has a successful paywall, and so does the SportsBusiness Daily. If you need that information and analysis to do your job better (or at least, you or your employer thinks you do), you can succeed. Very few people need The Times when they can have the content of The Guardian, The Telegraph or The Independent for free, contrasting as they are in editorial direction.
This is all blindingly obvious. Except, apparently, to Rupert Murdoch. And the search for the future of paid content goes on.
The relative success of the WSJ and FT’s paywalls isn’t just down to the nature of the coverage they provide, it is also grounded in an economic reality in which corporations and professional firms have long considered paying for their employees’ subscriptions to those papers to be a legitimate cost of doing business (and one that they can deduct for tax purposes without it’s value being seen as income to the employee (at least in the US)).
No general newspaper has been able to count on the same captive user base.
You can get quite a bit of The Times’ football coverage (specifically The Game, Marcotti’s column included) without paying. Just follow a link to it from google and I can read without being “paywalled”. Works for me anyway.
Oh and Oliver Kay is an excellent football reporter, please give him his due.
Chris — there’s a bit of an irony there between your first and second statements. Oliver Kay is a decent enough football reporter, but if someone who enjoys reading him like yourself isn’t keen to pay a few quid a week to support his work, as his employer wants you to do, it reinforces the point here.
I’m pretty sure you’re incorrect that you can find current Times content through Google, though. Their archive is, sensibly enough, accessible from search engines. But a search for “Marcotti” on Google or Google News, for example, does not bring up any recent columns on The Times’ website. Unless I’m missing something.
I almost subscribed to this new system when it started up til I saw how much the price went up to once the intro offer was over, totally didn’t feel it was worth that much money overall seeing as I don’t read the Times everyday & even when the site was free I didn’t visit it enough to warrant spending that much. The most I’ve done is buy the £1 a day access once just to read theGame on one Monday with Marcotti’s webchat & all that jazz…that was pretty good though I haven’t done it since. Maybe once the Premier League season starts up again I might do the £1 a day thing every now & then but then I only ever really read the Sport section (and even then only the football & tennis sections) still not sure that’s worth bothering with as of yet.
Hopefully the Times do see it’s not working out & drops it sometime down the line. At the very least hope no other newspapers here follow suit with this paywall business.
Gemma,
A very interesting point – your approach seems to be the “casual newspaper purchaser” approach, whereby like me back in the day, you sometimes bought a newspaper but sometimes didn’t. In that sense, newspapers have gotten lots of internet revenue from casual readers who otherwise wouldn’t have bought the paper on that particular day – I just can’t see any other newspaper than the WSJ really pulling it off, though. And wasn’t the NYT considering a paywall at some point?
Well, I disagree with you that the Times is much inferior to the Guardian, I think of the four English broadsheets it’s much the best. I think the Guardian’s football coverage (Sid Lowe aside) is mediocre (too much lame opinion) the Independent and Telegraph even worse. Still wouldn’t pay for it though!
Elliott — NYT did have a paywall in the past, but they removed it under pressure from its star columnists who weren’t too chuffed with the mass exodus of eyeballs. I believe they are looking to re-introduce some model of paid content by early 2011.
I don’t much care for paywalls or think that they will succeed unless there is a niche market to be exploited or there is no alternative. And even well written football articles and opinions do not seem to be very exploitable. But there are a couple of implications for the numbers that you quoted and downplayed.
Firstly if there are 27,500 users who have demonstrated a willingness to consider paying something each month then I would guess that a proportion of those users will stick with it at after the introductory period. The real barrier to entry is always getting people to pay anything, once customers agree with the principle of paying then, like on the iPhone or Android phones, there is a market.
Once a market is established the real money will be made if its competitors, like The Telegraph and The Independent (which is always in need of cash) also decide to go behind a paywall. If the market is there then they must be tempted. And if The Times is pulling in millions of dollars a year then they will be tempted.
If 10,000 readers pay $4 per week (the current non-introductory price) then that is $2m per year in revenue and a captive audience to exploit. That is not an insignificant start point and cannot be dismissed lightly, even if earlier experiments have not all been successful.
Tom,
I think your analysis is a bit short-sighted. While The Times has indeed seen a drop, there’s little impetus for regular readers to sign up and pay right now. We’re entering the dog days of summer–post World Cup, before the new season dawns. I also think people vastly overestimate how much the Times makes via online advertising on its football section.
If this trend remains for the next 12 months, I’ll tip my hat. But I don’t expect that to happen.
And yes, I did pony up, as much as it killed my wallet. I enjoy the Guardian and Telegraph, but I prefer the Kay/Ducker/Barclay team.
The Times paywall might be less than successful, but I, like you, was brought on this simple principle, ‘if something has value to you, someone, somewhere wants a consideration for it’.
The paywall experiment seems so obviously doomed to fail that you have to start wondering whether somehow that was the plan.
What if the plan was this:
Step 1) Establish that the current online model of free content with advertsiing doesn’t work
Step 2) Apparently have a really good stab at deploying the paywall
Step 3) Paywall only attracts X number of paying users… it’s the best we can do… but that’s all we can get…
Step 4) Announce major staff redundancies and new business model where well-known writers’ contributions are aggregated into a kind of mega-blog and most of the news staff are cut.
Murdoch has radically reduced staff before… eg battle with print unions… is this actually the first step on the road towards a vastly reduced editorial staff? Can’t see any other direction this can go.
The news in The Times is not even remotely unique. Their unique offerings are the editorials and the opinion pieces. The quality of these is more often than not remarkably poor. Even their best contributors write a great deal of drivel that is a waste of time reading. It is a rare day when an opinion article in The Times is really worth reading, let alone not worth paying for.
I think the reported 66% to 90% drop in web traffic understates the effect of the paywall by a large amount. Months ago, the typical visitor looked at 2, 3 or 4 pages. Today, you can see the front page and when you click on a link you see a second page that invites you to pay. So even people who are shut out by the paywall will still register as visitors who see two pages even if they just look at the front page and click on a link to see if the paywall has been abandoned. It is also the case that everybody with a subscription to the printed edition gets a free pass to the on line edition. The suggestion is, that so far, 15,000 people have signed up to the subscription offer of £1 for the first month and then £2 per week. If these figures are correct and if they remain that low, then losing perhaps 90% to 98% of their on-line readers for perhaps £2 per week from a tiny minority values the lost readers at a mere 2p to 4p per week each. When you consider that a single Google Adwords impression can cost 20p and more, you have to wonder if Rupert is still on top of his game.
The Times is now spending quite a lot on Google Adwords to bring visitors to their site. They are obviously comparing the cost of say 20 pence with the possibility that the visitor might sign up for say 10 years at £2 per week. So if one in 5,000 visitors sign up then after 10 years they break even. But only 1% of their regular readers have signed up, and a new casual reader must be many times less likely to sign up and to remain signed up, so even 20 pence may be a hugely excessive cost.
The idiots that thought of this probably didn’t realise that because less and less people will now view the times online…..it’s actually advertising the brand much less – so even the normal paper version of it, is less in people’s minds.