Murdoch’s UK paywall – set to change the world of online news

Rupert Murdoch could never be accused of stupidity. Rash behaviour at times, certainly, but he’s ruthlessly smart and totally focused on the bottom line.

In a few weeks time Murdoch’s most valuable (in terms of reputation and cache, if not profitability) media assets in the UK will disappear behind a paywall.

The Times and The Sunday Times will cost you real money from some time in June 2010. Already if you want to check-out the still free content you have to sign-up to go past the front page.

Next time you visit The Times, take a moment to register...have your credit card handy too.

Paywalls are controversial; supporters argue that without significant injection of subscriber funds there will be no more quality journalism, while detractors say that paywalls are anathema to the very ethos of the Internet.

One critic, Future magazine’s CEO Stevie Spring says she wishes Murdoch well, but remains unconvinced that the paywall experiment can work:

“Perishable news – like that News Corporation is talking about, for instance – is ubiquitous,” she said. “The basic rules of marketing say people will substitute and not pay for what they can get free. Good luck to them, I really hope it works but all the norms of marketing say it won’t. [However] it is an experiment they can afford to make.” [guardian.co.uk]

Roy Greenslade also puts the strategy under the financial spotlight, pointing out that subscriber numbers would have to jump exponentially to cover the costs of the newspapers’ £100 million editorial budget:

If 100,000 people agreed to pay £2 a week for access to the papers, it would result in annual revenue of £10m. It’s a sobering thought that the sum is but a tenth of the papers’ editorial budget and less than an eighth of their current joint annual losses. [Greenslade blog]

I’ve done some similar calculations in News 2.0: Can journalism survive the Internet?, which I’m also pleased to report is now in the hands of my editor and will be out by the end of the year.

My examples take the whole notion of micropayments and paywalls to task and shows that either subscriber numbers have to be much higher than they are today (and a multiple of current click rates for free news sites); or the cost of subscription will be well beyond any reasonable definition of micro.

I’ve also looked at the figures for the Christian Science Monitor‘s first six months of online only daily content coupled with a weekly print digest edition. According to the information I was given by CSM, the math is still precarious for them. The CSM weekly edition had 77,000 subscribers in October 2009 and 3000 subscribers to its daily email alerts. At less than $US6 per month, this is not a lot of revenue coming in. The CSM is also running a subscription campaign at the moment offering US readers 26 weeks for just $US 13. Not a sign that it’s doing well.

Murdoch may also face another problem, his newspapers may effectively disappear from public discourse because the stories and pages will not be easily catalogued and displayed by Google and other search engines.

A casual rate of £1 a day is available, or £2 a week, but the big push is on for people to either take out a subscription to the print editions, or join the Times+ club for 50 quid.

The papers’ sites have also had a make-over. Less stories and headlines on the front page and no more anonymous comments on stories. The Sunday Times will also have more graphics video content.

The Times‘ executive editor Daniel Finkelstein summed up the company’s stragey in an interview with The Guardian:

“The experience is like a newspaper but better. We are not selling them [readers and users] news, we are selling them the Times and Sunday Times.”

So perhaps in the ritzy parts of London having a subscription to The Times – and therefore access to the exclusive content — will remain a sign of status and wealth. The rest of us will just have to wait for the hackers to catch up and bust the paywall.

I’m sure it’s only a matter of Times.

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