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Will Murdoch's paywall strategy 'work'?

Will Murdoch's paywall strategy 'work'?

It is still unclear whether News International's paywall for The Times' and Sunday Times' is "working," as the paywall is just two months old, and the websites have not yet made statistics public.

In the Independent today, the tagline for Ian Burrell's article on Rupert Murdoch's much discussed paywall states: "advertisers don't like it. Analysts are unconvinced. The paywall at News International may not be winning many fans, but the man behind it is determined to keep it standing." But François Nel, director of the Journalism Leaders Programme at the University of Central Lancashire's School of Journalism, Media and Communication in the United Kingdom, and also an SFN research partner, crunched the numbers, and the result is that the paywalls may be doing better than most people think. A lot better.

When The Times was still subscribing to ABCe audits, data showed that in May 2009 monthly unique users were at 20,406,420.
So, as Nel elaborates with his "back-of-the-envelope calculations":

"Say they were making £0.20p £0.10p per user per month, mostly from advertising.

That would be 20,406,420 X 0.10p = £2,040,642 per month.

So, say they lost 90 per cent of their users and, say, 50 per cent of their advertisers got cold feet, too:

20,040,642 X 0.10 = 2,040,642 users x (£0.10/ 2) £0.05 = £102,032.10 per month, mostly from advertising.

And say half those users cross the TimesPlus 'paywall' by through the £1 daily access fee and the other half opt for the £2 weekly access.

Income from daily access users: 1,020,321 X £1 x 30 days per month = £33,060, 963£1,020,32 per month.

Income from weekly access users: 1,020,321 X £2 x 4 weeks per month= £8,165, 136£2,040,642 per month

Total income would be £102,032.10 + £1,020,321.00 + £2,040,642.00 would be : £3,162,995.10, which is still be up 55% on what the income may have been before the paywall.

And say I'm only half right?"

paidContent's Robert Andrews pointed out last month that before calling The Times' and Sunday Times' paywalls successful, "one must properly define what 'success' would be for the project... This is about living within their means, courting their existing readerships to stem big losses..."

Andrews did the math, and after calculating revenue from the number of people surveyed who said they would be likely to pay, found that the publications would make £3.6 million per month, or £43.29 million a year.

"This would make The Times and Sunday Times amongst the world's most successful paid news sites - perhaps more so than, whose approximately 126,000 subscribers, paying up to £5.49 a week, we estimate make FT Group £35.9 million a year... even assuming a half or quarter of this estimation, Times Newspapers will have brought in something to offset its losses."

Meanwhile, George Brock, head of journalism at London's City University, former executive at The Times and board member of the World Editors Forum (of which this blog is a partner site), told Burrell that the trend is moving toward paywalls, not against them, and that advertising executives need to learn how to work with them. He also said he believes the media conglomerate will stick with the paywall model. "It's a long slog, but I don't detect any signs of [News International] being massively ruffled by the process."

For a previous article related to this topic, visit our sister publication,


Leah McBride Mensching


2010-09-02 23:53

Shaping the Future of the News Publishing

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