It appears that News International is close to launching its paywall around the Times/Sunday Times Online as subscribers and registered users were invited to register for premium content. New Media Age has reported that the paywall is expected to be introduced in April as part of a revamp of the site being led by The Times’ Head of Digital Development Hector Arthur.
Just prior to this latest development, a Pew study was released which examined consumers’ attitudes, albeit in the US, to paying for news online. It highlighted the challenge that the Times Online and other publications such as the New York Times have to overcome if they’re going to make their paywalls pay.
The study found that just 35% of online news consumers had a ‘favourite’ site and of those ‘loyal’ consumers, only 19% said they would be willing to pay for news online. So overall, less than 7% of all those who get their news online have a favourite news source which they would be willing to pay for.
Looking at the numbers, the January 2010 ABCe for the Times Online recorded 21.4m unique users. The Pew study would suggest a maximum 1.5m of those users would be willing to pay for content. To rival the online advertising revenues of say the Guardian, reported as £25m, and which isn’t yet contemplating a paywall, Times Online is going to need to find a way to raise fees of £16-£17 from each of those users. And of course, other revenue streams will still be available in terms of (much reduced) advertising and direct marketing to its subscribers. It doesn’t look impossible even if the calculations are a little crude at best.
But of course year one revenues aren’ty going to the same as year 2 or 3 revenues and beyond. The Times is going to have to work hard to keep those subscribers loyal to stop them drifting off to other free news sources and its ability to attract future new subscribers and grow revenues will depend on which way the online news market goes.
Should other newspapers follow suit and the free options narrow for consumers, more might opt to subscribe to their news source of first choice, meaning a bright future for the Times and its paywall. If the Times stands alone in the UK news market, susbcribers might drift away making its model one of declining revenues.
The irony is, the Times itself will play a large part in determining this trend as the success of its paywall will be the key in whether it’s competitors decide to follow suit. It’s no wonder they haven’t been rushing it’s launch.