Newspapers and paywalls, some data from The Times

November 2, 2010 1:30 PM

Some data on newspapers and paywalls, as The Times reveals some of their numbers and chooses to look on the bright side of the data, while others are more skeptical.

While Times editor James Harding described giving news away for free as "suicidal economics", others saw building a paywall as equally masochistic. But it seems Rupert Murdoch's personality is such that: "What he is always doing is demonstrating a level of strength and will and resolve against which the other guys, the weaker guys, cower. He can take more pain than anybody else."

From the data and analysis around, it seems The Times in its paywall form has lost at least 87% of its subscribers if not more, and pageviews per user and dwell time are also down. Print sales have continued to fall despite the content no longer being available for free online. Overall it is likely The Times is now making less money online than before the paywall was implemented.

Ultimately however, as several of the linked articles say, Rupert Murdoch is playing a long game, and the jury is still out.

posted by philipy (48 comments total)

105,000 paying users isn't to be sniffed at... IF they are paying.
posted by Artw at 1:34 PM on November 2, 2010

TechCrunch seems to think Murdoch is actually doing quite a bit better with the paywall than without, in terms of actual revenue, but that the improvement is probably only short-term and will vanish once subscribers numbers plateau.
posted by briank at 1:38 PM on November 2, 2010

Circa 1998 I worked for a b2b .com that had 32,000 member companies. None of these companies paid a dime. We were the "Premier" site for that industry on the web. We still went broke. If we had had a fraction of that as paying customers we would have stayed afloat and I would have been happy to give up our spot as the "Premier" site.

Pre-Web the NYT had a shockingly small distribution. They can go back to being small and exclusive I guess.

Wake me up when somebody decides to start taking over these papers and running them as non-profits. Not everything has to make the owner rich.
posted by Ad hominem at 1:39 PM on November 2, 2010

Well, anything that will cause Rupert Murdoch more pain is something I can wholeheartedly support. But also, if he puts the web presences of ALL his news entities behind paywalls, the journalistic quality of news on the open web will improve markedly.
posted by oneswellfoop at 1:41 PM on November 2, 2010 [1 favorite]

I would certainly expect a lot of drop off as the novelty of Apps wears off.
posted by Artw at 1:41 PM on November 2, 2010 [2 favorites]

Mr. Murdoch turns 80 in March. I'm not sure how long a game he can afford to play.
posted by Joe Beese at 1:46 PM on November 2, 2010 [2 favorites]

Ultimately however, as several of the linked articles say, Rupert Murdoch is playing a long game, and the jury is still out.

Long game of what? Draining the Times of any readership and visibility it may once have had?
posted by blucevalo at 1:47 PM on November 2, 2010 [1 favorite]

Strange game. The only way to win is not to play.
posted by Astro Zombie at 1:48 PM on November 2, 2010 [2 favorites]

Mr. Murdoch turns 80 in March. I'm not sure how long a game he can afford to play.

Mr. Murdoch has a wife and five children. The wife and three of the children are heavily active in the media industry. James is the heir apparent at News Corp.
posted by blucevalo at 1:51 PM on November 2, 2010

Circa 1998 I worked for a b2b .com that had 32,000 member companies.

onvia?
posted by maxwelton at 1:53 PM on November 2, 2010

yeah, James Murdoch's a nasty peice of work as well. Might not be as smart as his dad though.
posted by Artw at 1:53 PM on November 2, 2010

I long for the day that Fox News goes behind a paywall.
posted by empath at 1:54 PM on November 2, 2010 [8 favorites]

Losing 87% is 3% better than I'd have told them to expect, if anyone had asked me.
posted by rusty at 1:54 PM on November 2, 2010 [1 favorite]

I feel like any newspaper that's spent hundreds of millions of dollars upgrading their printing facilities within the last decade is going to be in very sorry shape within the next 5 years, if they aren't already.

Once there's a few hundred million iPad-like devices out there, it will become almost impossible to sell paper newspapers. I'm already reading the free stuff that the New York Times offers via the "Editor's Choice" iPad app (quite a good selection actually), plus BBC News and NPR.

I know this is about the Times of London, but here's an anecdote:

Last month there was an LA Times salesperson at my grocery store, trying to get people to subscribe to the paper, so I asked what the digital subscription options were. He told me I could get digital access to the entire LA Times paper (as opposed to what's on the website) via the Web, provided I signed up to get the paper delivered to me. I explained to him as patiently as possible that I simply do not want the paper version at all, just digital access via my iPad. I have no interest in paying hundreds of dollars a year to get a stack of newsprint that I'm not going to touch other than to toss it into the recycling bin; I'd be happy to pay something like $5-6 a month to read the thing on my iPad. He just couldn't process that at all.

The papers have spent so much money on the *paper* part, they don't know how to let that go. Paywall on the Internet, good luck. Using the tablet-based walled gardens could work out well, providing they price it appropriately.
posted by zoogleplex at 2:04 PM on November 2, 2010

I long for the day that Fox News goes behind a paywall.

They'll want to destroy PBS first.
posted by Artw at 2:11 PM on November 2, 2010

I suspect that Murdoch's boundless greed compels him to limit what he gives away as a matter of principle. However, as a businessman, surely he knows that people will only pay when he has something in high demand, like Premiership Football in the UK.

Middlebrow rightwing propaganda (a la the Times) is always in high supply, and isn't in nearly high enough demand to justify a paywall.
posted by banal evil at 2:36 PM on November 2, 2010

Isn't fox news already behind a paywall called cable tv or are you talking about the local network affiliates?
posted by spicynuts at 2:41 PM on November 2, 2010

There are two papers with paywalls that are doing just fine:
1. The Economist
2. The Wall Street Journal
Murdoch owns the WSJ.
posted by Postroad at 2:43 PM on November 2, 2010 [1 favorite]

A few thoughts on this:
- The influence of the Times (and Sunday Times) will decrease. The Times used to pretty much be the paper of record in the UK, but it started moving more towards a tabloid-y feel, especially when it moved to the compact size. The website (as with a lot of newspaper websites) also started to move towards fluff stories designed to get pageviews. However, now the only people viewing it will be its adherents, and various institutions. Casual readers will have moved to either the Telegraph or Guardian website (or more likely the BBC, since the Times had more of a centrist reputation even when it wasn't, and the BBC likewise has such a reputation, even if there are allegations of leftism).

- They have a great opportunity to ditch the celeb stories etc. and concentrate on proper journalism. I reckon doing this (which isn't something that can be as easily replicated by blogs etc.) could lead to a mini-resurgence (you get what you pay for etc.), but I doubt that it is the way they'll go.

- I would be very interested to see stats from across the range of other UK newspaper sites, to see where the exodus went to.
posted by djgh at 2:48 PM on November 2, 2010

Given that my recycling can has been receiving The Wall Street Journal for more than two months despite several attempts to make them stop, I don't give these numbers much credence.
posted by ecurtz at 2:50 PM on November 2, 2010 [2 favorites]

Oh, also:
- I would be interested to know if advertisers would pay comparatively more per slot (therefore maintaining payment) for more personalised advertising. Since the subscriber group is self-selective, and since various details are no doubt needed to sign up, surely the info the Times has on each subscriber is significantly more than they had on drive-by readers.
posted by djgh at 2:50 PM on November 2, 2010

Murdoch is planning a new "digital newspaper" that is supposed to appear only the iPads of paying subscribers. They are in a hiring frenzy and I have friends thinking of applying to work there.
Does anyone think that model could work? I'm highly dubious. Who will pay for what is basically a website that isn't online - and which will cover the same news all the other free news sites are covering?
posted by CunningLinguist at 2:58 PM on November 2, 2010

Wake me up when somebody decides to start taking over these papers and running them as non-profits. Not everything has to make the owner rich. posted by Ad hominem

Let me introduce you to The Guardian owned by the Scott Trust
posted by Lanark at 2:58 PM on November 2, 2010 [7 favorites]

Let me introduce you to The Guardian owned by the Scott Trust

That's definitely a non-profit. A while ago, it was apparently bleeding £100,000 a week.

I hope they've managed to turn that around; I'd hate to see the Graun go bankrupt.
posted by acb at 3:38 PM on November 2, 2010

There are two papers with paywalls that are doing just fine:
1. The Economist
2. The Wall Street Journal

Financial information is somewhat of a special case, as the customers are more likely to pay for timely and high-quality analysis, especially if it's seen as essential for making business decisions and remaining competitive. Whether as many people would be willing to pay for current affairs, terrorism scares or celebrity gossip is a different question altogether.
posted by acb at 3:40 PM on November 2, 2010 [2 favorites]

Who will pay for what is basically a website that isn't online - and which will cover the same news all the other free news sites are covering?

Also, who is going to want to pay for a subscription to a service to which you can't send links to friends?

You have to make FPPs out of things people can click on, after all.
posted by mmrtnt at 3:42 PM on November 2, 2010

CunningLinguist: they pulled the plug and made everyone redundant a couple of weeks ago. It is an ex-project.
posted by Leon at 3:46 PM on November 2, 2010

CunningLinguist: oops, sorry, just read your link. I was talking about Project Alesia.
posted by Leon at 3:49 PM on November 2, 2010

They'll want to destroy PBS first.

Is PBS that much of a threat? I thought that, unlike the BBC (which Murdoch père and fils are hell-bent on destroying), PBS is all but invisible to everybody but a demographically irrelevant minority of urbane liberals.
posted by acb at 3:49 PM on November 2, 2010

I have no interest in paying hundreds of dollars a year to get a stack of newsprint that I'm not going to touch other than to toss it into the recycling bin

It's not quite that much. A daily subscription for me costs about $155.00. But I do agree that having access to a digital copy on a regular basis would be cool. I'd pay for that.
posted by Hylas at 3:58 PM on November 2, 2010

I don't think the WSJ is really as successful as I first appears. How much of their base is inertia at libraries and street corner stock brokerages. I don't know how many home subscribers they have. I think the future is probably NPR style models. Corporate sponsors with a deep relationship who want to associate themselves with a premium brand / large audience that supports web and digital delivery. NPR is the only group actually expanding coverage and growing.
posted by humanfont at 4:24 PM on November 2, 2010

Well, anything that will cause Rupert Murdoch more pain is something I can wholeheartedly support. But also, if he puts the web presences of ALL his news entities behind paywalls, the journalistic quality of news on the open web will improve markedly

But what if, horoor of horrors, the anti christ that is murdoch actually turns out to be the champion of decent journalism and the guardian is aiding it's downfall?

I would always rather read a paid journalist who makes it his job to investigate and write stories rather than some awful citizen journalist, and if this is the way to keep that then I'm all for it. If the guardian went behind a paywall I'd pony up for it, gladly.

(my paper, btw, is, and always has been the guardian and I loathe murdoch).

I don't understand why papers (and I use this in the general not in the dead wood term) don't put headlines with a bried paragraph on the internet for free, so we can all see what's going on, and then put analysis and longer articles behind the paywal, because that's the stuff I want to read, and I want well written.
posted by ciderwoman at 5:11 PM on November 2, 2010

To be honest, I've never understood why newspapers are giving their content away for free. Adverts don't pay for the paper version, so why should they pay for the online version? And if the online costs are lower, why would I pay for the paper version when I can read it online for free? I used to buy The Guardian. Now I read The Guardian online and buy The Times Do I like the fact that I can no longer read The Times online? Obviously, no, but in my case, the paywall has actually worked.
posted by salmacis at 5:12 PM on November 2, 2010

I have no interest in paying for newspapers (online or otherwise) whilst the BBC and (Australian) ABC are freely available. I might be willing to consider some sort of micropayment system for some sort of convenient news service on the iPad, but the current newspaper offerings are not regularly compelling enough to pay a more regular subscription.

One news service I am considering paying for is a subscription to the Economist. Unfortunately, at $500 or something for a year (last time I looked), it's a bit outside my budget. If they had a good iPad app, I'd be sorely tempted (they do have a pretty clean web site, but it's still not as readable as their paper version).

I think, as people have mentioned above, the point is you have to be providing something unique for people to want to pay for it. I don't think people have loyalty to particular media outlets the way they did in the past (when I was growing up in Melbourne you were either an Age reader or a Herald-Sun reader – there was almost no overlap - but now they're all bundled together on Google News the only way I can tell what I've clicked through to is the colour of the garish crap on the web site). For me, the Economist, due to the quality of their analysis and the conciseness of their articles, is worth paying for. Certain academic journals that I get are also worth paying for. The "news" – that I can get for free.
posted by damonism at 5:19 PM on November 2, 2010

> Using the tablet-based walled gardens could work out well, providing they price it appropriately.

Khoi Vinh, until recently design director of the New York Times, on that. The tl;dr version (which sounds harsh by editing out the analysis that qualifies this, but it is pretty harsh anyway) is, "So far all major media publishers, with Adobe's encouragement and incentive, are treating the tablet version of their publications as little more than print magazines that can display video. Doomed to fail."
posted by ardgedee at 6:09 PM on November 2, 2010

The Washington Post made almost 100 million online last year out of 673 million total news paper revenues. That can feed a pretty big newsroom. I figure you coud easily put 200-300 journalists in the field, fund your tech and sales staffs and still be under the 1000 people this revenue structure would support.
posted by humanfont at 7:08 PM on November 2, 2010

Releasing the figures is a bad idea. Like realising you are one of the 700 people still watching Richard and Judy on UKTV.

If they thought giving the content away for free was an example of "suicide economics" lets revisit their paywall brainwave in 12 months. Bye bye Times Online.
posted by fire&wings at 7:27 PM on November 2, 2010

To be honest, I've never understood why newspapers are giving their content away for free. Adverts don't pay for the paper version, so why should they pay for the online version?

Adverts do indeed pay for the bulk of the physical paper. Subscription fees typically cover little more than distribution costs. The problem is that there is a whole lot more competition online, thus ad fees are (currently) lower.
posted by ChurchHatesTucker at 7:29 PM on November 2, 2010 [1 favorite]

To be honest, I've never understood why newspapers are giving their content away for free. Adverts don't pay for the paper version, so why should they pay for the online version? And if the online costs are lower, why would I pay for the paper version when I can read it online for free?

It's a race to the bottom; if one paper doesn't give it away for free, the competition will, and will eat their market share (and thus their advertising rates).

The traditional business model of the papers (sell paper copies, classifieds and ad space) has been massively disrupted by the internet, by generally making information far easier to acquire. This drives the market price of everything the papers have to offer down; when the papers were the only game in town, they could charge handsomely for classifieds, ad space and access to the news. This had the positive byproduct of allowing professional journalism to be funded. Now, there's Craigslist and Google, and a wealth of other news sources. Though the papers themselves were the product of artificial economic conditions, albeit ones so familiar that we started to think of them as natural. There's no law of nature that information has to be scarce and there have to be lucrative niches for gatekeepers.

Of course, it could be argued that the papers have been sick since before the web; a book titled Flat Earth News, by former Guardian writer Nick Davies, suggests that, since the 1980s, when newspaper companies were taken over in mergers and acquisitions, costs were cut, and journalists were made to churn out more output with less time for legwork, and thus the news became less accurate. So we may be seeing a substandard product getting its comeuppance in the market.

So at the moment, we're witnessing the papers running around in a panic, desperately trying to save their model, and not wanting to believe that there may no longer be a viable niche for the institution known as the newspaper. The question is who will fund professional journalism, when the town classifieds no longer do. Will we see states or similar entities running journalistic operations, along the lines of the BBC or al-Jazeera, for the reflected prestige and/or soft power? News organisations forming cartels and colluding on minimum prices? Or will professional journalism as we know it disappear, and other institutions fulfil its functions?
posted by acb at 7:46 PM on November 2, 2010

But what if, horoor of horrors, the anti christ that is murdoch actually turns out to be the champion of decent journalism and the guardian is aiding it's downfall?

The Guardian didn't destroy the price of news, and by continuing to operate, is having a negligible effect on it; if it disappeared tomorrow, the market price of news wouldn't turn around and start rising again towards a profitable point. As long as there is an internet, and the cost of communication is lower, the effect will continue, and Murdoch can't turn the tide any more than King Canute could. Even with the most draconian copyright treaties, and a total end-to-end DRM regime mandated at the international level, the very fact that the internet makes finding things quicker would prevent a return to the "good old days" when newsmen could charge handsomely for what they had to offer. (For one, the increased ease of communications reduces the value of what the papers have to offer.)
posted by acb at 7:54 PM on November 2, 2010 [2 favorites]

CunningLinguist: Does anyone think that model could work?

Yes, if the pricing is right. $0.99 per daily paper? Not in a million years. $0.99 per week? I'd pay it, each, for the NYT, LAT, Times, Asahi Shimbun, a few other world papers in translation. Reading newspapers via a browser, even thru Safari on the iPad, is annoying. The NY Times app is pretty slick apart from the ads crashing it now and then, the news delivery is excellent.

ardeegee: "So far all major media publishers, with Adobe's encouragement and incentive, are treating the tablet version of their publications as little more than print magazines that can display video. Doomed to fail."

With respect, disagree. What's wrong with just rendering a print magazine in a digital page format? How is it much different from an eBook? I think there are an awful lot of Kindle, nook, iPad etc. readers who are very much enjoying the look of the printed page without the paper underneath it.

The "magazine" or even "newspaper" format is actually a very well-tested, highly functional, data-dense and eye-pleasing way to input information into your brain, with hundreds of years of real world experience in what works for people's desire to learn matched to the way our senses work and how we operate in our environment. Adapting it to a tablet form factor can, should and I would say from seeing so far, is based on that knowledge. (I should note: I'm a fan of Ed Tufte.)

I like reading the NY Times on the iPad app, and it's pretty much just the text, with a few photos. I don't care about any video they might embed, I just happen to like reading the text. I'm not the only one like that, but it might be my age group talking there. Also, I really enjoy the iPad version of Wired, but again I can take or leave the various video/audio additives. The Wired folks seem to be pretty savvy about not making those AV bits essential to understanding or enjoying the story they are attached to. This works really well for me.

I have my problems with Adobe, but they're not idiots about information presented in text and pictures. I don't think they're off base here.

What's the alternative? A TV news show? Just what I need, yet another CNN blasting out of my tablet. High drama, high anxiety, over-graphicized, hyper-flashy, shouty anchors and exceptionally low information density... Guh. No thanks. I've pretty much totally rejected TV news in favor of web and App delivery.

Of course, people under 35 may disagree with me. That's okay.

acb: Or will professional journalism as we know it disappear, and other institutions fulfil its functions?

God I hope not. We really do need pro journalists who know how to get stories and report them effectively. That's not really a common skill, bloggers notwithstanding. It really helps to have a source of information that from which you get a sense of integrity. The New York Times is an example of a "news brand" that has that cachet, worldwide. If it stops being printed on paper, that brand will be even more crucial for them to maintain in order to keep eyeballs.
posted by zoogleplex at 9:05 PM on November 2, 2010 [1 favorite]

acb: "Let me introduce you to The Guardian owned by the Scott Trust

That's definitely a non-profit. A while ago, it was apparently bleeding £100,000 a week."

That's £100,000 *a day* - operating losses at The Guardian and Observer were £37.8m in 2009-2010 (in 2008-2009 they had losses of £36.8m)

Which is why I always take The Guardian's stance on what News Corp is doing with a bit of a pinch of salt. I'm a loyal Guardian reader (Saturdays mostly) but I do think that they've got their heads in the sand on some issues.

I don't know whether what Murdoch is doing will work in the long run, but at present he's losing less money than they are on his newspapers.
posted by DanCall at 2:03 AM on November 3, 2010 [1 favorite]

@ChurchHatesTucker: So explain to me, if adverts do indeed pay most of the costs of the physical paper, why is The Guardian making such a huge loss?

And I don't understand the "race to the bottom" argument either. It doesn't apply to the physical newspaper, so why should it apply to the website? The Guardian, The Independent and The Times all cost around £1. Why is there no race to the bottom on the price of these papers?
posted by salmacis at 3:05 AM on November 3, 2010

So at the moment, we're witnessing the papers running around in a panic, desperately trying to save their model, and not wanting to believe that there may no longer be a viable niche for the institution known as the newspaper. The question is who will fund professional journalism, when the town classifieds no longer do. Will we see states or similar entities running journalistic operations, along the lines of the BBC or al-Jazeera, for the reflected prestige and/or soft power? News organisations forming cartels and colluding on minimum prices? Or will professional journalism as we know it disappear, and other institutions fulfil its functions? - acb

I think that what happened with the internet was that the newspapers were suddenly faced with competition for eyeballs due to the barriers to entry in the information game being removed - anyone could start a website (and this has only continued with blogs, and continues with video, podcasts etc. in place of news and radio) and put information out there.

Sadly, most newspapers seem to have tried to replicate other sources on the internet, which means that they just ctrl-v ctrl-c a story and post it a day later. They don't have a unique, desirable product - they're just like any other blog out there, except unlike the most popular ones they aren't first in line with new stories, and they can't add the scurrilous element that people enjoy. It's kind of like your uncle telling you about the new iPod three weeks after you've bought one; or your aunt telling you that apparently Britney Spears [name plucked at random] got into some trouble when Perez Hilton has posted pictures of her doing the thing, with catty commentary.

Newspapers could've focused on their core business, which is reporting. I think that the Economist has shown that people will pay for a good news product (and they don't really seem to do a huge amount of original investigation so much as they distill the news and provide though-out opinion).

I'm looking forward to an increase in independent outlets affiliated with major news providers, such as The Bureau of Investigative Journalism. Smaller, able to focus on unearthing stories, but able to use the infrastructure and existing readership of established institutions to get their stories out. I also think that there needs to be an aggregator for that kind of independent quality content provider.
posted by djgh at 4:50 AM on November 3, 2010

Is PBS that much of a threat?

Is flag burning? No, but it still makes a great issue to raise millions of dollars over.
posted by XQUZYPHYR at 6:03 AM on November 3, 2010

This is a great presentation by Hal Varian of Google, all about the past and future of newspaper economics.

It runs a bit like this:

1) Newspapers always cross-subsidised the news with ads around feature content (cars, business). Online, this traffic goes to specialist sites, so newspapers lose out.

2) Readership is falling, classified revenues are falling.

3) Online readership is high, but time spent is low.

4) Newspapers need to increase online engagement, and experiment with new formats

@salmacis - ads can pay for a newspaper on their own, as in the free papers like Metro, and even the Evening Standard, apparently, but only if the cost base is really low. Quality papers have to have much higher cost structures - they can't get away with taking all their stories off the previous day's internet, so they find it much harder.
posted by DanCall at 8:06 AM on November 3, 2010 [1 favorite]

@ChurchHatesTucker: So explain to me, if adverts do indeed pay most of the costs of the physical paper, why is The Guardian making such a huge loss?

Partly what DanCall said, and partly because of financing huge debts that were incurred as part of the cost of buying them at a time when projected revenues were unrealistically high. (I'm not sure about The Guardian in particular, but it's true for most mid/large papers.)
posted by ChurchHatesTucker at 2:49 PM on November 3, 2010

Also, to clarfy, by 'physical paper' I mean the actual object, not the newsgathering etc. that makes the object worth reading.
posted by ChurchHatesTucker at 3:21 PM on November 3, 2010