A few early observations on yesterday’s announcement by The Times that they will charge for online access as of June. (Disclosure: I worked for The Times until 2009).
1. While this is an experiment – and to be welcomed as that – it is not likely to have been done without plenty of market surveys. News International, The Times parent company in London, is an outfit with a heavy research habit. By definition, this kind of consumer behaviour isn’t easy to predict but it’s not as if they will just have wandered into it blind. The Editor of The Times James Harding may be fronting and the site is getting a revamp, but this is a business strategy decision, not primarily an editorial one.
2. The price point is incredibly low. Most research suggests a conversion rate between 5% (reckoned pretty good) and 10% (stratospheric). Nowhere in this range do they make much money at this retail price. We have to assume that they hope to crank the price up as time goes on. But the pivot of that strategy has to be achieving steady increases in the perceived value of the product. As I’ve argued, most newspapers don’t fully realise how far that perception of value has dropped over a long period.
3. The themes of any raise-the-value strategy are likely to be engagement, premium, loyalty. Every newspaper website has been cutting and re-cutting its online visitor figures to try to work out who among them can count as loyal, regular readers. Who comes once a month? Who comes once a week? Expect these people, the core of the people who may now pay, to be offered perks, extras and goodies. The God being worshipped here, the dominant imperative, is ARPU (Average Revenue Per User).
4. The really unusual and risk-taking angle here – and the bit that I really don’t understand – is that the paywall goes round everything. Even for the three oft-cited business sites with pay models (FT, WSJ and Economist), there is a hybrid mixture of free and paid. And in those three cases, there’s a strong I-need-this-for-my-work motive and subscriptions costs are often not being paid by the individual reader (but by her or his employer). Why does The Times feel so confident that it adopts the high-wire route? Beats me.
5. Relatively little attention has been paid to the fact that this relaunch splits out The Times and the Sunday Times and brings TimesOnline to an end. Like most divorces, this will have been eye-wateringly expensive and painful to negotiate. But it will make it easier for the Sunday Times to make the most of its strengths in magazine-style visual display on the iPads and e-readers which are about to come on the market in such numbers.
Tags: Harding, paywall, Sunday Times, Times
George,
I’m not as sure as you are that this is only “an experiment”. I was fortunate enough that my question was asked to James yesterday in the online Q&A.
I asked: If the paywall scheme leads to sharp losses in the next year, and if no other major media outlet in the UK follows suit, will you drop the scheme or persevere with it?
His answer was: “…nope, just hide under this desk.
Seriously, Peter, it’s got to be the case that charging for content is going to make more economic sense than just giving it away. We are not making just dumping our journalism online. Even if we grow our audience by tens of millions of people, then that will still be the case.”
That doesn’t sound to me like an experiment that will be dropped if it goes pear shaped. Maybe that’s because, as you hinted, the cost of setting up and separating the websites will have been so expensive that it will be an irreversible measure.
I’d be interested to hear your thoughts on this.
Many thanks,
Peter
Peter – I don’t think that the split of The Times and Sunday Times is easily reversible. But I wouldn’t ever rule it out. But the experiment is the charging. Whatever James H may say, this is an empirical move, designed as much to shake up the pieces on the board and to collect data as to do anything else. Very few companies are as unsentimental and effective as NewsCorp at reversing mistakes. This move is just like others. If it fails, they’ll can it and do something else.
George