Will Rupert Murdoch's plans to charge for access to his websites pay off?
Next week Rupert Murdoch introduces a charge for access to the websites of his best-known news titles. Will his latest gamble pay off?
Thursday 13 May 2010
The big reveal comes next week. We'll have a better idea then whether the redesigned Times website and new Sunday Times online offering will be worth signing up for at £2 per week, or £1 for a single day's access. One thing is certain. No matter how luxurious this new digital experience turns out to be, a large portion of The Times' monthly traffic of around 20 million unique users will evaporate when, some time next month, News International ends its initial trial period and starts charging.
Among those departing users will be Jeannine Steward who, as I reported in March, responded to news of the impending paywall by posting "Adios" on the Times website, adding, "Give me a call when you're free again." But then Ms Steward lives in Norwalk, in Fairfield County, Connecticut. I know this because she emailed me to say thanks for "my 15 minutes of fame". With respect to Norwalk, it probably does not feature highly in the strategies of British media buyers – the people who buy advertising space on behalf of their clients. This is the crux of the paywall debate.
"What has become clear is that the traditional model based on millions of eyeballs is not working," says Tristan Davies, who has been developing the new Sunday Times website. "Users who maybe like Jeremy Clarkson might come into the site but then disappear. They may not even like the paper. So the business end of the company decided it was better to have a quality relationship with an audience than one based on quantity."
Though Rupert Murdoch's plans to charge for online journalism have seen him ridiculed as failing to understand internet culture, the once prevailing online credo that "information demands to be free" is no longer so powerful. The Financial Times website was one of the first to charge but, the argument went, people were willing to make an exception for insight that gave them an advantage in business, especially if they were spending the company's money when paying for a subscription. Rob Grimshaw, managing director of FT.com, discerns a change in attitude across the industry. "There has been a shift, but I don't think it is in the consumer's willingness to pay – that was always there, it's just perhaps that publishers didn't want to see it," he says. "We've seen for years these surveys trotted out that 80 per cent of people would never pay for content online and therefore the whole enterprise is doomed. Publishers looked at those things and saw in them what they wanted."
He points to other surveys that show that 51 million Americans still buy a daily newspaper. "That's about 20 per cent of the adult population of the United States. So when you get a survey that says 80 per cent of people won't pay for news online, to me what that says is that 80 per cent of people wouldn't have paid for news anyway, whether it's print, online or otherwise. It's not a problem it's an opportunity." Michael Nutley, editor of New Media Age, likewise detects a change in mood within the media industry. "The old online view was very much that everything has to be free. I don't think anybody seriously believes that now, apart from the most utopian internet evangelists," he says. "It's clear that if you have something that is of sufficiently high quality and convenient to use, people will pay for it."
In adland, there is growing enthusiasm for sites that provide rich data about audiences. Guy Phillipson, chief executive of the Interactive Advertising Bureau, says: "I have seen this issue discussed and conferenced in open forums and I think we've moved away from the simple argument that the BBC is out there and that's free and there's a lot of other free news. It's more down to the publisher themselves, what premium content they can provide to their core audience, who will pay, and how the economic equation stacks up in the end."
The task for News International is to offer content of significantly more value than that which users have become accustomed to receive for nothing. The website currently only hints at the video and audio offerings in store. "Don't just read The Times – listen to it, watch it, shape it, be a part of it," it says vaguely. Some journalists on the paper are fearful at the lack of big ideas such as might necessitate a subscription. Davies says the Sunday Times site will be highly visual. "Online there are a million different things you can do that you can't do in print, so we are investing a lot of time and money into multimedia. There will be masses of video on the site, interactive graphics; anything that has got a moving part we are interested in providing for our readers." Columnist Rod Liddle will be making a weekly film clip, as will viral video artist Alison Jackson, who will make a spoof version of the week's news. "We've done a lot of work in making the experience of reading the paper online a very different one from reading a traditional online newspaper," says Davies, who is also developing a Times/Sunday Times app with Apple for the iPad.
There have been greater teething problems with the Times site, causing the preview to be delayed until next week. But a team led by the paper's comment editor and influential blogger Danny Finkelstein, Hector Arthur, head of content development at Times Media, and Tom Whitwell, assistant editor of Times Online, has been honing the site, with a number of interactive features being trialled during the election campaign.
When charging begins, possibly after the surge of advertising that will accompany the start of the World Cup, that paywall may not be quite the permanent barrier the term suggests. "If it is a wall it has to be a very porous wall, or you have to be able to see what's on the other side," says Greg Hadfield, a former Sunday Times executive and internet entrepreneur who was head of digital development at Telegraph Media Group. "All sorts of tools will have to be developed to enable me as a potential subscriber to know what I'm going to get for my money."
Hadfield, who recently left TMG to join another digital consultancy, Cogapp, believes there is an appetite among online consumers to pay for specialist information such as the video-rich social calendar that will be offered under the brand of the Sunday Times supplement Culture. "Publications which have rich and deep content beyond the flotsam and jetsam of celebrity or commodity news, quality products that add depth and meaning, commentary, views and information, have a much better chance of providing an offering for which people will pay," he says. "It's a fantastically exciting period where everyone could learn from everyone else's successes and mistakes."
Other British newspapers are following very different online strategies. The Daily Mail, which has the largest monthly audience, is committed to building scale and challenging the large portals for advertising revenues. Its ability to drive traffic is helped by its large portfolio of websites. The Mirror and The Guardian have also pledged their futures to free access though, as Grimshaw notes, "The idea that all publishers, social networks and portals can make a living on the back of the advertising market just doesn't stack up."
Dan Sabbagh, who was The Times' media editor before founding the media news and previews site Beehive City, believes the NI project will only require a small number of subscribers to be a success. "Most people won't pay, but you don't need most people to pay. If 200,000 pay that's victory," he says. "My sense is that enough people will pay to make it worthwhile financially. But I think the loss of reach and loss of voice will be tough things to bear for the newspapers and their journalists."
George Brock, former international editor of The Times and now Professor and Head of Journalism at City University, London, points out that Rupert Murdoch, in spite of his grandstanding attacks on the news aggregation sites that have benefited from the free distribution of his empire's journalism, does not have a uniform policy. The Wall Street Journal operates a partial paywall system, while the Sky News site has no apparent plans to charge. "It's a laboratory full of experiments, not a fixed policy. They are just trying to design ways of finding out more," he says. "A lot of the language of the paywall is used by people who are terrified that somebody like News Corp is going to make one of these ideas succeed and change the rules of the game. The history of news publishing is putting something out there and discovering by fits and starts what works. Brilliant creative ideas do not necessarily come married to business models."
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