The Times’s pay wall would not sustain its daily losses?
– Note: this is a fragment from my dissertation looking into The Google Effect on Newspapers’ Websites. This excerpt refers to pay walls as revenue streams.
The first Murdoch UK titles to raise pay walls are The Times and The Sunday Times. Starting June 2010, the sites will charge for content online, £1 for a day’s access and £2 for a week’s subscription, for both editions of the papers.
In perspective, The Times reportedly loses around £240,000 per day. A Guardian report from March 2010 estimates that the pay walls for The Times and The Sunday Times would bring around £1.83 million over a month if only 5% of the users pay for the daily fees, or £3.66 million per month at a 10% pay wall conversion rate. If the weekly £2 pass is chosen, the revenues for the paper would be considerably lower.
These estimates were based on the February 2010 ABCe figures, which indicate the two sites had a total of 1.22 million visitors per day. The Time’s monthly visitors numbers fell to 20.42 million from 21.4 million in January 2010.
A Pew study found that out of those who have a favourite news website (35% of the total surveyed), only 19% would be willing to pay for news online. For The Times’ impending pay wall, these figures would equate to around 133,000 visitors paying for news, either £1 per day or £2 per week. The Times could make somewhere between £133,000 per day or £266,000 per week, from subscriptions only.
The maximum figures for a week would be only able to cover the losses The Times makes per day.
The advertising revenue was not included in this calculation. This was calculated with the ABCe figures for the month. If calculated with daily average visitors figures, it would equate to only around £81,130 earned per day through pay walls alone.
Mike Hodges
The problem is, in my opinion, not that of charging for on-line content but the basic need of any business to make a profit.
Robert A. Heinlein repeatedly used the acronym TANSTAAFL (There Ain’t No Such Thing As A Free Lunch) in “The Moon Is A Harsh Mistress” to ram home the idea to the reader that nothing is free. Someone, somewhere is paying a price even if that’s not you at this particular moment. TANSTAAFL applies to the Internet just like everywhere else. There are major costs involved with creating and maintaining a website and they must be met. Someone has to pay the bills. If not then the website will have to eventually close.
The Times, and The Sunday Times, are seeking to turn their websites into revenue generators. I don’t think they will succeed. The Internet community are too obsessed with “free” content to ever consider paying for information that is “freely” available elsewhere. One day that will change as economic forces drive a move away from “free”. When the Internet matures and embraces the currently unattractive idea of having to pay for content.
Gary Argent
Once the Times is making the kind of figures you suggest, stripping back the production costs of the newspaper will be fairly easy. I wouldn’t be surprised if it was only sold as a daily in central London with only the Sunday Times kept running nationally. This way, his print ad revenue would only take a relatively small hit, due to the majority of its sales being in the City, but his production/distribution costs would plummet. In the short term for Rupert Murdoch, it’s better to have a smaller operation with a sustainable revenue stream than continue the way it is now. Quite simply, he’d rather have 133,000 people paying £1 or £2 per a month now and work at building on that, rather than carry on losing £240k a day from print costs in providing a service for barely 500,000 people.