Daniel Ionescu

– 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.

The Newspaper Publishers’ Association (NPA) complained to the BBC Trust because the BBC was planning (read developed) three dedicated iPhone/iPad apps, for news, sport and iPlayer (the on-demand video catch-up service).

The NPA said the apps would “undermine commercial organisations’ ability to establish economic models on smartphones.” Outrageously, the BBC Trust, the governing body of the BBC, delayed the aforementioned iPhone apps because of the NPA complaint.

The Newspaper Publishers’ Association represents national and regional newspapers, magazines and business-to-business media, books and journals and data publishers, according to its website.

The NPA claims on the same site that its members, “publishers in particular, have grasped opportunities offered by the new technologies and are leading long-term investors in digital content and on-line services.” But that’s unless the BBC wants to offer free iPhone apps.

Building an iPhone app for a news site is ridiculously inexpensive and easy, especially for the smaller local titles which could be “threatened” by a BBC News iPhone app.

AppMakr is such an example: you can make a nice iPhone app for your newspaper within minutes (using RSS feeds, learn more about the process) and it starts from only $299. You can even insert your own ads within the content and set the price for the app. iSites is another great similar service.

Point in case — Newsweek and the Atlantic Wire, among many others, have created their iPhone apps this way. There’s nothing stopping NPA members to do the same, hence establishing themselves on smartphones, free of charge or paid for, with or without advertising. What more can you ask for?

The Guardian has its own great best-selling iPhone app (which I reviewed here). The Telegraph, Independent and Manchester Evening News have their apps as well, though arguably not as good as Guardian’s. None of them are created using the solutions I suggested above, but some could do with a makeover.

The BBC News iPad app is available in the US though, where the corporation operates commercially, and paidContent says it’s already a big hit. Note that outside the UK, the BBC is not covered by the Trust review. The BBC iPhone apps will reportedly make it in the US as well, while the UK waits for its newspapers to get their act together.

Adults under the age of 35 have significantly increased their consumption of news in the past three years — and they profess a growing interest in getting news from print newspapers.

Some Hope for Newspapers in Greater News Consumption by Young
— Mark Fitzgerald, Editor&Pulbisher

I’m increasingly intrigued by surveys which go unscrutinised, such as the latest from McKinsey & Co. The survey says “average daily news consumption in the UK increased to 72 minutes from 60 minutes three years ago,” and younger news consumers “overwhelmingly prefer to get their news from television and the Internet.”

Great, this actually fits with the trend of declining (print) newspaper sales and a massive increase in online reading. But no, the story goes on to say: “interest in getting news from newspapers has grown, the survey found. Among people aged 16 to 24, interest in newspaper news grew to 64% from 53% in a 2006 survey. In the 25-34 cohort, interest grew to 61% from 51%.”

So if young people “overwhelmingly” prefer to get their news from the Internet, how come “interest” in newspapers has grown? Apparently, it’s because “newspapers remain the most trusted medium, with 66% of respondents describing the paper as informative and confidence inspiring,” the report quoting the survey says.

I find it hard to believe that 16-24s think that if you have the spare cash to print on dead trees, the news source is more trustworthy than an online one. Also, “interest in newspaper news” does not equate to actually buying the newspaper. Case in point — an overwhelming majority of Journalism students at the University of Lincoln (where I study) do not buy any newspapers, despite heavy discounts available on campus.

Actually, I think I can can count on the fingers of one hand how many times I have seen a student on campus carrying a newspaper in their hand (except the free campus publications) in the last three years. Why, because they can get the same content for free online, while they check their Facebook, Twitter, etc., among other possible reasons.

An interesting tidbit from the survey tackles pay walls: “even in a hypothetical scenario where online-only versions of existing newspapers and magazines cost 75% less than the print versions, only 14% of news consumers said they would pay for the online content.”

So, despite interest in newspapers, young people still prefer online and don’t want pay walls. I’m not sure where the “hope” for newspaper publishers should be found in this story.

I don’t believe magazines/periodicals belong in the new iBook store for the iPad. This store uses the ePub format, which is what the Kindle uses as well, yet periodicals subscriptions on the Amazon reader haven’t really kicked off mainly because of the lack of graphics.

Also, ePub is not easy to update, unlike a website. If news breaks, how will the book-like format be updated? Comments, ratings, etc aren’t available either. All-in-all, not a very convenient solution, and not far from the static print versions.

Now, if you make an app, like the NYT (which is basically a ported version of the Times Reader), and offer it for download, you can update the stories any time, get push notifications, richer multimedia, etc. We also have to keep in mind the vast majority of magazines have websites which are updated daily, despite monthly/weekly print editions.

The only problem (for publishers) is monetizing these apps. The NYT app is free on the iPhone (I understand it will sync with the iPad one) and serves ads. Others, like the Guardian, are charging for it, but don’t serve ads.

But the resemblance between the NYT iPad app and the Times Reader desktop software leads me into thinking that NYT will try to charge for access to sections of the iPad app, like it does in Times Reader (front page stories are free). They already said they are planning another walled garden.

Nevertheless, I believe the App Store, paired with the iPad, offers more possibilities to periodicals publishers than the iBook store does.

Note — this comment is republished and adapted from my response to Will the iPad Save Media? Not Just Yet