3 Reasons Murdoch’s Newspaper Pay Wall Could Work

When The Times of London erected a pay barrier, they publically assumed that it would loose up to 90% of its traffic.  To-date, the Times has lost about two thirds of its traffic and is projected to loose about 85% of its pre-pay wall traffic based on online tracking firm Experian Hitwise’s analysis. The critical question is whether the Times will generate sufficient revenue from the move.

While the WSJ.com, FT.com and Economist.com are considered the darlings of paid content, each of these online versions offers some portion of their content for free as a teaser. These mixed media entities have the advantage that many of their readers need their information to effectively perform their jobs and may have their subscriptions subsidized by their companies.

It’s a safe bet that Murdoch, who owns the WSJ, has transferred his learnings to The Times of London. When a user tries to read a Times story, a pay option pops up. Clicking through, the reader can choose a one-day pass or a 30-day pass, both of which cost £1. Bundling online news, email newsletters and alerts, mobile edition, games and other undisclosed “member benefits”, the Times has made the model an all or nothing option while most other models contain a mix paid and free content.

Here are three reasons that the Times’ pay model could be profitable and give other media entities hope.

  1. No samples available. The Times has restricted its content to maximize its paid readership. Readers who want the quality reporting for which the Times is known may be considered a unique audience segment that is willing to pay for the content.
  2. Multiple device accessibility. Consumers are willing to pay to have quality content delivered to their e-books, most notably Kindles and iPads as well as to mobile devices like iPhones and Droids. In this context, the Times pricing may be considered more reasonable.
  3. Diverse offering. Unlike other media entities which charge separately for targeted use of their products like crossword puzzles, the Times makes everyone pay the same amount. This makes sense since regardless of how many sections of the Sunday newspaper you want, you must buy the entire newspaper.

Because subscriptions tend to drop off after the trial period, it may be necessary to wait another couple of months to truly determine the impact of the Times’ pay barrier and see whether one month purchasers continue their subscriptions at the higher £2 per month price.

Happy marketing,
Heidi Cohen

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