Paywalls

This morning a PR team from The Times was dishing out free coffee to colleagues at work. They’re promoting the fact that from today, The Times and Sunday Times have new websites. And with them come paywalls.
As it happens, I don’t drink coffee…
Last week I had the pleasure of attending a live recording of Radio Four’s The Media Show. It was a debate on the merits of paywalls for newspapers between Guardian editor Alan Rusbridger and Sunday Times editor John Witherow.
The Times and Sunday Times sites will shortly disappear behind a paywall with charges for access set at £1 for a day, and £2 a week. Access will also be available to print subscribers.
The programme recorded for a good hour, although it was edited down to half an hour for broadcast, and you can listen to that here.
Here, for what they’re worth, are my current thoughts on paywalls.
Newspapers are certainly losing money. While in better times, The Sunday Times has been a pretty profitable beast, it’s not currently. And The Guardian is suffering too, relying on a broader GMG to bring in revenues that prop the newspaper up under the terms of The Scott Trust.
So what’s the answer?
The free route surely remains the safer bet. The Guardian has done exceptionally well expanding out of the UK. While Witherow talked about how valueless ex-UK readers were to his web-offering, I think that he and News Group are missing a trick. Selling approrpriate advertising in different locales is very achievable, and the titles his group owns are famous enough around the world to deliver large readerships.
Rusbridger talked about the vast amounts that they were making from advertising. It sounds quite healthy – albeit that their costs are fairly “healthy” too.
So does that mean that The Guardian is right and The Sunday Times is wrong?
Well it’s not quite that simple.
Why The Sunday Times Isn’t Right

• The payment plan, as it’s laid out is too draconian. I can’t for the life of me think why they don’t at least have some kind of metering system in place. Even the FT, which is acknowledged to be a special case, has some form of metering. And the FT is very profitable indeed. They realise that as an individual, I’m unlikely to subscribe to their site. But I only read one or two articles there a month. Am I less valuable because of that, as Witherow argues is true of many of his readers who read just a couple of articles and then disappear?
  No.
  You can serve me separate, appropriate advertising. As things stand, if someone sends me a link to something interesting in The Times, I’ll face a request to pay a pound if I want to read it. If it was published that day, it’d actually be in my interest to instead buy a print copy of the paper. Less hassle getting my credit card out, setting up an account and so on.
• They haven’t developed a micropayement scheme. They’ve gone for the easy option of just putting a payment mechanism in place that charges me one pound or more dependent on the length I’d like to subscribe. If, instead, they’d developed a scheme – a new PayPal perhaps – that many newspaper and other retailers joined, and then let me painlessly purchase an article for say, 5p, then that’d have been smart.
  This is where Apple wins. You enter your card details up front, and then it’s small amounts as you go. Apple carefully doesn’t process the first 79p track you buy to your credit card. They wait a few days in the hope that a meaningful amount is built up reducing their processing costs.
  But mostly it’s about me not worrying too much if something costs me just 5p, and there being a payment mechanism in place that makes sense for a vendor. That means scale to make sense.
• Current subscribers to The Times may miss out. If you contract directly with the paper, then it can arrange daily delivery to your door at a preferential fee. But many people prefer to use and support their local newsagent. Indeed John Witherow made that point himself, despite it costing more for readers. Think about middle-class Times readers concerned about the welfare of their local newsagent/village store? But if you do that, The Times doesn’t know about you. And you don’t get free inclusive access to The Times’ websites. That’s despite the fact that ordering from your local newsagent will almost certainly be more expensive than dealing directly with The Times.
• Finding new readers is going to be exceptionally hard. How will I know whether I like the product if I have to pay from the outset? “Freemium” is surely the better model to persuade people like me who only irregularly buy the paper edition of The Times but do visit their site a couple of times a month, that I should think about a subscription.

So does that mean The Guardian is right?

• I don’t think they’ve currently got their app model right. Currently you pay a one-off fee, and that gets you as much of The Guardian as you like. The subscription model – paying say £2.99 a quarter – is better, and is available via iTunes now.
  Perhaps when the iPad version comes along that’ll be the case (Hint: I’d pay now for an Android version). But Rusbridger noted that the trouble with the iPad was that the web version looked so good, it was a struggle to come up with reasons why you’d buy an app. I guess offline caching is about the main reason – synchronise data when you’re in a wifi zone, and then read offline later.
• Despite making upwards of £40m via advertising a year, The Guardian loses money. That’s the inherent problem. And that’s why even The Guardian will be watching carefully to see what learnings Murdoch takes from his experiment.

In short then, there are no right answers. The FT and Wall Street Journal can make their models work because they have exclusive data that nobody else can get, and is mostly paid for by employers. The Economist works because it’s a business magazine that works to a large extent on a subscription model. It makes sense bundling web access with the paper subscription.
The Times is a general newspaper. That news is available in lots of different places. They need to make money, but this almost certainly isn’t the right way. Be wary of early subscriber numbers as their paper subscription package probably does reasonably well, and those people will automatically be considered subscribers.
And watching what their big name columnists have to say will be interesting. They were the people who got the New York Times to end their previous paywall experiement. They might be well paid by their papers to have those opinions, but they hate it when others – who’s views are free to read – get bigger traction.
I don’t think most newspaper executives quite understand the link culture and the effect that can have on traffic. The Guardian does. And I think the Mail does. It’s that latter paper that’s going to be worth watching the most. A popular, big website (it might be full of awful stuff, but it’s popular), that while not directly competing with The Times, might well pick up a lot of the slack from The Times. We’ll see.
I’d like to see a newspaper group really do something clever. A deal to give me a free iPad (or similar – because we all know that the iPad is vastly over-priced) if I take up a two year subscription – like my mobile phone company does.
I’d look at perhaps the biggest success in publishing in the last ten years – The Metro. It’s not a bad product, but it’s certainly not good. You could get quite a lot of the same news in the same depth reading Ceefax in the morning. But it’s successful because it’s free. For between 20p and £1 you could pick up a much better paper with far more interesting editorial. But even 20p is not free. And so, every morning, Metro’s dump bin at my local station is empty well before 8am.