As one of the world's most prominent newspapers prepares to charge readers to visit its website next year, there comes a glimpse into the online pay-wall model from Rupert Murdoch's Times of London.
News International, the division of Mr. Murdoch's News Corp. that operates its British papers, said on Tuesday that it has reached 105,000 online customer sales for The Times of London and The Sunday Times since the two papers began charging for access to their websites on July 2. However, those sales were coupled with a drop in readership of the sites.
Before the pay sites launched four months ago, timesonline.co.uk regularly attracted more than six million unique visitors per month, according to comScore Inc. Since July, it hasn't gone above 2.5 million. In September, the most recent month for which data is available, the site had 2.37 million unique visitors, a 60-per-cent drop from the same month last year - and visitors racked up 90 per cent fewer page views than a year ago.
Murdoch rival Arthur Sulzberger's paper, The New York Times, is to begin charging for online content next year. News Corp.'s flagship paper, The Wall Street Journal, has a paid digital edition with about 450,000 subscribers, according to the Audit Bureau of Circulations. But the Journal has a strong niche audience of business readers; the experience of the U.K. papers is being watched to see if online readers will also pay for general news.
News International said about half of the sales were monthly website, iPad or Kindle subscriptions, which create a regular secondary revenue stream of roughly $14 to $16 per user in Canadian dollars. The other half were one-off charges for daily or weekly access, which costs £1, or $1.62 per day and double that per week.
That means the company has pulled in at least $85,000 in temporary access charges in the past four months. But the real revenue comes from monthly subscribers, who represent a more dependable source of revenue, assuming they keep the service. The papers are currently bringing in at least $735,000 a month from those subscribers.
In addition to the revenue from online subscriptions, one argument for pay walls is that it is possible to compensate for the drop in readers - and the advertising they attract - by selling to advertisers who are looking for a more targeted (and some say more affluent) audience that is highly engaged with the articles for which it is paying.
A News International spokesperson would not disclose ad revenue, but said the company is encouraged by advertiser response. Firms advertising on the site include HSBC, Microsoft and Lacoste, the company said.
But new-media analyst Kaan Yigit, president of Toronto-based Solutions Research Group, is skeptical that charging users for online access to newspapers will be enough to compensate for declining print revenues in the future, especially for general content. "The content world is moving to a share-and-maximize readership model via Facebook and Twitter because that's what's natural for the digital consumer," Mr. Yigit said. "Pay walls are the exact opposite of that for mass-market information."
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THE TIMES MODEL
Access to The Times of London and The Sunday Times websites costs £1, or $1.62 per day. Access for a week costs twice that.
News International estimates about half the online sales numbers released Tuesday came from daily or weekly purchases, meaning it has pulled in between $85,000 and $160,000 in one-off access charges in the past four months.
The real revenue comes from the other half - the monthly subscribers, either to the site or to its iPad or Kindle editions. They represent a more dependable source of revenue, assuming they keep the service. At $14 per month for a website subscription, or just about $16 for iPad access, that means the papers are bringing in at least $735,000 a month in subscriber revenues.