In June the British newspaper The Times launched a pay wall where it would
charge readers £2 for a weeks subscription or £1 for a one day pass to their two main websites www.thetimes.co.uk and www.sundaytimes.co.uk. These websites on average receive 1.2 million visitors daily. Rupert Murdoch, CEO of News Corporation (its parent company) called it a “defining moment for Journalism”. To launch this they provided visitors with a free trial to test it out the digital edition versions of their print counterparts.
Now these figures have come in so we can see for the first time if their pay-wall strategy paid off.
(Figures obtained by BeehiveCity)
- 150,000 people registered for The Times and Sunday Times websites
during the free trial period
- 15,000 signed up for the payment plan after the trial had expired
- 12,500 people paid for the iPad version of the times app
While only 12% of the original visitors signed up for the free trial, only 1.2% of the original visitors ended up paying. Also the fact that users had to sign up even for the free trial caused over 58% of them to leave the site.
Pay walls are not a new strategy I recall that around the turn of the millennium this technique was tried by the Irish Times (a completely separate company). It only lasted for around a year as all it made people do was to visit competitors sites such as the Irish Independents free news portal.
So where can the publisher generate revenue from their digital editions ?
Lets say that the 15,000 signed up for the £2 plan. That means that over a year those subscribers will generate £1.56 million in revenue. Not a bad figure to start with and I am sure that over the year the News Corp team will market heavily and let’s say that they double it to bring in a total revenue of £3.12 million.
Now, this will not be their only source of revenue. Let look at advertising. This is one of the key forms of revenue for any news website. Lets go with a modest estimation that 2% of visitors will click-through to an adverts and lets say that the site generates 50 pence from each lick through.
So that’s (15,000 *.02) = 300 vistors clicking through daily generating revenue of £150 a day. This would generate £54,600 a year from advertising through the paid wall system. Not a lot, is it? As it stands that would generate revenue of £3.175 million in total revenue for paid access and ad revenue.
What if they removed the pay-wall and regained the 1.2 million visitors – How much revenue would they generate from advertising?
By the same calulctations : (1.2 million * 0.02) = 24,000 vistors clicking-through adverts on a daily basis.
This would generate £12,000 a day on advertising, multiply that by 364 and advertising alone would generate 4.37 million per annum.
So by going free, the site would generate 1.2 million more. Now an aurguement might be that this number of paid subscribers is only a start. They will focus on growing that number of subscribers and that’s a valid point. But at what cost? How much will you need to spend to attract more paid subscribers ? What if you spent that same amount on attracting new readers to your free site?