Today’s exciting brouhaha is that The Times have announce that they plan to start charging for access to their online content from June of this year. Apparently, their web elves have been hard at work at a nice new website, which they’re going to let everyone play with for a while and then tuck it up safely behind a £1-per-day paywall.
The public reaction seems to be split between horror and ridicule, but the majority of the discussion has focussed on the debate over weather or not content on the web should be free. Personally, I have no problem at all with websites that operate under a payed subscription model. I don’t expect Flickr to host all my photos for free, and I already pay for my online news consumption via the BBC license fee. (And actually, I’d pay for that twice over to have access to BBC News.)
But that’s not the issue. Well, it’s an issue, but the issue I’m interested in is whether it’s possible for a news site to exist behind a wall of any sort. Anyone who runs a relatively well-trafficked website will be able to tell you that it’s typical for the majority of traffic to be fly-by visitors from search engines and organic website referrals. A relatively smaller percentage of visitors arrive at your site by purposefully navigating directly to it (keying the URL, hitting a bookmark etc).
For a news site, you could say that it’s likely more people will directly navigate to the site each day to check the news – but by the same measure a news site has masses of content on varied topics and so is also going to have a lot of search engine traffic too. The way you grow a site is by converting those fly-by visitors into regular users. You want to make sure that visitors frequently end up on your site and are impressed with the content when they get there. If that happens enough, they’ll start visiting you directly and become a regular user.
So what happens when we put a wall into the mix? This isn’t unprecedented for a news site. The New York Times hides their content behind an account sign up screen. The upshot of which? I just had to Google for their name, because I couldn’t remember who they were, I’ve never read a New York Times article, and guess what, everyone stopped linking to their content. If you put a wall in front of your content, you’ve basically got to say goodbye to all that fly-by traffic. The majority of your traffic.
I can see newspaper bosses being okay with that, thinking that all that traffic is only costing them money, and it’s the regular visitors that they care about. And if they could just get those visitors to pay like they do for the printed version, they’ll be laughing. But to keep going they have to not only maintain that paying audience, but grow it too. Publicly traded companies (like The Times’ owners News Corporation) need to see the value of their businesses increase, not just hold steady. So how do you grow a website’s audience? By converting those fly-by visitors to subscribers. Those fly-by visitors you no longer have.
I’m glad this isn’t happening to a news organisation I care about.
Comments
Hey Drew,
Spot on.
a) It’s Murdoch. I don’t like him or his business. No Sky in my house.
b) It’s an old school business brain behind this scheme
c) The Guardian got it right by creating a paid for iPhone app.
This add values for mobile (currently iPhone) users who have read The Guardian Online, like the content and want a nice way of consuming that content
Jay
Well observed Drew. I agree with everything you’ve said. I also have to agree with Jay that the only way to make money and to keep growing your user base is by value-added services. I think a better approach for them would have been to keep the generic news stuff free (people will simply go to free sites to see that anyway), and to charge for more bespoke content; thought pieces, columnist content, etc. It wouldn’t surprise me to see them go that way after they realise that their userbase has stagnated shortly after switching on the paywall.
For me, I don’t mind the pay-for-content system either. My big disappointment is with these companies like NYT that have the capabilities and resources to totally rethink how we generate revenue online and how people interact with content. They just aren’t doing it. HULU, with their talk of paid content, is the same. They could completely renovate the way we work and build a whole new model, but they are stuck in the same old ways.
I just want to see one of these companies take a big risk. Find a new way to make money. Be a leader.
I like (and subscribe) to the 1-week delay model that Linux Weekly News (LWN) uses. It seems to tackle your point head on. You pay if you want ‘news’ but the content becomes freely available and linkable in a relatively short period of time. Perhaps this only ‘works’ for LWN because it puts up most of its content in weekly issues.
Paid content walls work and they work even better if the news being published is not easily accessible elsewhere.
Like every other business in the world, The Times needs to generate revenue to exist. By giving away their news and information for free, they’re constantly losing money that needs to be made up elsewhere. Payroll, insurance, equipment, paper and buildings cost a fortune. Banner ads and Google AdWords will only cover a tiny portion of that cost.
Imagine if you always gave your personal skills, knowledge and expertise away for free. No clients ever paid a dime. How long would your doors stay open? That’s the situation news media companies are in.
Geof – did you even read the post? I’m not discussing whether or not it’s right to charge for news content.
Drew, I actually read your post a couple of times before I left a comment, but I understand how my thoughts may have come across otherwise.
What I was trying to say is that, simply, The Times needs to generate revenue in order to exist. If that income comes only from a small portion of their overall readership, perhaps that’s perfectly sufficient.
From a conversion point of view, it could be that they see their highest conversion rate from regular, returning visitors rather than through random fly-by visitors. Furthermore, those returning visitors, what if they’re the most profitable fans of the publication and recommend it to others (email to a friend forms, etc), who then sign up for a paid subscription? This is all traceable data; data that could have given them the insight and confidence to move forward with the new approach.
I just wouldn’t be so quick to jump to the conclusion that fly-by visitor traffic is necessarily the most important traffic to capture; it could also be the least profitable and most costly.
Personally, I can’t see why I’d pay for access to news when I have the BBC’s offering, comprehensive and funded (gladly) by my licence fee – However, I can see theoretically how this paid model might work.
Since it’s fair to expect that a large percentage of visitors are coming from search engines – especially with the rise of up to the minute search results – and external links, and that those new visitors will be lost thanks to the new model, the only way I can see this working is if they lock certain talent into contracts allowing them to write only for the Times. Then you’re paying for their unique content, rather than up to date news.
New subscribers may still come from reading articles in the physical version of the paper and switching to the online version. I agree with Matt though that it would make sense in this scenario to keep generic news free, if only to avoid losing CPM advertising revenue.
It’ll be interesting to see how this pans out, but it does seem to me like an old buisness model trying to force itself on a medium it’s just not suited to.
I don’t know how exactly Times will establish this pay wall, but I think (and hope) they are smart enough to bypass all the mentioned problems. Nobody wants to pay for daily news – in physical world neither – it is just such a low value added information which you can get through so many channels (listening to your grandma Sunday’s afternoon). What successful offline and online content business charges for today is premium content: business news, news production ‘retailers’ (Reuters), domain specific news or content, research, twitter data … and this is nothing new: people always paid for National Geographic foto beauty, they still do; people always paid for hi-res paper version of Times, they still do;
What IS different, is that paper page is more expensive than a html page and that digitalized content is easily reproduced. And that alone!
People still want to pay for content that actually makes a difference and has added value – and they do! This “online content crisis” is just an excuse for poor content and lack of innovation. I might go as far as calling it a “getting real” issue: how many news companies do detailed research on what users actually want when they buy a newspaper vs read news online?
And Google is NOT an issue whatsoever either. Searching for science paper for example has never been easier – there even exists Google Scholar! And yet there are so many successful online paper libraries. How come? There are ways.
Makes you awfully grateful for the BBC quite frankly.