

The Times UK Lost 4 Million Readers To Its Paywall Experiment - ssclafani
http://techcrunch.com/2010/11/02/times-paywall-4-million-readers/

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mchafkin
I don't understand how this is being spun as a failure. It sounds like a
success based on the bottom line:

"Depending on the actual CPM, financially they are doing at least two to four
times better than they were before. And that is with only about 1.5 percent of
their former readers becoming paying subscribers."

Sounds pretty good to me.

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mattmaroon
For the most part it isn't. I saw this reported in the mainstream media a
couple times today and it was spun as a resounding success.

Tech blogs are run by ideologues in favor of everything being free.

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ig1
Looks like Rupert Murdoch gambled correctly. Congratulations to him for taking
a high-risk move in the face of huge opposition.

I think it has a valuable lesson for entrepreneurs that sometimes taking the
unpopular route can be the correct business decision.

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rwmj
My blog, daily readership of just under 1000, can now boast an audience that
is 1% of the size of a national UK newspaper. Except my blog costs next to
nothing to run, maybe an hour a day and use of a laptop.

The cost basis alone of the Times website is _clearly and massively wrong_. At
the very least if this business decision is good (losing 99% of your audience
and hiding yourself from Google is at best dubious), but if it still makes
sense, someone else can come along and undercut them on cost and make even
more money.

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ig1
Put some ads on your blog. You'll make maybe $300-400/year.

You'll essentially be making $1/hour. Advertising doesn't generate anywhere
enough revenue to cover a journalists salary let alone the overheads of a news
gathering organization.

~~~
MichaelGG
Really? According to[1], print advertising brought in over $47 billion in
2005. Skip to 2009 and that number a bit over half (24.8BN), with online
newspaper advertising not even getting in 3BN. That seems like a major loss in
revenue to newspapers, one that must be making an impact.

According to the NYT's 10-K [2], 53% of revenue comes from advertising! Yet in
2005, 66% did [3].

Also remember as print subscribers fall off, those costs fall off too. The raw
cost of materials was around 30% of subscriber revenue, although I think they
trimmed the size of it down to help out there. Wages for the actual print side
are another fair portion.

So, contrary to other claims, it would seem that advertising generates quite
enough revenue to cover journalists.

EDIT: Perhaps _online_ advertising isn't enough to cover salaries, but that's
a separate issue. The newspapers are trying to make a transition as that nice
money from advertising (especially classifieds) dries up. They can whine and
complain about people "getting stuff for free" but it doesn't change the fact
they are painfully adjusting to a new business model.

1: [http://www.naa.org/TrendsandNumbers/Advertising-
Expenditures...](http://www.naa.org/TrendsandNumbers/Advertising-
Expenditures.aspx) 2:
[http://investing.businessweek.com/research/stocks/financials...](http://investing.businessweek.com/research/stocks/financials/drawFiling.asp?docKey=136-000119312510036478-40RGSMR85LU9ELC7LLSMAE5QCT&docFormat=HTM&formType=10-K)
3: <http://www.nytco.com/pdf/annual_2005/2005NYTannual.pdf>

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MichaelGG
Techdirt has a nice writeup of how the numbers are not as good as they make
them out to be. For instance, the full price is 2 pounds/week, but there is a
trial right now for 1 pound a month.

[http://www.techdirt.com/articles/20101102/02570411678/murdoc...](http://www.techdirt.com/articles/20101102/02570411678/murdoch-
s-paywall-numbers-sound-better-than-they-really-are.shtml)

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andrewgioia
The article title is pretty misleading here. It starts off citing a 62% drop
in uniques and 90% drop in pageviews and how disastrous it's been, but
concludes that they're actually netting $600,000 more per month from the
subscription revenue than they would if they kept it free with ads. Assuming
those CPM figures are accurate, that sounds like a pretty good business
decision, especially with a more focused user base that actually places value
in the paper's content.

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ibejoeb
From the other perspective, as the new york times puts it:

"More Than 100,000 Pay for British News Site"

[https://www.nytimes.com/2010/11/03/business/media/03newscorp...](https://www.nytimes.com/2010/11/03/business/media/03newscorp.html)

~~~
olegkikin
$16 per month * 100,000 * 12 months = $19.2 M per year

Would 4 million readers bring that much in ad revenue?

Depends on how good their ad sales team is.

Here's Alexa graph:
[http://traffic.alexa.com/graph?&w=400&h=220&o=f&...](http://traffic.alexa.com/graph?&w=400&h=220&o=f&c=1&y=r&b=ffffff&n=666666&r=2y&u=timesonline.co.uk)

~~~
malandrew
No. I calculated the revenue per user per month for the NY Times a while ago
and based on 2008 figures, it was about 71 cents per user per month.

I was using numbers from several different sources when I made that
calculation so I can't guarantee its accuracy.

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sin7
0.71 $/user/month * 4,000,000 user * 12 month/year = 34,080,000 $/year > $19.2
M

What am I doing wrong?

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jrockway
Is scaling up your architecture 40x free?

(Actually, for static content, it might be. But remember, each user using your
site has some incremental cost. If the incremental cost exceeds what they
generate in ad revenue, you lose.)

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seabee
I dare say the cost of producing the content far exceeds the cost of serving
it up to people.

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carbocation
>"Depending on the actual CPM, financially they are doing at least two to four
times better than they were before."

~~~
guelo
The problem is over time as noone links to their stories they slowly lose
relevancy and their brand diminishes. Remember, the future of news is online,
and right now they are probably at their peak number of subscribers. They have
nowhere to go but down.

~~~
timthorn
The Times is the establisment newspaper in the UK - it's like the BBC of
print. The UK newspaper market is not like the US and is still pretty healthy;
The Times isn't going anywhere in the near future.

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bigfudge
Are you based in the UK? Do you read The Times? There might be lingering
perception that the times is a quality paper — perhaps we all watch too many
re-runs of Jeeves and Wooster — but the Times is more of a Sky News than a
BBC.

~~~
timthorn
Yes, I'm UK based. I read The Times, Telegraph, Guardian or FT, depending on
the day.

Whilst I think BBC News on radio and TV is good quality, the website is often
of appaling quality.

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gamble
Good for them. I heartily encourage News Corp to put _all_ of their newspapers
behind pay walls. In fact, if my meager contribution were enough to convince
them, I would be the first in line to pay so that all of their television news
could remain safely behind a pay wall as well. Godspeed, Mr. Murdoch.

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junkbit
Here's a link from The Times front page with their own take on the numbers

[http://www.thetimes.co.uk/tto/business/industries/media/arti...](http://www.thetimes.co.uk/tto/business/industries/media/article2791089.ece)

~~~
rwmj
Sorry, couldn't read that, it's behind some sort of paywall :-)

~~~
junkbit
EDIT: Sorry if I sounded whiny, but you had to click on the link so a smiley
face would have spoiled the joke

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og1
Also, which I think was not mentioned is they get to pay less operational
expenses because the bandwidth used is lower.

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iuguy
A lot of people have been talking about this as a failure, but I'm not so sure
it's either a straight failure or success.

The Times lost a lot of traction, but in doing so gained a lot of revenue both
direct and indirect. Add to that the reduction in potential overhead (server
100,000 users instead of millions) and the ability to add content from the
main newspaper without fear of it being 'stolen' (compared to if it was open -
yes I know it'll be shared in some form anyway, it's news after all, but
that's not necessarily how the powers that be may perceive it, and they may
feel it's better to push content from the dead tree version out. I don't know,
I don't subscribe to either) and you have something that is significantly more
profitable than before. If that's the goal, then they win. If bums on seats is
the goal, then they lose.

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omh
As the comments at TC discuss, this doesn't take account of how many ads are
running per page, and depending on how the various numbers stack up it could
go either way. But if they were making more money from this, wouldn't today's
press releases have boasted about this, rather than just the increased
numbers?

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estel
Large media companies such as News Corp seem exceptionally wary about
advertising their revenue and profit margins; so it would have massively
surprised me had they done this.

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Quarrelsome
Couple of things to ponder considering future audiences.

a) How many of those 105,000 subs do we think are under 40 yrs old?

b) Try to sign up to the site and you will note something interesting when
entering in your DOB. This text:

"You must be 18 or over to use our websites"

I assume this is because most payment processes don't cater for < 18s. But
still, think about it, it is now an over 18s ONLY newsite.

Therefore I think the future of The Times looks actually quite bleak due to
the lack of future readership.

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axod
I don't think "The Times" has ever been a 'young' newspaper. I'd expect its
reader demographics to be heavily skewed toward 30+ year olds. So I don't
think this is much of a change from that.

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ig1
No newspaper has strong under-18 readership, even under-21 readership is
fairly small for most papers. Most newspaper readers don't start until they're
in their mid-20s.

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axod
FWIW, Newspapers such as "The sun" I'd expect to have a far younger readership
than "The Times".

eg Tabloids are read by the young, grown up broadsheets by the old.

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gaius
The Times experience on the iPad is pretty good. That's the future - custom
clients whose owners are comfortable making small payments on a whim.

(Full disclosure, I am a Times subscriber)

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ry0ohki
I wants mines for free.

