News International today announced the long awaited details of their pay-wall initiative for the Times and Sunday Times websites. Matt Delaney, Account Manager in the MEC Manchester Press team, gives his view on the plans:
We’ve all known about this for a while but it’s all the more exciting now it’s a reality. Murdoch & Co will act as a nice guinea pig and other media owners (& buyers) will be waiting with baited breath to see the results.
There’s a clear strategy to first target the up-market Times audience who are likely to be more loyal to the brand and interested in quality of journalism rather than access to free content. The Sun and NoW will be a much harder sell as I would expect these audiences to be far more fickle in their news browsing habits. Some will view the move as an effort to maintain journalistic integrity and, ultimately, paid content. Others will see it as a petulant & pointless attempt by an over-the-hill old-media magnate to regain some ground on the new order.
My view is that there will be a huge dent in current impression figures but there are various initiatives in place to incentivise subscriptions: £1 per day or £2 for 7 days (rather than £8.50 for the paper version) & mobile apps only available to subscribers. If these maintain some proportion of the existing audience the business model will still hold together relatively well:
“Assuming that only five percent of daily users convert to the paywall system – a standard metric for paywalls – that would bring in £1.83 million if they each buy a £1 daily pass. At a 10 percent conversion, it would net £3.66 million per month for the two papers. If more people of those choose to buy the weekly pass, the revenues would be lower.” (Guardian)
Almost all of the ‘passing traffic’ audience will be lost but there is also a case to say that the quality of audience will increase once the paywall system is initiated. The question is how much advertisers are willing to pay for the ‘privilege’ of reaching this audience.