Update on Murdoch's Pay Wall

The Times of London went behind a paywall on June 15. In addition, the owner of The Times, Rupert Murdoch, blocked search engines from including Times stories in their search results. The authors must love this! This was covered at the Law Librarian Blog by Mark Giangrande, who also reported on the "steep decline in online viewers" since the changeover to the paywall. One source reports a decline of 65% in online readers, while another reports 90%--both large numbers, to be sure, and large enough that no one could claim that the paywall has been a success so far.

An interesting twist on The Times's paywall experiment is provided by Michael Wolff at Newser. Wolff declares that

Will [Murdoch's] paywall work is the biggest story in the media business, and it would be quite a journalistic coup to document the progress, or lack thereof, that's being made in trying to convince a skeptical world to shell out 2 pounds ($3) a week for what's heretofore been free.

He is not reporting on himself because even less than most news outlets, Murdoch outlets have no objective sense when it comes to their own interests ... or willingness to ask questions which the boss might find uncomfortable, or penchant for anything but the party line. The news from News Corp. is always snarlingly good--even when it is very bad.

My sources say that not only is nobody subscribing to the website, but subscribers to the paper itself--who have free access to the site--are not going beyond the registration page. It's an empty world.

Why would writers want to write for The Times if their work is not going to be read? Some might feel that Murdoch is the "last best hope for getting us paid for our labors" but writers want to be read; as Wolff points out, readers are the "real currency" of writers. Will the paper become irrelevant in a world of free news? The Wall Street Journal is behind a partial paywall and seems to be profitable, but the Journal occupies a very special niche with few real competitors. Can The Times make that claim? What implications does Murdoch's experiment with The Times have for The New York Times, which plans to erect its paywall in 2011? Murdoch's goal seems to be to protect the market for the print newspaper, but hasn't that train already left the station?

Thirty-five Subscribers

We have blogged recently about the decision by The New York Times and other newspapers to put their content behind pay walls. The justification for this move is to generate revenue that will pay for high-quality news operations; the newspaper management states that they cannot afford to give away their content. They might want to take a look at Newsday, the Long Island daily that put its website behind a pay wall in late October. The New York Observer ran a trenchant article about the website today. "So, three months later, how many people have signed up to pay $5 a week, or $260 a year, to get unfettered access to newsday.com?" The answer is thirty-five, which represents gross revenues of about $9,000. As web traffic declines, it is likely that advertisers will flee and take their business elsewhere. One of the reasons people might not want to pay to read Newsday online is that the paper is not what it used to be. It once was a respected publication, but now it has no national correspondents or foreign bureaus. Would higher-quality content lead to more subscribers? All eyes will be on the Times when its pay wall goes live next year.

The Times to Erect a Pay Wall

In 2007, The New York Times dropped a pay wall after failing to realize expected revenues. Many online readers breathed a sigh of relief, and continued to enjoy the free online content. Now, however, The Times is planning to "announce the introduction of a so-called 'pay wall' before the much-rumoured launch of Apple's new tablet computer, which is thought to be specially designed for easy newspaper reading, on January 27." This report comes from an article in the Telegraph, a British newspaper. The Telegraph reports that Arthur Sulzberger, Jr., the Times Company chairman, favors "a metered use policy similar to The Financial Times, which allows readers to access some articles for free before they are forced to subscribe." The Financial Times is owned by Rupert Murdoch's News Corporation, as is The Wall Street Journal, which also charges for content. In fact, News Corporation is planning to "introduce charging for all the company's newspaper websites, including The Times, The Sunday Times, The Sun and News of the World. My colleague Vicky Gannon, who sent me the link to the Telegraph article, says it's one thing to charge for The Times, but quite another to charge for The Sun and News of the World, which do not exactly qualify as high-quality content. It looks as if paid access to online newspapers is the wave of the future, and in fact newspapers have to make money from their content if they are survive. Advertising revenues are not enough to sustain a major news-gathering operation. "More than 1,200 news organisations worldwide have signed up with Journalism Online, a new media payment firm whose clients are expected to start rolling out fees soon." It's hard to imagine that most people are going to pay for subscriptions to more than one or two newspapers, making it inevitable that some newspapers will simply not be competitive in the online environment.

The End of Free Content?

This time of year, predictions abound, but most of them turn out to be wide of the mark. However, this prediction, from Newsweek's Techtonic Shifts Blog, has the ring of truth about it. In his post, Barrett Sheridan states that "Many of the startups and media sites that define the e-commerce ecosystem are, at long last, making serious plans to make serious money." He lists Hulu and music sites, including iTunes. Apple recently purchased Lala, a streaming music service, for around $100,000,000. Sheridan opines that Apple bought Lala for "its talented engineers and their cloudy expertise," not for its revenues, which are "negligible."

Owners of print media are also exploring their options. Rupert Murdoch, the owner of News Corporation, is actively exploring put his news sites behind a pay wall this year. According to Sheridan, "That would open the door for competitors to make the same move. The New York Times, for instance, is debating the wisdom of charging for online content too. If Murdoch's plan proves successful, emboldened newspapers and magazines across the country would begin erecting their own digital pay walls." As a consumer, I hate the idea of having to pay for content; I am accustomed to getting it for free. As Sheridan puts it, "Pirate Bay-surfing teens ... think free content is a human right only slightly less essential than oxygen." As a librarian, however, I understand that the only way to ensure the viability of high-quality content, which costs a lot of money to produce, is to put it on a paid footing.