Read all about it – at a price

As print newspapers face fierce competition from digital media, the concept of charging readers for online content has been a hot topic of debate.  However, with news this week that The Times has lost two thirds of its online audience since erecting a pay wall in early July, this might not be the digital silver lining newspaper moguls were hoping for.

In fact, online readership of The Times had been predicted to drop by as much as 90 per cent and The Guardian is claiming that this figure is nearer the mark when the massive decline in web traffic is over the last three weeks is taken into account.  Readership is expected to fall further once the Murdoch-owned paper removes its introductory offer of £1 for a month’s access.  From August, readers will be charged £1 a day to view content or £2 per week.

It is not yet clear whether the new revenue generated will be sufficient to shore up the struggling print title – if the estimated 15,000 daily online subscribers agree to pay for the £2 a week offer, the pay wall will generate £1.4m a year.  However, it costs £100m a year to run editorial operations at The Times and Sunday Times;  News International’s accounts to June 2009 show a loss of about £240,000 a day for both titles; and last month’s ABCs show a fall in monthly circulation of 14 per cent to 503,642.  With the Guardian having just announced £26m-worth of cost-cutting to reduce the £100,000-a-day loss it was making last year, there is a big question over how long the presses can keep running.

The advent of the worldwide web has meant that we are now all used to enjoying instant FREE access to almost any information we want, not to mention music and videos.  It is difficult to see how the paid-for content model can work given this mindset and the fact that similar information is available from other websites free.  The only way subscribers will be persuaded to pay for access is if the content has more perceived value as it offers deeper analysis and commentary than is available elsewhere – both the FT and the Wall Street Journal have proved that this is a viable option.  Some titles such as The Times and Guardian are also looking at developing readers’ clubs that build on customer loyalty by giving added benefits and content in return for a fee. 

There is a place for newspapers in the digital 21^st century, but as with any business, an ability to evolve and innovate is vital.