The Times behind a paywall: Can Rupert Murdoch win?

The digital version of The Times is now behind a paywall. Readership will drop, for sure. But will owner Rupert Murdoch still be the winner?

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The decision to put the digital versions of UK newspapers The Times and The Sunday Times behind a paywall is probably the boldest move by a media company this year. It both has the potential of changing the rules of the game for news publishers as well as proving for everyone that news no longer has any value.

Will Rupert Murdoch and  The Times succeed? How much money will the paywall bring in?

I don’t know. And I am quite confident that most media analysts have no clue either. We certainly wish we knew. But in fact we are all in unexplored territory here.

This much is clear, though: Most media companies have realized that depending on display ads alone is no longer sufficient. In fact it is not only insufficient, but quite risky as well, at least if we consider it as the only source of income.

That’s why we all hunt for user payment. We dream about a source of income that is fresh and brings in new money. What is better than eager readers staying in line to pay for our content – the very core of any media business?

There is only one problem with this strategy: Do we really know if readers will pay or not?

The question is much harder to answer than many media excutives would imagine. That is why Rupert Murcoch is so brave. He has a strong conviction about what should be the future and acts according to it. But in doing so he also puts the digital future of The Times on the line in a risky game.  Murdoch may turn out to be a media hero – or the big loser. There is a chance that The Times will fail and readers will not be willing to pay.

I have argued earlier that media companies in order to charge for digital content needs to be very strong in at least one of five areas:

• Unique Content
• Unique Convenience
• Unique Usefulness
• Unique Packaging
• Unique Experience

Please do read the original blog post to follow the reasoning of this one.

So let us look at the paywall of The Times in the context of this model.

The Times, as most national newspapers, is primarily in the general news market. They cover a broad range of issues – and claims to do so in a better way that competitors.

Does The Times offer Unique Convenience in any way? Not in terms of consuming the content. But some benefits in the Times Plus membership package, such as customized news bulletins, do give some advantage. But it is not a major selling point.

What about Unique Usefulness? To some extent – by benefits offered through Times Plus, such as discounts on books, concerts, travels, etc.

Does The Times offer Unique Packaging? I would argue not. Although the design is somewhat more “newspaper like” and with less advertisements than most news sites, I would think this is not being perceived as very distinct compared to for instance The Guardian and The Telegraph.

That leaves the two most important elements for The Times to succeed with its paywall: Unique Content and Unique Experience. Many would argue that you could find the same content for free elsewere on the web. That is largely true. Yet what is most important is not whether you could find the same information elsewhere, but to what extent readers perceive the content, perspectives and writing style of The Times to be unique.  Do readers value the fact that it is written by The Times and its journalists ? Or doesn’t it matter? That brings us to whether they offer a unique experience, which is the emotional and social component of the offering. Is there a perceived value among readers in belonging to “The Times family”?

I would guess there might be. It all boils down to how strong The Times brand is in its relationship with readers. If the relationship is strong there is a fair chance that the media company could succeed in its paywall strategy.

In any case The Times web site will not be without traffic. All full newspaper subscribers get free access, which should ensure a minimum level of traffic that will still make it interesting for advertisers.

But Rupert Murdoch is taking big risks. The first is whether the paywall actually will work. It might. The second, and biggest risk, is what it does to the longterm brand relationship to its readers.

Will a paywall over time erode The Times’ relationship with readers, especially the young ones? If so, what consequences will that have?

“The value of a media business lies in its dialogue with consumers”, argues Nich Thomas at Forrester Research.  (Also published at Paid Content) .

In the report “Creating New Revenue around Content: Find your Popcorn” he underlines a very interesting point:

“The key is not to monetize the content, but to monetize the audience”.

Nick Thomas gives the thumb up for the Times Plus concept, arguing that this is a smarter concept than just implementing a simple paywall. That may be so – as long as you have a large number of users. But will a paywall like The Times over time reduce the number of people the news company have a relationship with? And if so: What will be the price of that? In my opinion that is a very important question for the long term, especially as newspaper readers are getting older and the web sites become the most important channels news companies have to the next generation of readers. And it is a strong argument against putting up a full-blown paywall as The Times has done, which essentially means taking your site away from the Internet link economy.

Read also on BetaTales:

• Five ways to build Unique Value for paid digital content
• How newspapers offer less Unique Value than before

Summing up: The Times’ paywall is the boldest move by a major media company this year and we are all very curious to see how it will play out. I think there is a fair chance it might actually work – and for sure the experiences gained will strongly influence decisions taken by media companies all over the world in the next year. But even if the paywall pays off in the short term, the longterm price of a weaker readership base may turn out to be too high.

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Related articles by other sources

• Why Murdoch’s paywall could actually work (story-review.com)
• From distribution to link economy (baekdal.com)
• Free content isn’t a right (telegraph.co.uk)
• Rupert Murdoch Gets Shy: Tries To Hide Traffic To His Pre-Paywalled Sites (techdirt.com)
• Will the paywall work? Thanks to Murdoch, we’ll soon find out (guardian.co.uk)
• Newspapers look for ways to survive in an internet age (canada.com)

Tagged as: content, digital future, media, newspapers, Rupert Murdoch, Times, UK, user payment