Paywalls - will they work?

IF NEWSPAPERS keep pursuing the now-standard model of charging for print and giving away content online "you probably had a problem somewhere down the line," observes Dan Sabbagh, founder of media news website Beehive City, former Times media correspondent, and appointed Guardian media editor the week before his talk on paywalls at LFB's November meeting.

Dab Sabbagh
Dan Sabbagh

Dan updated us on current newspaper paywall models. While these may yet save journalism, Dan doesn't see them presenting many opportunities to freelances yet.

The online Guardian, says Dan, brings in about £40 million of which £10 million is from "dating". Online advertising revenue covers only half the editorial budget. Young folk today expect everything online to be free, but they're comfortable with the gadgets, and with paying for "apps" - software for mobile phones, Ipads and such. This allows non-paywall papers to charge something for digital. A Guardian app just launched delivers otherwise-free digital content to Iphones for £4 a year. Rupert Murdoch's Sky TV, a "bit of a joke" at its 1989 launch, now has earns £20 million a month for 10 million subscriptions. Print newspapers and the licence fee model are troubled, but income from Sky's paid-for digital model - bring them in cheap, let them "enjoy the sweets", then up the price - is performing well. So owners News Corp probably felt it was time to try a similar model at the Times.

A Times website paywall went up in June, charging £1 a look or £8.66 a month, less than for the print edition. In November, figures for initial Times paywall sales finally appeared, showing 105,000 people had paid at some point up to then, of which about 50,000 already had subscriptions, with many of the remainder capitalising on introductory offers or being Ipad people. That's "not a bad start," says Dan, given historically low Times circulation of around half a million. Dan estimates Times paywall receipts were about £5.5 million gross up to November.

These numbers are not yet enough to nudge other newspaper companies into trying paywalls. Dan predicted Murdoch will give the Times paywall a trial of at least five years. There are obvious "bundling opportunities" for News Corp - why not offer Times online subs to ten million Sky-subscribing households (almost) for free?

News International's News of the World recently went behind a paywall too, offering "extra assets" like online video exclusives to match print and photo scoops. Dan said he couldn't see the point of a forthcoming paywall for The Sun.

While paywalls may yet save the industry, Dan is concerned about the "type of journalism" they bring.

Print newspapers used to have loyal relationships with their readers who bought the paper for years, showing disinterest or hostility towards the stance of other papers. Online is more like TV, where "viewers can watch C4, ITV, BBC the same evening without seeming weird." Readers now consume stories from many different sources, caring less about provenance. Relationships with papers are now interactive, through comment facilities.

What troubles Dan is that paywalls cut readers off from that "conversation.". That's why the paywall-locked Financial Times still lets non-paying readers have five stories a month for nothing, with political stories often free. It's easier for the FT to impose a paywall, as reading it is necessary "homework" for most subscribers.

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