There have been many confusing messages in the media about the success or failure of the Times paywall. Competitor publications have predictably claimed it to be a huge failure; other figures suggest a drop off of two thirds readership from free to paid is a success against the 90% drop off the Times had expected. Claims that the Times is now “an empty world” seem inconclusive with the publication themselves have declined to comment.
For me, whatever level the user base has dropped to, this is just phase 1 of the paywall process, and it will be the next 6-12 months that dictate the true success of the paywall as it begins to take shape and there are a number of key factors which will determine its true success.
Quality of content
If you are going to charge people for access to news articles and opinion, it’s going to have to be better than other articles available for free elsewhere. The Times will have to ensure their editorial content is going to have to be of a higher quality than their competition to justify the charge and prove that the money is going to good use.
Just because the paywall is in place doesn’t mean the Times has written off advertising as a revenue channel, far from it. In fact having registered users in a closed network opens up a host of additional options for targeted advertising. Historically advertising in newspapers and on their online versions has been done based on readership and audience profiles. The information required to sign up for the paywall will enable the Times to offer targeting options based on an individual user, rather than an aggregated version of the whole group. This type of targeting general allows for more premium pricing and if they manage to do it intelligently could generate serious income.
Word of mouth
At the moment the Times are the bad guys for charging for content. A small group have decided to stick with it and if the Times can prove the value to this group, then this group will become key to future growth. When people find out that somebody pays for the Times content, they are bound to ask “why?”, and “whats it like?”, if the response is positive you have a potential new buyer, if its neutral or negative, then you don’t. If the response is “awesome, great content, a great read and well worth the money” then word will spread.
The Times are the first to introduce a paywall in traditional press, but I doubt they will be the last. Other online publications are going to have to find their own way to make sure revenues generated online cover the overheads of delivering the content. Whilst the competition can sit back and suggest the paywall is a failure for now, there is going to come a point where they have to decide what the route forward for their own online strategy is. And if it materialises that other follow down the paywall route, then the Times will be ahead of the game in terms of making it work.
It’s all about building momentum
All of these points will contribute to building momentum (or not). If you present great editorial to current users, they will spread the word and your user base will grow. Continue to add even more great content and value, and you build a snowball effect. Similar with the advertising, if you build a solid advertising model and targeting options you might convince a few media buyers to give it a go, if it’s good, word will spread. Obviously this requires the Times to get a few things right. If the content isn’t good, or the advertising model is poor, then momentum won’t build and things might go into meltdown. There’s a long road ahead, but it definitely can’t be deemed a success or failure just yet.