Tuesday, June 1, 2010

Rupert Murdoch's paywall at the Times may not be a disaster

by Peter Preston, The Observer  

Those who make their livings in outer cyberspace, the wizards of web wisdom, fear the worst. Rupert Murdoch's bold new paywalls, now in construction around the Times and Sunday Times sites, are not going to work. Who'll pay £2 a week for this mush of generally available news, rather pompously decked out to look like an "elite" printed paper on your laptop?

But talk experience and human nature as well. Experience in print tells us that newspapers can be different. The Sun and the Times live on different planets. And human nature often dictates a bit of something different, too, not more of the same. The "simple choices" the gurus espy are more complicated already.

So, once I've stumped up cash for access, I don't necessarily look at paywalled paper newspaper sites in the same old digital way. I may read them as I would a print newspaper. I'm not clicking around, adding page view to page view, following a tale that interests me from site to site. Consistency counts. My habits have changed because I've paid good money. The stuff behind the wall looks like a newspaper and basically exists to be read as an electronic newspaper. There's a certain logic here.

These would-be Wapping wonders aren't intended for hardcore surfers with time to spare (so they can blog and tweet for hours on end). They're a 20-minute scan before you leave home to work, maybe an iPhone read on the train, then a point of reference during the day. They are cannily intended to act as familiar, text-heavy friends, bringing a predictable view that suits you, alongside the possibility of direct contact with those who write the words and take the pictures. They are not – repeat, not – competitors in some doomed race against video-rich broadcasting sites.

Retro in look and thinking? Perhaps: but a paper like the Times, bathed in "Daily Register" nostalgia, royal engagements and next year's term dates at Shrewsbury school, already knows a good retro pitch when it sees one. Moreover, with 125,000-plus copies already sold to regular subscribers who will get their website access for free, the audience size potentially involved isn't at all dusty.

Of course the numbers prepared to pay won't be anything like the numbers of unique browsers delivered by the leading free sites of other nationals. See the Mail racing to 40,500,000 in April, more than 8m ahead of the Guardian and Telegraph – that's 75% up year-on-year. It's amazing what a shrewdly assembled string of celebrity pictures can achieve on the net. The sudden swings and roundabouts leave print fluctuations far behind.

But those big unique numbers don't spell big money rolling in. They may remain the basic industry standard measurement for advertisers, a seemingly mountainous pile of visits to build ad rates on, yet in fact the number of surfers pausing long enough to buy anything on the web from newspaper sites is hugely more limited: about 85% never click on display ads, according to one recent US survey.

It's engaged readers who count – those who trust you and return time and again, then spend some of their cash on that stable relationship. And here's where so much of the chat about Murdoch's gamble swings way off beam. Just like the print battle between his Wall Street Journal and the New York Times, this one is about ad revenues, not soaring circulation.

Murdoch may still spend millions cutting cover prices on his soaraway Sun, but big numbers aren't the issue. So perhaps he'll lose 95% or more of his unique browsers behind the new wall. So 19.5 million out of 20 million may stay away. So what? The hard question is how much those 95% are worth, and whether they can ever generate enough cash to help keep traditional newspapers in business.

If they can't, that means they're useless drugs, astronomical totals of nothing much, signifying even less that matters. Treat a £2 a week fee as proof of commitment, though, and you engage advertisers' attention immediately (just as you do via reader clubs, bargain offers and all the sweeteners in such current Fleet Street demand). Mix in the Times's own print business readership figures, results leaving the FT far off the readership pace, and you can begin to see a ripe opportunity for tough sales talking.

The success or failure of this paywall, in short, will not be settled over a couple of months of subscription crunching: more like over a couple of years of revenue assessments. The temptation, because the web is such an instant medium, will be to make instant assessments based on quite extraneous factors (such as: Do you hate Rupert, or not?) The reality lies in what happens over time.

My bet is that paywalls are only part of the answer for newspapers' futures, one survival stream among many (some yet to be discovered). No plausible arithmetic shows a great river of revenue replacing old business models at a stroke. But rising walls will surely have a part to play, for part of the time. For instance, they already make the whole WSJ package a more profitable bet – and haven't affected a 20% increase in that newspaper's print readership since News Corporation bought it three years ago. They will surely help other papers – or specialist sections of papers – to coin an extra penny.

But what works on the Journal over there may not work on the Times over here – or the Sun in a few months' time. Like those web wizards, you can tout building walls as some fundamental decision which defines what can live or die. Don't believe it. "Simple" choices are much more complicated than that.

Article first published on The Guardian, UK : http://www.guardian.co.uk/media/2010/may/30/rupert-murdoch-times-paywall