Will the figures add up?
Much has been written, blogged, tweeted and commented on regarding the decision to introduce a paywall to the timesonline website.
Introducing a subscription charge to what had previously been a free website was seen as either a retrospective move that was in conflict with the ethos of sharing content for free or a brave move that could herald in new opportunities for a media that is in many cases down on its knees. It depends who you listen to.
What is already certain is that the move has cost the website vast numbers of visitors. While the site itself remains tight lipped at time of writing, estimates vary from around two thirds [http://www.reuters.com/article/idUSTRE66H15G20100718] to somewhere nearer 90% [http://www.digitaljournal.com/article/294970].
But this is only part of the picture. What no-one quite knows yet is whether the move has actually paid off or not. And this will take a long time. There is a simple equation that will determine the immediate revenue generated – number of subscribers x subscription cost. But that only tells part of the puzzle.
The holy grail for many sites for many years has been visitor numbers. When it comes to generating ad revenues the more the merrier has generally been a rule of thumb. So falling visitor numbers may affect capability to generate ad revenue that may or may not cancel out the value of subscriptions.
On the other hand, the goal of all advertising is impact. Return on investment in whatever shape it’s measured. Supposing the subscription model actually focused and refined the visitors to the site into a more clearly identifiable community? Those who are prepared to pay rather than skim around only when it’s free will have greater loyalty to the Times. Perhaps this could create an environment when the right advertising actually sees an increased ROI? It’s a possibility.
The other issue is growth and whether the model is sustainable in the long-term. Debate continues as to what extent the product on offer is a commodity and to what extent it is unique and original. For many people, much of the content they sourced from timesonline can equally be sourced elsewhere. News, sport, entertainment. And from sources that, for at least the foreseeable future, are likely to be free.
At this point in the site’s history it has a rich community of people intimately familiar with the product, because they’ve been using it for free for years. So they know exactly what’s on offer and can make an informed decision about whether to pay for it or not. As the paywall goes up, future potential customers will not have the same insight. OK, you can subscribe for a day and see what you think but how many of us, really, are going to bother? It’s a lot of effort for potentially limited reward.
It’s a tricky question and one that will vex many minds in the media for many years to come. When faced with fundamental challenges, some industries come and go (when was the last you needed a blacksmith? Or an illuminator of manuscripts?) and some evolve.
While no-one is in any doubt as to the challenges facing the media, it remains to be seen just what will constitute a successful response. As the debate continues we have a great opportunity to see whether fortune will favour the brave…