Murdoch's Paywall Numbers Sound Better Than They Really Are

from the let's-dig-in-a-bit... dept

Well, after lots of speculation, News Corp. is finally releasing some numbers on how the paywall is going for The Times and The Sunday Times — of course, spinning them to sound positive. However, the deeper you dig into the numbers, the less and less impressive they sound. The big numbers are as follows:

  • 105,000 people have paid for either the website and/or Kindle and iPad apps.
  • 50% of those people chose a “monthly” subscription, rather than a one off.
  • 100,000 print subscribers have activated the digital accounts that come with their paper subscription (i.e., no additional payment).
  • Trying to eliminate any “overlap” here, the company claims “close to 200,000” digital users.

Now, that’s better than single or double digit numbers, certainly, but there’s still plenty of reasons to be skeptical that these results represent any sort of success. First, the “close to 200,000” may be a stretch. Considering that they already admitted many paying users didn’t get monthly subscriptions, it’s a bit misleading to suggest that such folks are really “users” on par with subscribers. Second, I’m guessing there may be a bit more “overlap” than News Corp. seems to be assuming. For example, I wouldn’t be surprised if many paper subscribers who also are addicted to their iPad/Kindles decided to subscribe to both.

But, more to the point, while they want to charge £2 per week, there has been a £1 per month “trial” option, which many people say they’ve signed up for just to see — but there are indications that many have no interest in paying the full price.

On top of that, the real question is if News Corp. can actually make more money doing this, and there the numbers again break down. While the release itself repeatedly tries to play up how much “more valuable” these users are, the press release practically seems to be begging advertisers to come back, with transparent statements like “Many of the early adopters live in the UK, are relatively affluent and engage with the products frequently.” That’s a not-so-subtle coded attempt to entice back all the advertisers who have bailed.

Separately, the massive decrease in traffic to the websites is going to take a toll on ad revenue. Apparently, The Times Online went from 21 million unique visitors per month, down to 2 million for the Times and 700,000 for the Sunday Times. Of course, I’m again left wondering how that’s the case if there are only 200,000 digital users. So, something doesn’t quite add up there.

Even so… assuming that the traffic numbers are accurate, those are certainly in a range where I’m very familiar with what sorts of ad rates you can get for an online property whose users are “relatively affluent and engage with products frequently,” and while they can support a small operation, it’s a rounding error to an operation like News Corp. The traffic numbers just aren’t that impressive for an operation that big.

Finally, the announcement tries to play down the idea that either publication has been taken out of the conversation, with someone claiming “Our stories get picked up in the echo chamber of the media,” he said. “And readers comment on our stories.” Note the weasel words. Do your stories get picked up more or less? I’ll say that, pre-paywall, I quite frequently was sent to articles from The Times, and quite frequently linked to them. Since the paywall has gone up, there hasn’t been a single time that someone has referred me to a story in The Times. Not once. And the fact that some readers comment again is not an indication that you’re really a part of the conversation. How many sites are actually linking to stories? How much external traffic is being driven to the site? How many of those folks are converting. All of these things are numbers that actually mean something, and News Corp. seems silent on them… which is telling, as well.

Anyway, the announcement (of course) quotes James Murdoch saying how great these numbers are (what else is he going to say?). In a bit of interesting timing, next week, I’m actually going to be attending the Monaco Media Forum, where he’s one of the co-chairs and will be giving a talk. I’m not yet sure if his talk is on-the-record (some are apparently not), but I’ll see if I can pin him down on some of these numbers.

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Comments on “Murdoch's Paywall Numbers Sound Better Than They Really Are”

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Anonymous Coward says:

The Times Online went from 21 million unique visitors per month, down to 2 million for the Times and 700,000 for the Sunday Times. Of course, I’m again left wondering how that’s the case if there are only 200,000 digital users. So, something doesn’t quite add up there.

If you go to the Times Online and hit the paywall without paying, you’re still technically a unique visitor! I swear it counts! Come on…

Mike Masnick (profile) says:

Re: Re: Re: Re:

Not sure how he found the URL, but all these stories are publicly viewable (just not linked from anywhere)… Once through a glitch in the “Submitted Posts” listings I accidentally found myself freely perusing about a dozen unpublished posts.

Hmm. Yeah, not sure how that user found it. It’s possible that a Crystal Ball user shared it on Twitter or via email or something.

As Marcus notes, all of the URLs are public, just hidden. ๐Ÿ™‚ And we closed that glitch that Marcus found that one time.

Marcus Carab (profile) says:

Re: Re: Re:3 Re:

In this case it was that posts got added to your “Submitted Posts” profile page before they actually went live on the blog – so you could click through to them from there. And if they were further back of the cue, the Previous Post links were available to navigate through all the stuff in front of them.

Free Capitalist (profile) says:

Re: Re:

In no business model is that a good thing.

Pfft 4 million freeloaders, activists and Biebler goggling dependents. They don’t need their kind!!!!! When a customer comes by and pays directly for something already bought and paid for, well, that’s the kind of value customer they’re after. Oh wait a minute… looks like the original purchaser backed out… oh… hey… House of Lords… can you spare a nickel?

Hephaestus (profile) says:

It doesn’t really mater how many users they have. No where have I been able to find how much it cost to get those 50-100k users. If it is costing them as much as they are making in advertising then this is a total FAIL. It their abandonment rate is high then they will also fail.

Mike some suggested questions for you to ask next week …

1)) What is the length of time that someone keeps their subscription?
2) how much are they making off the average user?
3) What are they spending in advertising to get each user?
4) What is the abandonment rate after the initial trial subscription of 1 pound sterling?
5) how many paying users do you have now?
6) how many people total have signed up and have paid for a subscription? excluding the hardcopy freebies.

Expect fluff non committal answers ….

Tom says:

100,000 print subscribers have activated the digital accounts

My father is one of these. I think the offer was something like 50p for each copy of the Times. As a Times reader of course he took the offer. But he will never go online and look at the site. I am not sure if he has ever been on a computer. He’s in his ’80s. I doubt he even knows he has access. I would guess many subscribers are the same.

Anonymous Coward says:

Unintended consequences

There is a more subtle, but perhaps the most important of all, way in that this is could be an epic fail for them. And one way which is not easily visible in the numbers.

Say only 10% of the readers decide to pay to read the paywalled content. What happens to the other 90%? They go elsewhere, of course. Suddenly you have millions of extra readers for your competitors. Which can give them resources they can use to become more attractive to the readers, which can allow them to attract more readers from you, and so on. Not to mention that they will gain new readers more slowly than the competition, because of the initial barrier of having to pay to get in, which the competition does not have.

And what happens if every single news source goes behind a paywall? Simple, you see the rise of independent information sources like Indymedia. Which leads to a second subtle way in which this can be an epic fail for them: they lose not only readers, but influence. Where before they could put up a news item subtly implying “politician X is evil” and reach millions, now they can put up the same news item and reach only thousands. Their competitors without the paywall, on the other hand, gained influence together with the readers.

Whatis42? (profile) says:

A Quick Train of Thought

FREE VS. PAY –> (TL;DR – TOTAL = ₤3.75M vs ₤582.7K)


20M x 2.5 Ads/Page x 10 Pages/Month = 250M Ads Served @ ₤7.5 Avg CPM = ₤3.75M]

52,500 Non-Daily Subs (See Link – Rest Are Assumptions)
@ 60% Web ₤8.67, 30%Ipad ₤9.99, 10% Kindle ₤22.99 (really?)
= ₤273.1K + ₤157.3K + ₤120.7K = ₤551.1
+ Daily Access – 52.5K thru 4mths @ ₤1/Day; Call it = ₤20K
+ Ad Rev – 20 Pg/Month/Sub = 1.05M + 500K “Daily & Other” all @ Avg CPM ₤7.5 = ₤11.6K
TOTAL = ₤582.7K (Before D&A)]

Seamus McCauley, Virtualeconomics (profile) says:

from the just for the record department

Hi Mike
Grateful though I guess I am to “catullusrl” for linking back to my post (and amused though I am by your entertainingly robust pro-criticism policy that lets him diss you on your own website!), I just wanted to say that it isn’t anyone at Virtualeconomics calling you clueless. No doubt he’s a lovely chap but he isn’t me. Love your work dude.

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