The News Corp.-owned Times of London made headlines in media circles this week with its announcement of the results from moving its content behind a paywall. Along with that came much speculation about whether the decision has been a financial winner for News Corp., or whether other media outlets such as The New York Times should be reconsidering their plans for erecting paywalls.
By one analysis, News Corp. might actually be trumping some of the skepticism about charging for online news. Erick Schonfeld of TechCrunch did some calculations and determined that News Corp. may have lost relatively little in online advertising and handily made it up in subscription charges. “Depending on the actual CPM, financially they are doing at least two to four times better than they were before,” Schonfeld writes. “And that is with only about 1.5 percent of their former readers becoming paying subscribers. You don’t need that many subscribers to make up for lost advertising revenues online.”
Yet Schonfeld notes a potential pitfall: The Times could easily max out the number of loyal readers willing to pay for its content, while the long-term potential for advertising sales is far greater. Regardless, Rupert Murdoch’s gamble may be one to watch.
Meanwhile, another U.K. news outfit is experimenting with charging for content, but on mobile platforms. paidContent reports that the The Guardian will soon unveil a new mobile app that will cost £2.99 for a six-months subscription and £3.99 for a year. But the app will remain free and ad-supported in the U.S., where the app has not been as popular.
“This will be a test of whether brand loyalty translates in to repeat purchases — and, indeed, of whether apps are one-off impulse purchases or can become a sustainable long-term proposition,” paidContent says. Whatever the case, it does seem that barriers to paying for content are far lower in the mobile app marketplace as it’s developed so far than elsewhere in the online realm.
What are you willing to pay for when it comes to online news?