Times launches paywall - but Independent to go free?

As the Times prepares to jettison 95% of its traffic, the Indie gets a new owner in Alexander Lebedev.

by
Last Updated: 31 Aug 2010

What’s the right revenue model for the newspaper industry in the digital age? There’s no doubting the position of News International boss Rupert Murdoch: he’s been growling for months about putting his online content behind a paywall, and (just after his visit to the UK), the Times and Sunday Times have announced they’ll start charging for access as of June. Meanwhile at the other end of the spectrum, Evening Standard owner Alexander Lebedev has just bought the Independent for £1 – and there’s talk that he might start giving the paper away for free, to boost circulation. As the Chinese might say, Fleet Street is living in interesting times…

News International boss Rebekah Brooks said today that after a brief trial period in May, the Times and the Sunday Times will start charging £1 per day or £2 per week for access to their online content as of June – and implied that her other titles (i.e. the Sun and the News of the World) might soon follow suit. ‘This is just the start,’ said Brooks. What she also probably expects is a big drop in traffic. Currently Times Online gets about 1.2m users per day, but typical conversion rates suggest that only about 5% of these are likely to cough up for a sub (which apparently would probably generate less than £2m of revenue - not much more than the loss the Times made last year).

There’s been no official word yet on Lebedev’s plans for the Indie. But the strategy needs to be radical. The newspaper has never made a profit in its history, and its circulation has continued to fall in recent years as it stripped back editorial staff to cut costs. Hence why Lebedev is actually being paid to take the paper off INM’s hands: he’s handing over a token £1 (the price of the paper), but they’ll pay him £9.25m over the next year ‘to cover all future trading liabilities and obligations’. Now he has to decide how to revitalise the paper’s flagging fortunes (minus Rod Liddle). Some are speculating that he may even give the Indie away for free, which has provided a major boost to the Standard’s circulation (and thus boosted ad revenues - though not necessarily enough).

Murdoch argues that newspapers can’t just keep giving away content for free online, but it will be tough to charge when his competitors aren’t (presumably he hopes this will encourage them to follow suit). He’ll also tell advertisers that a bigger audience is not necessarily better online; that it’s preferable to have a smaller, higher-quality, more engaged readership. But that'll be a tough argument to make to media buyers, who just aren't used to buying like this (and can you really have a niche audience for a general-interest newspaper?)

We guess only time will tell whether he - or Lebedev - can make the sums add up...


In today's bulletin:

BA boss takes hard line on perks as academics stick their oar in
Canadian pensioners' numbers come up on National Lottery
Times launches paywall - but Independent to go free?
Better managers the key to reducing NHS absence
MT meets the Veuve Clicquot Business Woman of the Year

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today