Archive

Posts Tagged ‘SkyTV’

The Times, they are a-charging – Rupert plans a paywall

May 14, 2010 4 comments

The still controversial theory of evolution doesn’t just apply to living things. In any environment, failure to adapt to new circumstances can lead to extinction in an unsettlingly quick manner. A teenaged Zeitgeist’s former weekend employer Woolworths provides a recent example of how quickly a large organisation can crumble to nothing if they don’t change with the times.

Just as the printing press began a process of democratising knowledge and ultimately power, new digital platforms have upset the established forms of distributing media.

Zeitgeist has previously commented on how the film and music industries have attempted to adapt to new consumption habits, the threat of piracy and distribution.

Another industry that has become old fashioned very quickly is print media. Not so long ago, if you wanted to read a book, magazine or newspaper you had to buy one – and the public had no problem with that model.

The growth of the internet and other digital media has not only moved the goalposts, but also drawn new lines on the pitch and introduced video technology.

Why buy a copy of the news as it was at 3am when you can get up to date news for free? Why buy a month-old magazine when there are many blogs and sites offering free opinion?

The old kingdoms are being forced to do battle in a new arena. Their problem in a nutshell is that as consumers move from print to online, revenues drop and barely cover operational costs – if at all. For many, the huge presses and infrastructures that previously provided an effective barrier to entry now hang around their necks like an albatross-shaped noose.

Newspapers simply need to generate more income from their online offering, as The New Yorker wrote in 2008.

One tactic that has been attempted by certain publications is the introduction of a paywall. In short this means users have to pay in order to be able to access content online. If your content is unique and special, people will pay – Zeitgeist parts with hard cash to access resources such as Mintel and Datamonitor and individuals pay to access Which? and Parkers.

The latest titles to erect a paywall are Rupert Murdoch‘s The Times and Sunday Times, which will charge £1 per day or £2 per week for access from June 1st, with The Sun and News of the World to follow soon.

Catch ’em while you can!

The theory behind paywalls is partly ideological – people should pay to access content – why should it be given away for nothing? Compared to the £1 price for the print edition, £2 for a weeks access looks like a good deal to the subscriber. Unfortunately economic models built on ideal rather than actual behaviour rarely thrive. Disappointingly for Murdoch, consumers, even those who favour The Times, will compare the £2 subscription fee with the free online access provided by the BBC, CNN, The Guardian, The Independent, The Mail, The Mirror et al or alternative news sources such as Twitter, Facebook and Google.

Times assistant editor Tom Whitwell accepts that “drive-by traffic will fall significantly”, adding that “The focus is preparing to serve a small, paying audience.”

Quite how small remains to be seen. The recent experiment by Johnston Press to build a paywall around their regional based content is rumoured to have attracted fewer than ten subscribers. The wall was quickly dismantled and no comments have been forthcoming on the failure of the project.

Recent research in the UK by KPMG doesn’t bode well either – only 10% of the people they spoke to said that they were likely to become paid subscibers to ANY media products in the next year.

Worse still, a PCI/Harris Interactive poll conducted in 2009 found that only 5% of people would pay to read their favourite newspaper online.

Even former PM Gordon Brown spoke out against paywalls stating vaguely, “People have got used to getting content without having to pay. I don’t think you are going to be able to put things behind paywalls in the way that people think.”

Nor is this a British idiosyncrasy, with a US study revealing that only 7% of Americans would continue to visit their favourite news site if they put up a paywall.

None of this has deterred Murdoch, who has enjoyed great success with his SkyTV network in the UK, which introduced Britons to the idea of paying to watch a previously free (licence fee notwithstanding) service. Arguably, the main difference is that Sky has unique content and subscribers are paying for all the channels, not for each channel individually. Replicating the model with online news is going to be very difficult to do.

So, will the future of news content provision echo the scenes of 65 million years ago as smaller agile providers succeed while the old, previously dominant organisations struggle to survive? And will paywalls delay or accelerate the decline? Let’s wait and see, there’s bound to be a free site somewhere that will report the result.