The Times paywall – what really happened?

The Times & Sunday Times made a splash when they put their big paywall up on the site last month, requiring users to pay a daily or weekly fee to view the content. There’s been lots of speculation ever since, with many (including myself) deriding the decision. I wasn’t surprised when I learned that they were forecast to lose 90% of their traffic. But the latest figures from Comscore are now out and we can see the full extent of the damage done by The Times by requiring their users to pay. The findings are certainly surprising.

27% loss in traffic

Certainly not the 90% that we were all led to believe, but according to The Independent, this is the drop in traffic the site has experienced, with unique visits in July at 1.61 million compared to 2.2 million in June. And from May to July, there’s been a 50% drop in traffic. What’s also interesting, and certainly unexpected, is that the average time spent by the user on the site has dropped since it was introduced, from 5.8 minutes to only 4 minutes. I certainly would have thought that if you’re paying for something then you would be spending more time using it, but I believe this is a reflection of the redesign on the site than the payment structure. It’s certainly encouraging news for other publishers that it’s not quite the scare story that was circulated online. Losing a third of your traffic is certainly a hard pill to swallow, but the subscription revenue will go some way towards helping with that.

And while The Times was an isolated case certainly in the UK, others are now starting to take the plunge. The New York Times Company is now testing out a paywall on of their newspapers within the group – Telegram.com

This is an interesting experiment, as it’s being tested on a local news product. In this case you could see why someone might be inclined to pay for their news : you’re less likely to be able to find it elsewhere so you’d be willing to pay for the more niche content. You can also argue that you would be more loyal to your local newspaper due to the targeted content it’s providing you with. This is certainly the case with the Worcester Telegram, where it is the only daily paper in the area.

The NY Times are clearly using this as a test-case to decide whether to implement the paywall among it’s main products, or all of them. And all the while of course, these are providing interesting case studies to other newspapers.

The fallout for advertisers

As well as the paywalls being an avenue for the publishers to increase revenue, the fallout for advertisers must also be considered. Whether they’ll be happy with a significant drop in traffic is uncertain, and you can be sure that many will start to depart from the Time online, if they haven’t done already. News International are not currently commenting on the recent announcement of their drop in traffic, so at the moment we can only speculate. But as Murdoch himself says, what we are witnessing is the start of a new business model for the internet, and I wouldn’t argue with him just yet. As much as advertisers may flee from the Times due to the traffic loss, advertisers overall are allocating more media budget to mobile advertising and new technologies, and this is where the Times could stand well, as they’ve optimised their newspaper for iPads and other tablet computers.

There are lots of conclusions that can be reached from the Times experiment, but it’s certainly too early to say anything with certainty. New trends or behaviours will always be slow to adopt and while I would have said that the days of the Times’ paywall were numbered with a 90% loss in traffic, I’m not sure if this is the case with the smaller drop that is now being reported. I would also argue that we spend less time on individual sites overall, and the loss in time on the site for the Times may be symptomatic of a wider user trend, amplified by the iPad-friendly version.

The paywall system is a long-term process and I think that given the latest figures from the Times, we’ll see others start to experiment with this, as publishers try out different revenue streams to support their business.

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