Hitwise Intelligence, an online marketing analyst firm, recently reported that since News International enacted a paywall structure on the The Times of London's Web site, it has lost significant readership.
Reuters
A man reads The Times newspaper, featuring a front page article on accused Russian spy Anna Chapman and her British ex-husband Alex, at St James park in London July 2, 2010. Chapman, one of 10 arrested, was denied bail on Monday in New York after U.S. authorities said they broke up a spy ring that carried out deep-cover work in the United States to recruit political sources and gather information for the Russian government. REUTERS/Luke MacGregor (BRITAIN - Tags: CRIME LAW MILITARY POLITICS)
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A partial paywall was set up May 15, and a full paywall, which only allows readers to see a portion of a story before paying, was in place by July 2. Before the paywall was implemented, The Times received an average of 4.29 percent of all visits to news and media sites in the United Kingdom, according to Hitwise analyst Robin Goad. By the week ending July 10, it was down to 1.43 percent of all visits. This signified a 66 percent decline in viewership.
When the paper implemented the partial paywall, readership dropped 58 percent, according to Hitwise. Once the full paywall was put in place, The Times' online readership stabilized.
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A report from competing newspaper, The Guardian, suggested the site lost 90 percent of its readership, which is more in line with the expectations of many analysts.
On the surface, this may seem like a big strike against paywalls. But, Goad says in a blog post, it is not as bad as it looks. He says The Times has been able to retain a portion of readers who want to stay on the site for more than one story, eliminating casual viewers in favor of "stickier" customers. This still makes it financially viable as it attracts a loyal readership base.
Fitch Ratings media analyst Mike Simonton differs. While some newspapers have a targeted, loyal audience that would be willing to pay for content, he says general interest publications like The Times are not as well suited for paywalls.
"The New York Times and the Wall Street Journal are among very few online content providers that have a unique enough content niche and loyal enough audience base to successfully charge for online content," Simonton said.
"We believe that local and tabloid newspaper companies that offer more commoditized content for free and then try to reverse course may have some near-term success at increasing their circulation revenue. But over time we believe they will likely reduce their audience base, negatively impacting the reach they can provide advertisers,"
