So the latest numbers are in for the Times paywall. Now eight months old it deserves, perhaps, to no longer be dubbed an experiment. Charging for people to look at the Times online is now business as usual in the Wapping fortress, and business as usual is doing...ok. Over at Paidcontent there's a copy of the full release and Robert Andrews takes a more detailed look at what the numbers mean.
At the end of the first four months behind a paywall they'd racked up 50,000 actual subscribers (people paying £2 a week) plus 105,000 other "digital purchase events" - people buying a one-day pass. Four more months on, at the end of Feb, they have a total of 79,000 monthly subscribers and a total 222,000 "sales of digital products" - people buying a one-day pass, plus sales of the Sunday Times iPad app. So, as Paidcontent notes, subscription sales have slowed down but sales overall have increased.
Back of an envelope time. Assuming a smooth growth curve between the two data points we have and extrapolating out, the Times online will have 100k monthly subscribers at the end of 12 months behind a paywall. Taken over the whole year at the £8.67pm rate, that's worth about £6.7m in subs revenues (nothing at the start of the paywall before anyone signed up, about £870k in month 12, various other figures in between). Add to that somewhere between 300k and 350k sales of digital products at - for the sake of simplicity - £1 per product at the day pass rate, and the Times online makes £7m in the 12 months from launching its paywall.
Where it gets more complicated is around ad revenues. One estimate by Dan Sabbah on Organgrinder puts the pre-paywall online ad revenues for the Times at £10m-£20m, and while there's no way of knowing from Dan's article where that figure came from it looks to be in the right ballpark for a newspaper site that was generating 41m pages from 6.4m users. So in the best case £10m has been given up to make back £7m. This would not normally be counted good news.
Now, I've noted before that the Times paywall is really just part of a larger bundling strategy for the overall News Corp parent company. Subscribers to BSkyB, especially now it looks likely to be taken over in its entirity with neglibile regulatory scrutiny, is the real prize here and I've calculated before that if just 30k (or 0.5%) of the 6m-odd people who used to read the Times online end up taking a BskyB subscription bundle to get it back the paywall makes financial sense. Anything beyond that is a win.
Taken as a stand-alone news publishing business, though, the Times is trying to persuade someone - for which read "advertisers" - that there's such a thing as a combined print and online audience. See the press release (I have removed the bold text):
"there was a 15-point swing in total paid-for sales (combined print circulation and digital) of The Times." Also,
"Our industry is being redefined by technology and we will no longer measure the sales and success of our newspapers in print circulation terms alone. The combination of print and digital is a potent force for our great journalism and our commercial success. Our rapidly growing customer base is incredibly attractive to advertisers due to their engagement levels and profile."
Well, sort of. The Times obviously wants people (for which again read "advertisers") to believe in a combined, single audience figure across print and online, implying that so long as a reader is paying to read the publication, they're equally valuable online and in print and should presumably cost the same to advertise to.
Is that implication true? Perhaps, but it's a large, new claim and deserves some scrutiny.
Once upon a time advertisers paid a premium to reach newspaper audiences because opportunities to do so were as scarce as printing presses and those audience were unusually valuable - rich, educated, opinion-formers. Those same audiences are now available for pennies per thousand online (just ask Facebook or any behavioural ad network for a campaign targeted at rich, educated opinion-formers) so the premium an advertiser might pay to reach them on a newspaper website must be due to something other than scarcity value. Perhaps it's the context. Perhaps it's nothing more than habit and tradition. The day Facebook and the ad networks start offering advertisers a campaign aimed at people who have visited the Times website that week we'll presumably see what the real premium for an ad appearing on the website itself is.
The Times is playing for a clever bit of positioning here with its advertisers, trying to establish equivalence between its traditionally expensive print audience and a digital audience that happens to have agreed to pay for the same content online; explicitly trying, in fact, to present them as a single, combined audience. Is there any reason to imagine advertisers will believe it? I can't see it. A half-page ad in a newspaper is not a banner on a website; people browsing via a keyboard are not in the same mindstate as people reading a paper over breakfast; without demographic and other research, there's nothing to substantiate the implication that this is one audience rather than two. Indeed it rather flies in the face of digital wisdom to simply bundle up 79,000 people (plus the guys visiting on the day pass) and call them "an audience". Still, you can see why they're doing it and you never know. Perhaps the advertisers will fall for it and start buying a digital audience they could have from Facebook for pennies at the Times' old print rate.