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Tuesday, 20 July 2010

Will The Times experiment force more football journalism behind a paywall?

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Reading Tom Dunmore's thoughtful piece on The Times paywall experiment does question where football articles will come from in the future. I don't mean the cut and paste transfer speculation and inane nonsense that pollutes NewsNow and the like - I mean the articles from established writers who provoke debate rather than regurgitate and re-re-re-report news.

I don't much care for paywalls or think that they will succeed unless there is a niche market to be exploited or there is a monopoly (or in this case an oligopoly) position. And even well written football articles and opinions do not seem to be very exploitable. Yet Dunmore reports that 27,500 people have subscribed to the low introductory prices that The Times hopes will hook its readers whether on iPad or online. But there are a couple of implications for the numbers that Dunmore quoted.

Firstly if there are 27,500 users who have demonstrated a willingness to consider paying something each month then I would guess that a proportion of those users will stick with it at after the introductory period. The real barrier to entry is always getting people to pay anything, once customers agree with the principle of paying then, like on the iPhone or Android phones, there is a market.

If only 10,000 people initially agree to pay £2 per week that will mean that The Times will generate £1m per year. £1m won't eliminate losses, but will make the owners of papers like The Telegraph and The Independent sit up and consider the situation, £1m of revenue and a captive audience is a very persuasive argument.

Secondly the media moguls are putting incredible pressure on the new government to hack away at the BBC. If they get their wish then the BBC will be stripped of the resources that mean it is the first port of call for most British people who want to check the news. In this scenario then newspaper website news will become the default news providers.

News International is gambling that the BBC can be curbed and its competitors can be tempted by paywall revenues. In 2010 it seems ludicrous that chunks of the commercial internet would suddenly cut themselves off from search engines and casual browsers and for many it will be a point of principle to avoid the paywalls.

But it is not out of the question that paywalls can pay for journalism in a way that internet advertising will not. And so even if the decision seems ludicrous for a generation that have grown up with the internet, in business terms it is a calculated risk that could succeed.

According to an article in the Guardian today, The Times and Sunday Times combined lose £240,000 per day and the online revenue is currently estimated to be running at £4,000 per day. Online readership fell by the expected 90% after the introduction of the paywall.

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Antony Melvin



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