Will Murdoch’s paywall pay off?

May 13, 2010 by Dirk Singer

Next week The Times and Sunday Times join the FT in becoming UK newspapers behind a paywall where it will cost you ?2 a week or ?1 a day to access the articles.

The Independent asks whether it will pay off and what proportion of online users will vanish. News International’s management freely admits that a large chunk of visitors will disappear, but according to Tristan Davies of the Sunday Times, “the business end of the company decided it was better to have a quality relationship with an audience than one based on quantity.”

With the other UK nationals (the FT aside) and the BBC continuing to provide online news for free and with online news arguably being a commodity, the Independent points out that the challenge will be to make subscribers think they are getting something they won’t get elsewhere.

Though advertising revenues don’t as yet cover online news budgets, the Telegraph for one has adopted a different model for making money online.

According to a Paid Content article last year, 20-30% of online revenues come from a core of 2-3% of users who buy into extras such as the Telegraph’s fantasy cricket and football games and the Clued Up puzzle service, which charges ?2.99 a month for basic subscription