The economics of the Times’ new paywall

The Times and Sunday Times launched their redesigned websites in May and began charging on 1^st July  after offering registered users a free trial for one month. The costs are £1 for a daily or £2 for a weekly access.

So far there has been no official statement on the website’s performance from News International, but according to figures released by intelligence service Hitwise, traffic to the Times has halved following the closure of timesonline.co.uk. The Times’ market share that had previously reached highs of around 5 per cent has slipped to around 1.8 per cent. Time spent on-site has also fallen, down to three minutes from a pre-paywall five.

Just yesterday, journalist and Murdoch biographer Michael Wolff claimed that the Times now finds itself in an empty world. Wolff’s sources told him that not only is nobody subscribing to the website, but subscribers to the print version, who would have free access anyway, are not going beyond the registration page.

It’s well worth noting, however, that this comes no surprise to the Times. One typical survey published last month by paidContent:UK and Harris Interactive found that 76 per cent of Times Online readers won’t pay at all – although 23 per cent  rated themselves as likely to pay, and within that, four per cent as extremely likely. Research of this kind has informed the expectations at News International: John Witherow, editor of the Sunday Times, said he was braced for a loss of more than 90 per cent of its readers.

Last year, Peter Kirwan from Press Gazette estimated the potential annual revenue base at Times Online to a £7m-£8m. Ten per cent of the current readership paying £2 a week equates to around £16m. Even factoring in estimates of what would likely be sold as hyper-targeted advertising, neither figure looks particularly impressive alongside Times Newspapers Ltd’ 2008 annual revenues of £444.8m – and neither reflects the possible impact of the remaining 90 per cent of Times readers defecting to other sources.

As an earlier Cision post on this subject said, it’s unwise to bet against Murdoch. But right now it’s difficult to see how News International can make these numbers add up in its favour.