The Sun's online paywall is a calculated risk by the hierarchy at News UK

By Rob Lynam, campaignlive.co.uk, Thursday, 22 August 2013 08:00AM

To paywall or not to paywall: that is the question. There are still too few examples of publishers having made a success of paywalls, but it is far too early to write them off. Newspapers have to develop the mindset of an e-tailer - continually improving, iterating and refining their model, and also becoming more customer-focused.

The Sun's online paywall is a calculated risk by the hierarchy at News UK

This month saw the launch of The Sun’s digital paywall, along with News UK’s three-year, £20 million-plus investment in Premier League football rights online, on mobile and on tablet. It is the boldest move so far by any newspaper publisher to create distinctive content to convince consumers to pay for access.

So what does Sun+ tell us? For one thing, it tells us that Mike Darcey’s News UK has no intention of reversing from the path it started down three years earlier, when it shook the market with its paywall around The Times.

The latest figures show that The Times has 140,000 digital subscribers. But we have to note that this has not been verified by any third party and there are many known unknowns: how many of the digital subscribers are monthly or annual, pay the full price, or drop off after the introductory offer period? We’d all like to know more but, then, if it were my business, with so many competitors looking to find their own way, I’d probably keep my cards close to my chest too. One thing’s for sure: from a commercial point of view, digital ad revenue becomes less important than subscription revenue.

When The Times moved behind a paywall, losing 90 per cent of its readership overnight, total ad inventory available to sell and the number of advertisers on the site also dropped dramatically.

From a commercial point of view, digital ad revenue becomes less important than subscription revenue

Pre-paywall, The Times carried up to 80 brands per month. Today, it carries around a quarter of that, but those that do use it appreciate the premium, less-cluttered environment.

But it should be noted that the amount of digital revenue The Times generated pre-paywall was never really that much in the grand scheme of things. While national newspapers have for a long time taken the lion’s share of print spend, their share of digital display is probably in single figures – and a fraction of that spent on print, TV or outdoor, for that matter.

News UK assure us they are making far more money now through subscriptions than they ever did through ads, and I’m inclined to believe them. I can’t believe they would have taken this gamble with The Sun if The Times really had been an unmitigated disaster.

Rob Lynam is the head of display activation at MEC

This article was first published on campaignlive.co.uk

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