'The Sun' UK newspaper has scrapped its paywall. Instead it's offering all of their website content for free following the appointment recently of Rebekah Brooks.
It's the biggest selling UK tabloid and has had a paywall since mid-2013 with over 30 million monthly unique visitors.
So clearly the view here is that subs aren't as lucrative as Digital Advertising opportunities.
By maximising viewers in taking down the paywall, they'll maximise digital advertising as Mail online have done. It's estimated that already it has brought in another 800,000+ viewers a day.
Lessons here....
There's a lot of talk in Newspaper circles about paywalls.
Leaky paywalls, full paywalls and basically any paywall way of generating revenue from the news and content they provide.
It is ridiculous when you think about it, that we all expect our news to be free, when it is probably the most expensive content to produce. But we do, because it's always been like that.
And the whole problem is bolstered by a decline in Newspaper printed cover prices as people opt to get their free news online. It's not that they're consuming less news, they're just choosing to get it for free.
So not only is online not generating revenue, but it reduces revenue from print cover prices, as people switch to the "free" version. An Age old discussion, I know. But what happens in effect, is that Newspapers develop excellent online sites to actually damage themselves. There's no choice....or is there?
A problem too, is that if one title in a local market, introduces a paywall and their competitors don't, then they will lose their readers to the competitor's free version. No doubt. So either everyone introduces a paywall same day, or nobody can.
However, when you have a "free" online newspaper or magazine, there is some benefit in generating money from the substantial traffic that follows, through advertising.
Typically banner advertising, page take-overs and pre-rolls on video. At the minute, that advertising does not come close to compensating for the provision of the service. Nor is it ever likely to
If on the other hand, you introduce a paywall, and provide content only to those who pay for it, then that general traffic dramatically decreases, literally overnight, as people switch to other free sites. Hence any chance you had of generating those Ad dollars, disappears.
The San Fran Chronicle recently dropped their paywall for this very reason.
It's a huge quandary but .....there may be answers.
One is and an interesting one, to see US magazine 'Sports Illustrated' try something different. They're testing a paywall that allows users access to all of its content for free, IF readers watch a 30 second video Ad first.
Watch the Ad, you get the content "free" for 24 hours. Then you need to watch another video ad for another 24 hours free.
Not unlike the way TV stations force you to watch video ads before their online programmes - sometimes 7 videos!
The view on Sports Illustrated to date, is that 70% of readers will watch the video Ad to get to the content. Forbes have been doing something similar for ages too.
Because too, those Sports Illustrated (or indeed Forbes.com) readers, are so well targeted (the demographic is clear), Sports Illustrated sell the video ads at a premium.
So they still have the traffic (because the content is ultimately free inside) for advertisers, albeit with a drop-off in readers (-30%). And they now have a new Advertising stream in forcing readers to watch the video ad.
Good experiment, well worth a look and if it works, it could be one answer to the prayers of online newspapers.
However, there is another, which I've been saying for a long time and spoken to Newspaper CEO's about. And which probably needs another Blog in its own right but it's a thought......
If you have 40 or 50 million views (impressions) a month, it doesn't really matter why they are there really, what matters is, that they are.
In essence, you have a consumer market to sell into. Ready made Shopping Mall.
And so the answer might be to turn the Newspaper into a shop.
When you read a story about a Sports match - let customers buy tickets, buy merchandise etc there and then via a clickthru. When you read a piece about a book, a play, a movie etc let readers buy tickets. When you read Fashion, Beauty, even some breaking news, let readers buy. That's the new revenue stream and therefore, you'd actually want encourage free readers with more free content. The more readers you have, the more shoppers to sell to.
Coupled with the Advertising revenue that's already there, it could be the trick.
And even better still, when you have an Ad in the online edition, don't charge advertisers for traditional space, charge them for results. Change the Ad model.
Don't sell a Car manufacturer an "Ad", sell them test drives (which was probably the purpose of the Ad in the first place!).
Don't sell a pharmacy a page take over rate, sell them customers and take a percentage.
After all, that's what Advertisers want - Results.
And that's what readers want - free content.
And that's what online Newspapers have - millions of consumers with the potential to generate real money from them.
With 50 million consumers a month, some Irish Newspapers could be the biggest Shopping Sites in Europe.
Interesting numbers on UK Newspapers from this month's Economist (always well worth a read by the way).
Since 2008, the UK nationals circulation (Britain has 12 nationals) has been in decline and much more when compared to the US, Japan and Europe. They're down by 25%.
UK newspapers traditionally have depended on the casual reader buying off the cover (so a new Royal baby is a great fillip for them) rather than a daily buying habit or subscriptions. Tabloid headlines consequently, are key here to attract that casual reader in the newsagent.
But it is far easier for a reader not to buy a newspaper in the shop there and then, rather than cancel a subscription which is the prominent way newspapers are sold in the US for example.
The Telegraph (superb publication), FT, Guardian, Independent and Times all are all pushing subscriptions and with some success. From December 2008 to May 2013, subscriptions have gone from 26% to 41% of overall circulation.
The Telegraph for example, are giving away a free Kindle with every subscription and others are bundling digital access with the sub. Clearly too, subs are better revenue long term and give numbers on readers profiles which can be used for targeted Ads.
9% of British readers are paying for online news (paywalls) up from 4% in 2012. Some newspapers are adding content to their digital edition such as The Sun with clips of Premier League soccer games. Creating more worthwhile content that's worth paying for rather than just, an online version of the newspaper.
All of this though, is not compensating for the loss in Advertising revenue. Newspaper Ad revenue estimated by The Economist, will be 2 billion stg, about half of its 2005 level. The Times loses money, despite its successful paywall.
Like Ireland however, Britain has too many newspapers for the number of readers - it is an over saturated market. And free-sheets, such as The Evening Standard, prosper.
So with the circulation declines and albeit the efforts to grow subs, the decline in Ads and the march of online, will mean that things will tighten up through the potential closure of some of those 12 titles. Nevermind competitive threats from other and new media. Although as someone said, newspapers are like soccer clubs....some billionaire will buy them.
Indeed. Like Ireland.
