The Strategic Issue of Newspaper Paywalls Essay

The Strategic Issue of Newspaper Paywalls - Essay Example The Guardian’s lead media blogger Cory Doctorow led the critical analysis in asking three main questions about the dataset as presented by Murdoch’s company. (Doctorow, 2010) â€Å"What sort of purchases are the paid subscribers making?† â€Å"How much do advertisers value the additional information the Times can supply about paying users?† â€Å"What does it cost to get a subscriber?† These questions are important in determining what the paywall and subscriber numbers mean to News Corp’s bottom line profit figures. This experiment with the online subscriber model for news is important to the sector due to the declining revenues and bankruptcy of many traditional newspapers. If News Corp is successful in attracting consumers to its online subscription models, iPad only newspaper, and financial industry news, then it represents a business possibility or even necessity for other newspapers in the sector like the Guardian to follow. Looking at t he actual numbers released by News Corp in their Nov. 2nd, 2010 press release: â€Å"News International today announces that the new digital products for The Times and The Sunday Times have achieved more than 105,000 paid-for customer sales to date. Around half of these are monthly subscribers. These include subscribers to the digital sites as well as subscribers to The Times iPad app and Kindle edition. Many of the rest are either single copy or pay-as-you-go customers. In addition to the digital-only subscribers, there are 100,000 joint digital/print subscribers who have activated their digital accounts to the websites and/or iPad app since launch. As a result, the total paid audience for digital products on The Times and The Sunday Times is close to 200,000 (allowing for some duplication in the digital customer sales number).† (Paid Content, 2010) Felix Salmon adds another aspect of the paywall that may not be immediately evident from this news release, reporting that â₠¬Å"traffic has fallen off a cliff, from 21 million to 2.7 million pageviews per month† for these same sites. (Reuters, 2010) From these statistics, the 200,000 paid subscribers are only viewing on average 10 pages or news articles per month. This does not indicate a strong pattern of readership, but more of the average daily or single-setting news content of a site browser. In analyzing the effect of this, for example, as it relates to the Guardian business plan, it should be noted that by page volume this is approximately a 90% reduction in the number of advertisements served by the website per month. Thus, looking at the issue of paywalls and online newspapers from a strictly profit and loss perspective, the GMG can calculate whether a 90% reduction in advertising revenue would be offset by the savings on server infrastructure with reduced site traffic and the revenues generated by the subscription fees. To put this in context with what the News Corp numbers mean, Dan Sabbag ah of the Guardian reviewed the three different subscription plans represented in the statistics and came up with an estimate: â€Å"the total is ?5.5m a year, gross.† (Sabbagah, 2010) This includes the 1-day subscriptions, the monthly subscriptions, and iPad newspaper subscriptions. In this manner, it could be related that loss of 90% of site traffic and viewership for the newspapers was not worth the minimal