The Times and Sunday Times doesn’t just have a paywall hemming in their websites – but a wall of silence too, on traffic numbers.
The most optimistic estimate so far on traffic numbers came from web metrics company Comscore – which estimated that 1.6 million users visited the newly paywalled Sunday Times and Times websites in July.
But that figure may well include those who got no further than the home-pages and did not venture beyond the paywalls.
Now print media doom-mongers Enders Analysis have said that the News International paywalls will not be able to compensate print decline because online subscribers are only worth a quarter to a third that of print buyers.
In a research briefing Enders warns:
“Even if every single Times print buyer were instantly moved to the paid iPad app or to the paywall and the offline operations vanished in a puff of smoke along with all the problems of terminating print operations, The Times could not maintain its current scale of operations profitably.
‘The reason: the online subscribers generates just a quarter the revenues of the print buyer.”
Every Times Online/Sunday Times subscriber is worth £104 a year (£2 a week) and according to Enders they generate a further £30 a year in ad revenue.
This compares with the £241 a year Enders estimates that the average quality daily newspaper subscriber generates, and their £221 in ad revenue.
Enders argues that even once the physical cost of producing a newspaper is taken out of the equation – estimating that at 25 per cent of total costs – digital revenue still falls well short.
This is because digital subscriptions are, at present, around a quarter the price of print ones – and digital advertising yields are also only a quarter of print ones.
But could the current pricing of The Times paywall offering attract a greater number of online subscribers than print buyers and offset the smaller return? Not likely says Enders.
‘It seems unlikely that there are enough marginal buyers that could be tempted by lower digital prices for the total number of people paying for news to increase significantly.
‘The free online products that the newspapers have created unlocked massive demand for free content, but this is a different kind of audience consuming content in very different ways from that offered in paid news bundles. ‘
Enders notes that national newspapers have so far been able to counter the effects of declining circulation through a combination of higher prices and printing more pages – so increasing the amount of advertising inventory.
It estimates that revenue per copy has doubled in real terms between 1979 and 2009.
The average number of pages across all newspaper titles more than doubled between 1985 and 2005, Enders research has found.
In a bleak forecast (for journalists) Enders predicts that newspaper publishers:
“(W)ill have to think about a radical reduction of the scale of their businesses, an area in which local and regional newspapers have gathered far more experience than national newspapers in recent years”.