Will Paywalls Work?

A few months ago, New York Times editor Bill Keller confirmed that starting next January, the Times website will be blocked by a paywall. In essence, you will not be able to read any of their articles online (which is how you’re probably reading it now, assuming you’re reading it at all).

Keller wasn’t necessarily optimistic about the idea, he just viewed it as an inevitable money-saving strategy. He and other newspaper editors are hoping against hope that their loyal readers will stick with them even if they have to pay.

That’s why everyone was looking with great anticipation at what would happen to The London Times after they launched their paywall this month. In order to access the articles on the site, you have to pay 1-2 pounds.

So what happened? Well, they failed. Miserably, in fact. Their website traffic is now somewhere between one-third and one-tenth of what it used to be. Contrast that with the increased traffic to the Guardian and Trinity Mirror websites.

This should be a wake-up call to the New York Times. When you force people to pay for reading online, they are much less likely to visit your site. It’s going to redirect more traffic to the competitors.

Paywalls are industry-focused and not consumer-focused. If I want to read an in-depth article from the New York Times, I can just find it posted on other blogs. News bloggers update this stuff for the rest of us, and the nice thing about the internet is that it’s not that hard to find reproduced information.

The question is: are there limitations to the firewall? New York Magazine says yes. And as for the money issue, the Times appears to not be so worried. Many bloggers and media insiders are expecting the paywall to be “revenue neutral,” meaning that they expect to make as much money with subscribers as they expect to lose from decreased online advertising, so there should be very little net loss.

Again, that’s assuming people will actually pay. Let’s return to the London Times, or rather, the Sunday Times. We’re going to compare it to the New York Times, so we can get a forecast of what the future will hold for the latter publication.

The New York Times is the 27th-most circulated newspaper in the world, while The Sunday Times is the 40th-most circulated, according to Newspapers24.com. In May, The New York Times had 32 million visitors and 719 million unique page views; in February, The Sunday Times (PDF) had 20.4 million visitors and 139.4 million unique page views.

So the New York Times has a slim chance of survival, but there is going to be a low ebb before any sort of recovery.