John Trimmer – ARS technical June 25, 2010
During the economic crisis, the online advertising market took a corresponding dive, a trend that has left sites considering ways to get users to pay directly for content. Traditional print outlets are at the forefront of this trend, led by major sites like
The New York Times and various properties in Rupert Murdoch's News Corp. empire.
In the UK,
The Times is rolling out its paywall and now demands that anyone intent on reading its content register an account. According to research done by the traffic metrics firm Hitwise, simply demanding registration has already cut into traffic at
The Times.
Right now,
The Times isn't charging for content, although it plans on doing so in the near future. As of mid-June, however, the site started requiring that anyone who wished to view an actual article register an account. Ultimately, these accounts will be used to try to extract payment for viewing an article's content.
But, according to
Hitwise's numbers, simply adding the registration barrier has cut traffic to the site almost in half. Prior to the change,
The Times was seeing somewhere in the neighborhood of four to five percent of the traffic going to the print news media category; after, it was hovering around two percent.
Hitwise also tracked where users were going once they hit the registration page. About a third stay on one of
The Times' properties, but many head straight to another news site (
The Telegraph and
The Guardian are big winners here), or simply to Google.
Still, it's not like the paper's competitors are seeing a huge boost in traffic as a result of the registration.
The Independent saw the biggest boost in its traffic, but the new readers only accounted for 0.6 percent of its total traffic.
All told, the analysis concludes that The Times' new system is costing them readers, but it hasn't been "catastrophic" for the site's traffic, and no single entity has stepped in to pick up the slack. One thing that's not possible to determine yet is whether this represents a temporary dip. Over time, more readers may find a news story that compels them to set up an account; provided the credentials are stored conveniently, that should provide them with continual access from that point on.
At least until the content requires payment, which will probably have an even more radical effect on traffic.
One big caution to this story is that it relies entirely on data from a single company's traffic monitoring system. Hitwise provides software to ISPs that aggregates anonymized Web-surfing data that flows across their networks. In addition to providing that information to the ISPs, the company performs its own analyses of data aggregated from multiple ISPs. The caveat to these findings is that it's not clear how extensive their coverage of the UK's population is, and how much their figures reflect the average UK Web user. Still, given that the before and after figures are generated by the same method, the trend Hitwise detects is likely to be real.
The large impact of this simple change highlights a real challenge for the sites considering charging for content. With so many options for news on the Web, and search engines that will happily present those options to a reader, even the convenience of accessing free news can have a major impact on online readership. Actually requiring payment, and the additional steps involved in arranging that, will undoubtedly have a greater impact.
For a site with dedicated readers convinced of its quality, the payments will probably offset the plunge in ad revenues from casual readers. But those sites are likely to be few and far between.
http://arstechnica.com/media/news/2010/06/incipient-paywall-costing-newspaper-online-readers.ars
Last updated 01/07/2010
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