I’ve criticized Rupert Murdoch for his hard-paywall strategy at The Times of London, arguing that a metered model a la the Financial Times or New York Times would be the much better option.

I still think The Times should move to a meter, but it’s worth noting that the hard paywall seems to be working for the paper, despite claims to the contrary.

The papers (including the Sunday Times) now have 153,000 digital subscribers paying between $3.33 and $10 a week, according to News UK CEO Mike Darcey. Most of those appear to be paying the higher price, actually, which includes tablet access.

That adds up, very roughly, to $60 million a year in paywall revenue. That reader revenue has helped News Corp. cut losses sharply at the Times, which lost $10 million last year—a lot of money, but a lot less than the $120 million it lost in 2009.

And digital subscribers are still growing at a healthy clip, up 38 percent from two years ago, when the papers had 111,000.

Darcey argues that these digital subscribers are every bit as good as print ones and he’s surely right. They skew younger, presumably, and they spent lots of time with The Times.

One problem with the “newspapers have more readers than ever” notion, is that most of those readers click on a link, leave after 20 seconds, and don’t come back. They’re worth virtually nothing unless you can ramp up the scale, which tends to happen by going for the lowest common denominator. Indeed, in saying about the Sidebar of Shame, “Don’t confuse Mail Online with a business based on professional journalism,” Darcey sounds like Audit Chief Dean Starkman, who’s argued that paywalls necessarily bring a quality imperative while the free model tends to push the other way.

Subscribers, on the other hand, are loyal readers who spend lots of time and attention with one paper. Total time spent with a newspaper’s website is far, far below the time spent with its print editions.

But core readers are different online. The Times says its digital subscribers spend 40 minutes with it online, just shy of the 44 minutes print readers spend (though Sunday digital usage is still well below Sunday paper dwell time). That’s a big deal for advertisers and means The Times can charge exponentially more for each digital reader than it could with a clicks model.

The unanswered question, though, is how much digital ad revenue The Times is foregoing with its hard paywall and how a meter model would fare instead.

The point of the meter is to get money from your hardcore readers, while still capitalizing on those who are less loyal. If you set your meter at 10 stories—or even five—a month, you’re able to collect subscription money while maintaining most of your ad money. A meter also allows you to market your paper to new readers, who are critical for long-term growth.

While it’s good to see The Times succeeding with its hard paywall, it could do even better by springing a leak.


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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.