tip off

The great News Ltd paywall experiment: are readers logging off?

News Limited’s Herald Sun website has shed almost 20% of its year-on-year traffic since it went behind a paywall in March — a drop, no doubt about it, but by no means a calamity, according to top media buyers.

The Herald Sun averaged 343,103 daily unique browsers from April to June this year — an 18% decline from the same period in 2011. Traffic to the website of Melbourne rival The Age was steady over the same period, while tabloid sibling The Daily Telegraph picked up visitors, according to a Crikey analysis of Nielsen data. Visitor numbers to The Australian, which introduced a paywall last October, declined by 27%.

If they hold around these figures you would have to judge this an early success,” Steve Allen, managing director of  buying agency Fusion Strategy, said of the Herald Sun result. “I was thinking the drops might have been greater so these look like pretty good initial scores.”

Allen says a 20% decline in visitors following the introduction of a paywall will have a negligible impact on advertising revenue.

If putting something behind a paywall means that less attractive demographics drop off then that’s not a bad thing,” he said. “The free riders aren’t people we want to engage with; if the core audience isn’t dropping off then it doesn’t really matter.”

David Gaines, CEO of media agency Maxus, agreed: “I can’t see anything that suggests it’s been a disaster.”

Media buying sources tell Crikey that News Ltd will be pleased with the result as the company expected a drop off closer to 25%.

The crucial question, of course, is: how many Herald Sun readers have actually agreed to hand over their credit card details in exchange for a “digital pass”?  News Ltd has yet to release any figures on how many people have signed up and has not, according to media buying insiders, been spruiking any subscriber success in ad-land.

They’re being very cagey about who their subscribers are and how many have signed up,” one media buyer, who asked to remain anonymous, told Crikey. “They are being very quiet about performance so I expect we would all draw the same conclusion from that,” said another.

Curiously, readers who signed up for a two-month free trial can still access all the site’s content for free, even though though their trial period expired over a month ago. Herald Sun editor-in-chief Phil Gardner kept schtum this morning when asked for comment by Crikey.

The business model for the Herald Sun paywall is based on readers’ willingness to pay $2.95 a week for premium content — especially AFL (including elements of the popular SuperCoach game), crime and opinion from commentators such as conservative firebrand Andrew Bolt. Other, more generic, content remains available for free.

The tabloid’s paywall experiment is being watched closed around the world because it is one of the first mass-market papers to ask readers to pay for content.

Popular dailies usually get the vapours when you talk about paywalls because they think it’s all about mass audience,” Steve Allen said. “This is the acid test.”

Unlike News Ltd’s “freemium” model — which mixes free and paid content — Fairfax has announced plans to introduce a New York Times-style metered paywall on The Age and The Sydney Morning Herald websites. Readers will be allowed to read a specific number of articles before being asked to pay.

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  • 1
    geomac62
    Posted Tuesday, 17 July 2012 at 1:45 pm | Permalink

    The traffic graph has all lines going south with no level out . Isn,t it a bit premature to assess success or deny failure ? Also how long is it since the two month or whatever it was free trial ceased ? Its not mentioned but would be of relevance .

  • 2
    geomac62
    Posted Tuesday, 17 July 2012 at 1:46 pm | Permalink

    In the graph I mean ie relevance .

  • 3
    Dale Roberts
    Posted Tuesday, 17 July 2012 at 2:10 pm | Permalink

    A unique user won’t necessarily mean a successful visitor. I’ve been directed to Herald Sun and The Australian countless times but go no further when I hit that paywall. So I suspect the true drop off would actually be somewhat higher.

  • 4
    AJH
    Posted Tuesday, 17 July 2012 at 2:14 pm | Permalink

    If the SMH introduce a paywall just like the NYT, I will be happy.

    It is trivial to circumvent.

    That said, the News Ltd paywall is quite easy to circumvent anyway.

  • 5
    John Newton
    Posted Tuesday, 17 July 2012 at 2:37 pm | Permalink

    Agree with AJH - neither is the NYT. Shee, if I can work it out, anyone can

  • 6
    michael r james
    Posted Tuesday, 17 July 2012 at 2:38 pm | Permalink

    On a slightly different but related issue. This morning there is an article by Greg Combet in the Oz and it is paywalled!
    What is a Federal Minister doing writing something that he presumably considers of national interest, and presumably not receiving payment, but allowing it to be behind a for-profit paywall by no less than a foreign-owned media monopolist?
    .
    In a way it reinforces one’s deathwish for this particular media giant.

    But regardless of that, Greg Comet should be ashamed to so overtly support the Murdoch empire in this way.

  • 7
    Bill Hilliger
    Posted Tuesday, 17 July 2012 at 2:43 pm | Permalink

    Happy downward trend, keep trending down, advertisers pay far too much to advertise, as ads can now be clicked off, so that means less value and a “meh” impact on potential customers.

  • 8
    T.Williams
    Posted Tuesday, 17 July 2012 at 2:52 pm | Permalink

    How long is it since The Australian introduced its little gold ticket scheme? Yet you can still sidestep this by cutting and pasting the article headline into Google News and read the whole thing. These people don’t deserve to be paid; possibly why they are going broke.

  • 9
    wolfcat
    Posted Tuesday, 17 July 2012 at 3:10 pm | Permalink

    The trend also is a 20% drop during a free trial.

    Expect this number only to rise once the actual paywall is in place. Of course, that doesn’t take into account all those that just side step the paywall regardless.

  • 10
    Bill Hilliger
    Posted Tuesday, 17 July 2012 at 3:17 pm | Permalink

    The Murdochracy media will no doubt go to the government in waiting seeking finacial assistance to keep their smelly product on the streets.

  • 11
    Suzanne Blake
    Posted Tuesday, 17 July 2012 at 3:41 pm | Permalink

    There are ways around the paywall, for the smart people, like me!!

  • 12
    Steve777
    Posted Tuesday, 17 July 2012 at 4:19 pm | Permalink

    The graphs seem to show seasonality, with lower hits during school holidays. Apart from that, the Telegraph may have increased slightly, the Age may have dropped slightly but the Herald Sun and Australian are definitely going down. It’ll be interesting to see how it pans out. If there is a drop during a free trial, I would expect lots of people to drop off once they have to pay. There are plenty of free sources of right-wing bombast, after all. Anyway, the Herald Sun and Telegraph readers will need the money to pay the carbon tax that these illustrious organs of the press have been winding them up and (dis)informing them about.

  • 13
    CliffG
    Posted Tuesday, 17 July 2012 at 4:24 pm | Permalink

    Not surprised people don’t want to pay to read the crap in News Ltd newspapers. I wouldn’t soil my kitty litter with it!
    And have you noticed the jump in the piles of papers in coffee houses? A feeble attempt to boost failing circulation perhaps.

  • 14
    TimEx
    Posted Tuesday, 17 July 2012 at 4:47 pm | Permalink

    We saw similar when we ran the figures a few weeks back from memory -

    http://www.experian.com.au/blogs/marketing-forward/2012/06/29/paywalls-drive-readers-away/

  • 15
    fractious
    Posted Tuesday, 17 July 2012 at 4:49 pm | Permalink

    So many ifs and buts in this it’s a wonder Crikey even published it. 8 months’ data is too small a dataset, plus all the other caveats outlined by other commenters above make it worth even less.

    One wonders why anyone at Crikey thought this was worth running.

  • 16
    Gocomsys
    Posted Tuesday, 17 July 2012 at 4:55 pm | Permalink

    CLIFFG Posted Tuesday, 17 July 2012 at 4:24 pm

    And have you noticed the jump in the piles of papers in coffee houses?

    Whenever I see Limited News publications lying around I put them in the garbage bin. After all it is important to dispose of rubbish thoughtfully.

  • 17
    Gocomsys
    Posted Tuesday, 17 July 2012 at 4:59 pm | Permalink

    Oops moderation, forgot to tweak my comment.

    CLIFFG Posted Tuesday, 17 July 2012 at 4:24 pm

    And have you noticed the jump in the pi les of papers in coffee houses?

    Whenever I see Limited News publications ly ing around I put them in the garbage bin. After all it is important to dis pose of rubbish thoughtfully.

  • 18
    Lord Barry Bonkton
    Posted Tuesday, 17 July 2012 at 4:59 pm | Permalink

    SB , smart people DON’T read the shite .

  • 19
    Lord Barry Bonkton
    Posted Tuesday, 17 July 2012 at 5:01 pm | Permalink

    Looks like a Big trend Downhill for the Australian.

  • 20
    Edward James
    Posted Tuesday, 17 July 2012 at 5:10 pm | Permalink

    @ GEOMAC62 This in the tenth paragraph above, answers your question. “their trial period expired over a month ago. Herald Sun editor-in-chief Phil Gardner kept schtum this morning when asked for comment by Crikey.” Edward James

  • 21
    Mike Smith
    Posted Tuesday, 17 July 2012 at 5:24 pm | Permalink

    Steve Allen says

    “The free riders aren’t people we want to engage with;

    Oh really? Going to stop advertising on FREE to Air tv, because the free riders aren’t people you want to engage with? Bull$hit.

  • 22
    Phaser Norton
    Posted Tuesday, 17 July 2012 at 5:42 pm | Permalink

    When we start measuring by dollars instead of dodgy traffic and sub numbers we will see what’s real. Fact is many products in oz media lost reader engagement before the web impacted. The Age for example started including C and D demographics ten in their alleged core audience ten years ago. The reason being that A and B had walked away.

  • 23
    Oscar Jones
    Posted Tuesday, 17 July 2012 at 6:24 pm | Permalink

    This caught my eye as well : ““The free riders aren’t people we want to engage with”

    An ad-man speaks!

    I have no problem paying for content

  • 24
    Owen Gary
    Posted Tuesday, 17 July 2012 at 6:39 pm | Permalink

    What, people pay to read the SMH & Australian online?? Naa I’ll wait for “Bolts” online domain before I consider parting with money!!

    If you peddle crap, no one will read, if no one is reading no one will advertise with you!!

    I see sites like Crikey increasing their online support expenentionally in coming years, I for one will happily support them.

  • 25
    AR
    Posted Tuesday, 17 July 2012 at 9:05 pm | Permalink

    Allen’s comment reminds me of Mudorc collaring one of the directors of MACYS, a high end store in NY, decades ago and complaining that it didn’t advertise in his rags.
    He was told “Your readers would be our shoplifters”.
    I’m curious to know what happened near the start of April to cause, after heading downwards, a large spike in the AGE and smaller, but distinct, ones in the Terror & OZ but nothing in the HUN.
    All four resume downwards in mid May - any suggestions, no footy or summat?
    And in world shattering news - EJ has NOT put his phone number! Well done, keep to that.

  • 26
    Edward James
    Posted Tuesday, 17 July 2012 at 11:29 pm | Permalink

    @ AR. I think it is piss weak the way so many people attack our elected representatives in print while remaining anonymous! Edward James

  • 27
    Seasprite
    Posted Wednesday, 18 July 2012 at 1:33 am | Permalink

    The business model for the Herald Sun paywall is based on readers’ willingness to pay $2.95 a week for premium content — especially AFL (including elements of the popular SuperCoach game)

    Without its AFL content those figures would be a lot worse, that’s why I think for The Age to go behind a pay-wall without offering something to it’s readers that can’t be read for free on other websites will be a bad decision, Fairfax needs to lift its game on reporting or move into the sports arena.

    The quality of reporting is average at The Age, lets take an article today,
    A CONSERVATIVE activist group created by Liberal firebrand Cory Bernardi
    They could have added to the article with some analysis or opinion, explain to the reader that Cory Bernardi went to the US and brought back Tea Party Republican astroturfing which is new to Australian politics and most readers would never heard or know what Astroturfing is.

  • 28
    Mike Smith
    Posted Wednesday, 18 July 2012 at 9:01 am | Permalink

    and covert (disinformation) means

    I’m fairly sure the Teaparty don’t regard their position as disinformation.

  • 29
    Holden Back
    Posted Wednesday, 18 July 2012 at 11:54 am | Permalink

    Can you imagine the headlines if the ABC or Fairfax reported the same decline in on-line readership? Or blithely reported that they weren’t interested in the freeriders? (So that’s what they really think of the Bloot’s commenters!)

    They write themselves.

  • 30
    Frank Campbell
    Posted Wednesday, 18 July 2012 at 4:04 pm | Permalink

    Let’s see Crikey’s figures

  • 31
    Cuppa
    Posted Wednesday, 18 July 2012 at 5:04 pm | Permalink

    Wouldn’t be surprised if the ABC is picking up many of the readers the Herald-Sun loses.

    Let’s face it, the ‘new’ ABC is not going to seem like very exotic territory to HS refugees.

  • 32
    jbwood
    Posted Thursday, 19 July 2012 at 12:40 am | Permalink

    Although I am a fan of Rupert’s I must say that the HS’s digital effort is pretty pp. I am not a fan of the Labor party’s cheer sqad at The Age but their digital presentation, via their app, IMO is excellent.

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