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Htfb

The different newspapers themselves are bundles of diverse goods which it is difficult to compare; my marginal willingness to pay for paper copies, or to switch my choice, is entirely determined by the quality of their provision of a cryptic crossword. So for everyone else I know, more or less.

Unfortunately for the model, this doesn't work twice. Online crosswords are no good, so you can't sell me Sky HD on the back of them.

Yours sincerely,

Representative Consumer,
London SE.

James MacAonghus

Good analysis; I remember you already made this point about the paywall being for Sky bundling.

On a slightly tangential note, my not paying for The Times is based on the poor quality of the product (a lot of pointless paper around Giles Coren's weekly column, as someone once described it). When people buy Sky packages, they often do it to get Sky Movies or Sky Sports because those are products with a USP and high quality. But is anyone going to buy Sky because of The Times? The way news is written these days, most newspapers are the same as each other. I would pay for the IHT, or Le Monde, or maybe The Independent, but The Times/Telegraph/Guardian are all the same. And I don't think they give me much that I can't get on TV news, or even London Lite. Yes they would say look at all our quality analysis, but it's not really. It's bintellectualism.

Meanwhile, if I may sound a little naive and antiquated, is there an argument similar to how some sports "should" be kept on free-to-air TV rather than be sold to Sky? Was there a time once when The Times was part of the structure of British society, in which case there was an obligation to keep it publicly accessible? In which case, the paywall confirms a loss of that status.

Ben

Highly insighful back of the envelope stuff Seamus. If your assumptions on News Corp's bundle strategy are correct then the perk of free access to the Times may potentially be enough to entice the required 0.2% of consumers into the valuable growth part of their business. However, while it might be financially sound, given that the Times would break even, I question whether it will translate to a significant increase in page views that compares to the exposure garnered pre-paywall. Adding 200,000 bundled subs, that then have access to the times, would still fall woefully short of making up the loss of 5.8m users who used to read the times and now can't.

So it would suit News Corp's bottom line, but ironically, they might end up giving away content for "free" to a much smaller audience. Your right, its not about the Times.

Seamus McCauley

HTFB - oddly I think your newspaper consumption habits really are pretty much representative of most of the people I know!

James - thanks (and well remembered about my attitude to the non-Giles bits of the Times!) but the issue isn't really what we, anecdotally, think. To believe that this will work we have to believe that some of the 5-odd million people who used to read the Times online and now can't valued it and miss it; that there is meaningful crossover between them and the BskyB subs audience; and that out of the million-odd conversations Sky's retention team would have had next year with people leaving, 3% will go Sky's way because of the offer of the Times. I can believe that.

Thanks Ben. It is a bit of a step back in terms of influence, it's true. Even if the numbers add up, going from "paper of record" to "upsell to the telephony bundle" is a pretty sharp step down.

Adam

I'm not sure how much of an influence this might be. The calculations make sense but I think an online newspaper subscription is of limited value to most people.

I discussed this with my parents snd some older people I work with, they would never read a full paper online. They like reading a paper version on the commute to work, or just while sitting around in the morning. They may read the a few online articles, but to read much more than that just isn't natural to them.

For me and most of my friends my age though we had no issues with reading a paper online, only none of us really value a specific paper as you can just move elsewhere to get exactly the same stuff.

Admittedly the numbers required in your analysis are quite low to make this pay off, but I am not sure the value of a Times account is enough to tip the balance considering how much Sky costs.

seamusmccauley

Adam

I know, a lot of people won't be moved by the offer of a free Times online sub. But consider what you have to believe for this to work. Sky loses 1m customers a year. It has to retain 30k of those for this initiative to make commercial sense. So you have to believe that one in about 30 of the conversations the retention team have with exiting customers will go a different way because there's an offer of Times online in the bundle. Alternatively, you could believe that one in about 150 of the 5m people who bounced off the new paywall will move from an existing bb provider to Sky to get access back. Alternatively you could believe that one in about 600 of the 18m UK bb customers will move tp Sky for the same reason.

Now, there's a lot of potential duplication and crossover there - some people who bounced off the Times paywall will already by Sky bb customers etc. But not that many - Sky only has 14% of that market. So even if most (all) or the people you've spoken to say that they wouldn't be swayed, perhaps some other people - especially when they're already in the confusing process of changing provider or in the middle of a sales pitch - will. And it really doesn't have to be many of them for it to work.

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