News & Opinion

Mike Darcey supports paywalls

The CEO of News UK says that paywalls are working and that sacrificing reach is worth gaining "meaningful revenue".

Drawing on the example of The Times and The Sunday Times, which went behind digital paywalls in 2010, Darcey explained that they were "among the first in the world to successfully establish a subscriber based model on a wholly paid-for proposition". Looking to the future he went on to add "and The Sun is soon to follow", in reference to the paywall which will be installed on The Sun's content from the 1 August.

One of the main arguments against the paywall model is that reach is sacrificed, to which Darcey, speaking at The Times CEO Summit at the Institute of Directors, countered: "This reach doesn’t generate any meaningful revenue, and the pursuit of it undermines the piece of the business that does make money. If your purpose contemplates still being here in five to 10 years time, then the choice seems clear: it is better to sacrifice reach and preserve sustainable profitability."

Paying heed to the notion of paywalls as a "revolutionary concept" and drawing attention to the longevity of The Times, Darcey pointed out that "charging for news is not a new idea" and that "The Times has been behind the paywall since 1785... and there have been free news alternatives all that time also".

As an example of a paid for model that has gained widespread popularity, Darcey referenced paid-for TV services such as Sky: "Before joining News UK I worked for Sky for 15 years and in the early days some scoffed at the idea that someone could charge for television when there was a free alternative readily available on terrestrial channels. But Sky and others have shown that if you build a strong relationship with your customers, provide distinctive quality content they can’t get for free elsewhere, if you surround it with a great customer experience as regards technology and service, then it is perfectly possible to build a large and loyal subscriber base. I believe that is also true for strong news brands."

In further reference to The Times, Darcey said: "The key insight comes from looking at total paid sales: the sum of casual print, plus print subscribers, plus digital subscribers…and on this basis the Times is ahead of 2010, and there are very few titles that can boast that record in recent years."

Offering greater insight he detailed that The Times "already has 140,000 paying subscribers, mainly on the tablet, and it’s growing... just as important, these tablet subscribers spend on average 40 minutes with the tablet edition, very similar to the amount of time spent reading the paper copy".

Sources: The Drum and The Guardian  

02/07/13

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