John Gapper in the FT (registration required) seems to doubt whether Murdoch's heart will be in the paywall that he's putting up next month around The Times and The Sunday Times:
'Radically reducing the readership, becoming more specialist and charging more for news than his rivals is not his style. Yet that is the logic of charging for online access to The Times and Sunday Times; having marched them downmarket, he must march them up again.
...Mr Murdoch’s News Corp estimates that the marginal revenue from an occasional browser is less than one tenth of a penny a year. Even Group M, the media buying agency of WPP, the advertising group, argues in a research note that the bulk of news surfers are “useless tourists” who not only pay nothing but have little advertising potential.
“Free distribution of premium content is like eating your babies. You will give value away until you go bust,” writes Group M. It suggests avoiding a “permanent oversupply of digital inventory” on the open web by using a paywall to “lift the publisher out of remnant inventory and restore a much smaller but aggregated audience.”
The Times and The Sunday Times are right to try it – there is little alternative – but success depends on consumers finding sufficient value behind the wall. The irony is that Mr Murdoch has broadened the intended audience of his titles so heavily over the past three decades that it is not obvious they will.
Business outlets such as the FT and the Journal have a big advantage in charging online because they are business-focused. If general publications are to match them, they must provide, as Stevie Spring, chief executive of Future Publishing, the magazine group, puts it, something “closer to must-have than nice-to-have”.
...He (Murdoch) does, however, know where the money is and there is precious little of it in commoditised online news, given the number of free providers. His heart may not be in it but his head must have figured it out.'
