Rupert Murdoch is unlikely to be crying himself to sleep at night. Indeed, I’m guessing he gets his rest quite easily at the moment. While the rest of the world debates the impact of the “Times Paywall”, Mr Murdoch is happily banking the cash generated. The story so far…
At the beginning of the year The Times and The Sunday Times announced they would be charging for access to their websites as from this July. Up went hands in horror as people said no-one would pay for online news. Commentators predicted that The Times websites would lose two-thirds of their readers – some even said up to 90% of people would not be prepared to pay. Now, as they say in the best TV reality shows, the votes are in. And guess what, the commentators were almost right. According to Hitwise, The Times has lost two-thirds of its online readership in the space of a month and its market share has plummeted as a result – not quite the 90% that was predicted, but a substantial loss nonetheless.
The “free brigade” are using the data to demonstrate they were right; millions of people have deserted The Times. But according to an analysis in The Guardian enough people are paying to bring in Mr Murdoch £1.2m a year. Hang on a mo…this lack of success, this dramatic fall in visitors, this proof the pundits were right is generating cash..? Yep. It is evidence that people will pay for web content.
OK, I know, £1.2m a year is like a rounding error on Mr Murdoch’s accounts but it is income and because the website costs are lower than the print media costs the profitability is a lot higher. It’s also £1.2m of costs for the website that Mr Murdoch doesn’t have to fund. Oh, and the “fuss” about online payment has driven more people to buy the printed newspaper anyway, so there’s extra income there too. Perhaps, then, Mr Murdoch is not as daft as many commentators would have us believe.
Here’s the true test of someone in business. Are they interested in “attention” or profits? Mr Murdoch is a pure businessman – the profit motive is clear in his behaviour and activities. He is not running The Times website because he wants to be at the top of some league table of visitor numbers. He only wants to do it if it makes money. The Times – for the moment with its special offer subscription of £1 – does appear to be profitable. When that subscription level rises from £1 for 30 days to £8 for 28 days we may well see yet more drop off.
At that point the naysayers will be able to bleat that the market share of The Times has fallen again and that the “paywall” does not work. But many of those commentators will not be counting the pounds and pence that Mr Murdoch will be doing.
Often, people focus on the wrong measure. Visitor numbers and website market share is interesting – but it doesn’t pay the bills. What’s more important to your business is cash, income, spondoolicks. Count the money, not the visitors. Business owners often worry about the numbers of website visitors they get and how they compare with their competition in terms of Google ranking. That’s all very interesting, but does it pay the wage bill at the end of the month?
Much more important to your website success is the money it brings in. I still think ultimately in the world of online news that Mr Murdoch has got this one wrong. But he does provide a useful reminder that unless you have sales you are not in business. If your website generates traffic, but doesn’t produce income, you are not running an online business. Take a tip from Mr Murdoch and focus on the right numbers.