News International’s online numbers
Raymond Snoddy on News International’s adventures in online with SunTalk and the Times paywall.
It was only a matter of months ago that SunTalk, the Sun’s internet radio station won a British press award for innovation.
There had been some controversy about the choice. After all, how innovative actually was it to use the internet to broadcast sound, for goodness sake. SunTalk was scarcely the first into that particular field.
Some also felt an element of squeamishness about the use the “innovation” was put to – enabling John Gaunt to rant even more.
The public purpose seemed flimsy compared with the journalistic activities of the runner-up, the use of social media by the Guardian to track down footage of police behaviour that led to a death at a City demonstration.
SunTalk got the nod on two grounds. It was innovative for a national newspaper to commit itself to a brand extension in another media which would also create a new stream of revenue for the future.
And it was innovative because it enabled SunTalk to escape the dreadful clutches of the regulator. Gaunt could say more or less what he wanted and if the three-hours-a day broadcast had all the sophistication of a pub conversation – no matter. For News International it rang all the bells.
The perils of the regulated radio sector were pointedly underlined yet again last week when Gaunt finally lost his legal battle with Oftcom over calling a local councillor a Nazi on TalkSport.
Surely SunTalk, which was also broadcast on FM to expats and holidaymaker in parts of Spain, was a compelling example of how in the new world you didn’t have to beg Ofcom for licences any more.
Then on Monday the axe fell. It came as a complete surprise, probably as much for John Gaunt as anyone else.
A spokesman said the decision to close SunTalk had been made “as part of an ongoing review of the business and a desire to concentrate on our core product.”
Few tears will be shed. Civilisation will cope.
But behind the simple announcement there are important layers of truth.
The internet allows you to do anything you want, but not everything you want to do can find an adequate audience or even more importantly decent revenues. Not even a brand as big as the Sun’s could be parlayed into a viable radio operation, and broadcasting just three hours a day on weekdays didn’t exactly maximize presence.
The numbers must have been very bad indeed for News International to pull the plug just over a year after the venture was launched.
The numbers are also starting to look bad for another much more significant NI venture – charging for The Times and Sunday Times online.
Maybe that’s no surprise. Few gave the venture much chance of success, with even NI editors talking down expectations by suggesting that more than 90% of online traffic would be lost. Secretly they must have been hoping for a minor miracle along the lines of Rooney scoring for England in a major competition.
But sometimes reality is terribly mundane.
The first unofficial estimates and leaks suggest that the NI editors were on the money – 90% loss or thereabouts it is.
The most precise figures have come from Dan Sabbagh, former media editor of The Times – and no-one has issued a denial.
His numbers are stark. Around 150,000 registered for The Times website during the free month’s trial but only 15,000 elected to pay the very reasonable sum of £2 a week when the paywall went up.
It’s early days and the Times is offering a month’s access for £1 to try to boost the numbers. Further promotions will doubtless follow but it is impossible to escape the conclusion that the numbers so far are poor given the bucket loads of publicity the initiative attracted.
It may be producing £120,000 a month, approximately half the paper’s losses, but surely you can pull in such a sum with internet advertising. As it stands, around one million online readers have been turned away, and that is an awful lot of visibility foregone voluntarily.
You don’t exactly need a crystal ball to come up with the reasons. Some simply don’t want to pay for what was until recently free. Others don’t mind paywalls but they’d rather put their hand in a blender than submit to Murdoch paywalls.
But the real reason is the competition which comes in the form of the BBC, Guardian, Daily Mail and the Daily Telegraph, all of whom remain free online and show no signs of changing their minds.
Murdoch can scarcely complain. He is a lusty advocate of competition, after all.
But he is also not a quitter and could yet find a way – but the odds do not look good.
So we have learned quite a lot this week about the future of the media.
There is no obvious financial model for a half-hearted online radio station, even when they carry such an illustrious name as The Sun.
And just occasionally, conventional wisdom is right – that it’s a hell of a task to charge for general online newspaper content when you have given it away for free for years and there are alternative sources of free information.
It may soon be as robust as a law of physics.
At least there was some good news this week for traditionally shaped media which the geeks may not have noticed.
ZenithOptimedia has doubled its forecast for UK advertising growth this year to 3%.
The upgrade is caused largely by a strong performance from national newspaper advertising in the first half- up nearly 10%.
There at least is a morsel of good news for Rupert Murdoch.