When it comes to paywalls around news websites, I sometimes wonder if we are becoming an international fraternity of cargo cultists. The voodoo economics which accompanies the release of digital sales figures for The Times and Sunday Times is developing into its own art. What could this 105,000 digital sales, ‘around half’ of which are subscribers actually MEAN?Well, you can read some pretty interesting analysis here, or here, or here or here (FT paywall warning), or indeed in hundreds of other places. And then just to make your cerebral cortex hum, add into it the 30,000 daily sales lost at The Times between June and September this year. We know from all of this accumulated analysis one thing for sure; that the numbers we are talking about in terms of paid digital subscriptions are tiny. The analysis also carries very little or no substantive information about the opportunity cost of investment in the paywall, the additional costs of marketing and supporting the live product, the actual margin that this investment represents. These 105,000 incidents of some digital payment activity are subdivided into anything from a pound paid for Caitlin Moran’s interview with Keith Richards (I know that is one transaction they have banked, for sure), to a Times fetishist who has iPad, Kindle, paper and web subscriptions .
But take two steps back, and just think about what we are discussing here. These are tiny numbers, and we are discussing them in relation to The Times, or The London Times as it is known on this side of the Atlantic. The Thunderer, the standard bearer for the British press, its best known export and most resonant brand. So what we must know on a macro level is that the influence game for The Times is up.
Even running a loss of £80 million a year, Times Newspapers is worth it for a business the size and scale of News International in the UK, if it is an effective tool of influence. That loss is less than 10 per cent of the profits of BSkyB, and in the past it has represented an investment in lobbying, public relations and marketing for Rupert Murdoch’s group. The moment the numbers mattered enough for News International to erect a paywall around its digital reach was, in many ways, the moment The Times officially lost its key purpose for the company. In previous battles with regulators, the amassed influence of the Wapping editors and their titles has proved crucial. Margaret Thatcher cleared the decks for the merger between Sky and BSB as both companies faced bankruptcy twenty years ago, largely because of the relationship Rupert Murdoch had built with her government and the perceived influence of its papers in delivering the electorate.
The Times is arguably no longer that key driver of influence. It is supplanted by the Financial Times and maybe even the Wall Street Journal (Murdoch’s new favourite influencer) within the UK. Internationally it has no voice, or none to speak of, post the paywall. Its pale editorial performance in under-reporting the recent phone hacking scandal involving former News International employees, has meant that it cannot even be used as an example of how independently minded Murdoch’s print titles are, and this too might prove a crucial failing.
News Corporation is setting out on its most important play of the decade as it seeks to take BSkyB under its own full control . The British government and the EU will have to approve the bid, which raises considerable concerns about the market share and influence News International will have in the domestic market. It could be that the accumulated courtship of power results in a wave through. But if News is deemed to have too great a share of the UK market for the bid to be allowed to go ahead, then what? Well, News Corp can either give up on the idea, or it can shed its less important assets.
The Times and Sunday Times would now have to fall into this category. What more significant gesture could the company make in its pursuit of the BSkyB deal? The Times is a financial headache for the company, and conceivably has outlived its editorial purpose as a lever of influence. Having made such a fuss about the power News has in the market, those who lobby against its reach could hardly protest that shedding The Times was not a significant move. In the long-term strategy of the world’s most intriguing media conglomerate, this newsprint product looks increasingly dispensable, and 100,000 digital customers make very little difference to this underlying truth. And of course, the ultimate irony, is that should The Times reach the auction block, there would be plenty of buyers.