Telegraph metered paywall is all about getting the data
It has taken a long time coming but today (Thursday) Telegraph Media Group (TMG) finally confirmed that it’s to begin charging for access to Telegraph.co.uk.
Big surprise? Not really. This move has been two years in the making and follows much discussion, board room debate, and has no doubt accounted for the head of the odd executive (the last to go, digital chief Steve McLaughlin was a firm advocate of a paywall strategy but, I’ve been told, did not have the persuasive skills to convince his bosses. Telegraph chairman Aiden Barclay and chief executive Murodch MacLennan, meanwhile, are thought to be in the anti-paywall camp).
Today TMG basically outlined the first step of its payment strategy, namely a metered paywall strategy which will limit international readers to 20 free articles per months before they are charged.
Telegraph.co.uk is the third most visited UK national newspaper website, boasting more than 50 million visitors to its website a month with more than two thirds come from overseas. So to begin monetising these users if it can makes sense, although unlike some of its rivals TMG is not in a parlous financial position. TMG made a pre-tax profit of £54.5m in the year ending January 2012.
Compare that to GNM, publisher of The Guardian, which reported a financial loss of £63.4m in its last financial year. Times Newspapers- publisher of The Times- losses around £40m a year.
But let’s not beat around the bush .
Today’s move is no more than a litmus test ahead of an expected roll out across UK users and grabbing a large slice of the holy grail: customer data.
What TMG wants-in the long term-is transactional data on its UK readers so it can start flogging them as many products as possible. And any boost in revenues from the venture is just a welcome byproduct.
TMG may not be able to stem the bleeding of print readers, but it can certainly peddle goods and services to its largely affluent readership.
It already does this to some extent with its travel and wine reader offers, but this will be magnified and multiplied once it get hold of transactional details of its millions of web users.
But a word of caution for TMG: interestingly, TMG has been generous in only limiting users to 20 stories before the paywall sets in. The evidence would suggest this could be too high, and users will simply read 19 stories each month without paying.
This was why the New York Times was forced to cut its free stories from 20 to 10 in order to drive up its user numbers and revenues.
But TMG has followed The Times, The Independent and the Indy in charging for content. What bet the other will follow suit, sooner rather than later!