News Corp's Times of London initially lost 40% of its traffic by going behind a paywall.

When News Corp's Times of London put all of its content behind a paywall, it lost more than 40 percent of traffic in the first several months. Along with that drop in traffic came a big loss of advertising revenue.

But now, according to News Corp.’s digital chief Jonathan Miller, the “total economics have improved...There’s a transition there that’s tough, which unfortunately means not every company can do it,” Miller is quoted as saying, “We’ll make it, but in all honesty because we can afford to.”

About half of the 105,000 online subscribers come from their monthly subscription base. The newspaper counts "online" versions as its website, iPad application and Kindle edition.

The pay-model seems to work well against a devoted monthly subscriber base, but locks out casual readers, topic hunters, and readers who can otherwise be influential to a newspaper's brand reputation. By going behind a paywall, the Times of London went from a global news organization to a local online paper--somewhat defeating the opportunities afforded it by the world wide web.

I predict that if a total paywall trend continues, it will open the door for branded news aggregators, with consumers willing to pay a bulk (but discounted) price for their favorite publications, rather than one-off subscriptions to multiple sites. It may also support the rise of online-only publications such as Huffington Post, Salon, and Daily Beast.

Source: Bloomberg

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