The Times finds 2m new registered readers but says 'no more than 10' global news brands can support a paying audience

Covering the most powerful media companies to the smartest startups, former Independent media editor Ian Burrell examines the fraught problem of how news is funded today. Follow Ian @iburrell.

Chris Duncan, managing director of Times Newspapers

In a sobering assessment of the future of the news industry, the head of the Times and Sunday Times predicts a future where “no more than 10” global English-language news brands will survive by paid subscription models.

But speaking to The Drum, Chris Duncan, managing director of Times Newspapers Ltd, reveals that the two Times news brands have registered 2 million new users through a “two free articles a week” scheme that it launched in July last year.

He also discloses that the Times has enjoyed a “big” lift in online engagement in the past month after Google relaxed its policy on surfacing paywalled content in its search results. This change follows sustained pressure on Google from Rupert Murdoch’s News Corp publishing empire.

The Times’ acquisition of a large database of new readers is almost wholly in addition to the 458,000 digital and print subscribers to the two newspapers and gives Times Newspapers a level of audience scale that it has not enjoyed since James Murdoch surprised the media world by putting its content behind a paywall in 2010.

The 2 million registered users (half of which are based outside of the UK) offer the two titles a “pipeline” of readers, through which the publisher will hope to bring a fresh cohort of subscribers, including a “new generation” of younger readers, Duncan says.

But he warns that such a business model is only viable for a tiny number of international news brands, and that he is “worried” for outlets that must depend on advertising but cannot achieve the “massive scale” in audience now required to fund a newsroom by that means.

Survival strategies

Two survival routes exist for international news publishers, Duncan says.

“There will be a few people – maybe no more than 10 – who will be able to charge a large amount of customers for a direct subscription. Then there will be a number of [free] sites that will be at a global scale and generating an audience and running on that model. The people that I worry about are in that mid-range where they are big but not at the scale they need to get to, or can charge but for only a very limited amount of people.”

This column recently reported how the Guardian was finding traction with a policy of encouraging members to give it money in order that it can continue to provide free access journalism. By this means it has acquired a membership base of 800,000, while maintaining a monthly reach of 160 million.

That seems a quite different approach to news publishing but Duncan believes this membership model is part of the same pattern of quality outlets monetising audiences directly, rather than through advertising. “Most premium publishers are probably getting to various themes on the same symphony,” he says. “The Telegraph calls it ‘open premium’, the Guardian will say we have different levels of relationship. But I think we are all trying to solve the same problem, which is how do you build a revenue base of customers at the same time as finding the next set of customers who are used to free content?”

Since the Times put up its paywall it has defied predictions that said it would wilt for lack of online profile. Within six years it turned an annual loss of £70m into an £11m profit, although it slipped back into the red last year with a £5m loss. That largely resulted from redundancy restructuring costs and high sales and marketing expenses. Despite the loss, the Times titles performed well in a difficult market, maintaining annual revenues of £342m and making an adjusted operating profit (after exceptional costs) of £11.2m.

Duncan describes as a “fundamental mistake” the initial decision to make the Times free online (the website launched in 1996). “We taught everybody that news was free and then we realised that model was not going to be sustainable.” The introduction of the paywall was based on a vindicated assumption that “intermediary platforms would take a bigger share of advertising revenue and we had to have a direct relationship with customers”, he says.

Improving relations with Google

Life has become easier for the Times and Sunday Times this month after changes to Google’s ‘First Click Free’ policy, which provided Duncan’s biggest challenge in attracting fresh registrations.

“All we ever asked for was a level playing field for subscription content versus free content,” he says. “First Click Free was always a number of clicks free – up to five clicks – and it effectively turned subscription sites into free-to-air sites. It was asking you to change your business model for Google customers and we always thought that was unfair and was leveraging the dominance of the search engine.”

Now, for the first time in seven years, whole Times articles are being indexed by search engine crawlers. “It’s having a big impact on our referral numbers,” says Duncan.

He praises Google for “a substantive move” and presumes that it is a response to “trends in the industry” whereby major publishers from the New York Times to the Wall Street Journal are having success with subscription-based models.

The Times paywall was always going to capture a proportion of established readers but commentators have long wondered whether young people would see the brand as relevant – let alone worth paying for – if it was absent from their online field of vision.

According to Duncan, the two titles are attracting registrations from 18-24-year-olds “in bigger numbers than we have been for quite a while”. He disputes the idea that young people will not pay for quality content. “Their media is a world where you either get the basic package or you pay extra to get additional value,” he says. “They have been brought up very clearly on that.”

A general news service is quite different from an entertainment service such as Spotify or Netflix. But Duncan says there is much in the Times’ content to interest a younger demographic, from technology coverage of the impact on society of Silicon Valley companies and driverless cars to specialist reporting of the legal sector and other professions. “If you're interested in your career at that age then we are a very good source of information.”

Duncan had hoped that the “two free articles” scheme might generate 1 million registrations. The 2 million names will be used in “identifying our next set of customers”, with conversions to subscriptions driven by temporary access to the wider Times package. “That will largely be a discounted trial that will probably run for 2-3 months, during which time [readers enjoy] a transition from the web and mobile web world to actually using our tablet and smartphone apps.”

'Don't read everything you believe'

Coverage of yesterday’s budget offered Duncan’s team a marketing opportunity to showcase the scope of Times journalism to those used to reading only two pieces a week.

Other approaches to attracting new subscribers take the form of newsletters, notably Red Box, which is compiled by Matt Chorley and mixes Westminster gossip with samples of Times political coverage and the coming day’s agenda in parliament. The Times and Sunday Times Facebook page has 714,000 likes and is used to promote the brand’s Times+ premium membership programme. It is a “marketing channel rather than a publishing channel’, says Duncan.

The Times positions itself as an unbiased news brand. It has been running an advertising campaign using the slogan “Don’t Read Everything You Believe” and showcasing the paper’s diversity of commentary. Duncan says that the paper is positioning itself as an antidote to the echo chamber of social media. “There has been a slight loss of trust in social networks and…a bifurcation of the debate where you are almost in a bubble on the left or right,” he says. “You can go to other [news] titles and find your opinion reinforced but what the Times has always done well is to say ‘here are two different sides to the debate’.”

He hopes that a sense of trust and authority will help the Times build subscriptions internationally from readers who are looking for a UK-based or global perspective, in addition to their local news brand. “We have got registered users in every country in the world, including North Korea. That gives you an idea that – without planting flags and opening offices in various countries – the distribution we have is global.”

While the Times will not try to compete in coverage of “Aussie Rules football or baseball”, it can find readers in Canada or India or continental Europe who are interested in the view from London as the UK heads towards Brexit.

Clearly Duncan thinks the Times will be one of those 10 enduring subscription-supported global news brands. Who will be the others in that elite band, and how many will be British? “You would hope a few of us,” he says diplomatically. “But if you look at the States, there’s the New York Times, the Washington Post and the [Wall Street] Journal, and then you step down quite quickly…”

Ian Burrell's column, The News Business, is published on The Drum each Thursday. Follow Ian on Twitter @iburrell

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