Tabloid latest to go behind paywall

James Murdoch's plan to charge for online access to British tabloid News of the World shows he's extending his paywall model even as advertisers flee websites of two of his other newspapers where internet readers have to pay.

News of the World, which this month featured a video of boxer Ricky Hatton purportedly snorting cocaine and published an interview with a prostitute who said she had sex with Manchester United footballer Wayne Rooney while his wife was pregnant, will seek payment from web readers from next month.

The move follows Murdoch-controlled News Corp's July push to get London papers the Times and the Sunday Times into the online-pay arena.

With more people getting their news from the internet, newspapers are increasingly charging for online access to make up for lost revenue from print advertising. Murdoch's strategy to put all stories of his British newspapers behind an online paywall differs from the approach of newspapers such as the Financial Times which first gives access to some stories online before it starts charging.

So far, the Times and the Sunday Times have seen readers leave to access free news elsewhere, with advertisers following suit.

"I can go to the Guardian or CNN and get an audience," said Chris Bailes, digital trading manager at Starcom MediaVest Group, a media buyer owned by Publicis Groupe. "No one is indispensable."

Starcom MediaVest, which has placed ads for the Emirates airline and Continental Airlines, has cut its advertising on the Times and Sunday Times by more than 50 per cent, Bailes said.

News Corp's international unit hasn't communicated with media buyers about its online figures, he said.

"We wouldn't put our money where we don't know the numbers, just as you wouldn't invest in a stock," Bailes said.

James, Rupert Murdoch's son, is the chairman and chief executive officer of News Corp's European and Asian operations that oversee the British news titles.

A News Corp spokeswoman declined to comment on Times readership or advertising since the paywall was installed.

Visits to the website of the Times fell to a third as of July 20, data compiled by Experian Hitwise showed. Murdoch has not publicly commented on the traffic.

The News of the World might be able to turn the paywall model into more of a success, some analysts said.

News of the World will relaunch its site in October and make it available for £1 ($2.10) a day or £1.99 for four weeks, News International said last week.

An Apple iPad application will follow for £1.19 a week. Access to the site of Fabulous magazine will be included in the pricing, it said.

The News of the World website "will be the third of our titles to launch a paid-for digital proposition in under four months", News International chief executive Rebekah Brooks said.

"News of the World has a lot of content and videos and it could be easier to attract paying readers," said Benedict Evans, a media analyst at Enders Analysis in London. "People buy the paper to read about a footballer having sex, so why not do the same online?"

The Financial Times and Murdoch's Wall Street Journal already charge for online access, and have enjoyed a degree of success because they offer premium content for a niche group of readers, analysts said.

"I couldn't imagine the same would happen for the New York Post or even Bild in Germany because they are general," said Karsten Weide, a research vice-president for digital media and entertainment at Interactive Data Corp. Bild is Germany's biggest tabloid and the New York Post is a US tabloid owned by News Corp.

Paid-for online versions of the New York Times and Washington Post could also do well because their readers are typically wealthy and better educated, Weide said. The paid-for online model could also work at local newspapers, where the content isn't widely available, he said.

The New York Times plans to erect an internet paywall next year. The newspaper will see "some effect" on readership, chief executive Janet Robinson said in June.

"We feel that we will protect as much of the audience as possible" with a "metering" approach, that allows free access to a limited number of stories, she said.

The difficulty for general titles such as the Times is that similar news is available free from many more websites, including those of competing British newspapers the Guardian, the Independent and the Daily Telegraph.

Stories from the Times online aren't available on search engine Google so readers have no idea what the Times' journalists are writing about, according to Enders's Evans.

Rupert and James Murdoch have lobbied in the past for governments to do more to protect copyright online and prevent people from taking online content without paying for it.

The money an online reader generates is about a third or quarter that of a print reader. That's because online ad rates are lower and the average online reader skims through about five pages, while an offline print reader averages 70 to 80 pages, Evans said.

News Corp could also bundle newspaper subscriptions with TV offerings from pay-TV operator British Sky Broadcasting Group, which it controls.

Paywalls are about developing a closer relationship with readers, said Alan Brydon, head of trading at the MPG media buying agency, owned by France's Havas.

The paywall allows marketers to target more effectively, he said.

"I thought a year ago that paywalls were rubbish, but then you see the iPad and that's how people will read a paper," said Brydon. "In three to five years when iPads are as ubiquitous as iPods you will see people subscribing."

- BLOOMBERG