Nice paywall, Mr Murdoch; now what are you going to do about Google?

So after all that talk and months of planning, Rupert Murdoch’s NewsCorp has finally unveiled his grand scheme to make his newspaper websites turn a profit.

And it is, er, a paywall.

NewsCorp’s The Times will charge £1 a day or £2 a week for access.

Bit of a disappointment really. I was at least expecting some form of tiered charging system, a la the Financial Times. But on a global level, a micropayments system, similar to the ones used in online gaming, does seem to have traction.

Can it work? I asked that months ago on my old Media blog. And frankly, we’re no nearer any answers. It seems crazy to think that people will pay £1 to read a news story they can read anywhere else for free. The BBC is still out there, of course, and even if it goes through with plans to scale back its online content, there is still the Guardian, which has pledged itself to a free-access future. The Times is really going to have to show it can deliver value-add content, or rely on a very loyal minority. And let’s face it, Murdoch’s online track record isn’t exactly sparkling.

Still, the sums involved are pretty substantial, according to the Guardian:

Assuming that only 5% of daily users convert to the paywall system – a standard metric for paywalls – that would bring in £1.83m if they each buy a £1 daily pass. At a 10% conversion, it would net £3.66m per month for the two papers. If more people of those choose to buy the weekly pass, the revenues would be lower.

Compare that with the £40m made by The Guardian’s web division in the last financial year, according to outgoing CEO Carolyn McCall.

The big question now is what to do about Google. We all know that if you paste a headline into Google you can bypass a paywall – just try it with the Wall Street Journal. Should The Times block Google and protect its paywall but hurt search traffic? Or should it be like the WSJ and just pretend nobody knows about that?

There’s been a lot of sabre-rattling toward Google from NewsCorp, suggesting it might seriously pull back from Google. Instinctively that feels like a mistake, and something that could seriously set The Times back years. From personal experience I know that news sites get more than half their traffic via search. What’s more, The Times seems to be looking for one-off payments rather than tying people in to annual subscriptions. That approach will require regular traffic through the site.

One thing’s for sure, though. If Murdoch starts making money from this, there will be a lot of others following him. And the more of them that do so, the less free competition there will be for The Times.

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