Telegraph paywall is a measured approach to digital subscriptions

http://www.guardian.co.uk/media/2012/nov/02/telegraph-online-paywall-digital-subscriptions

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It was born in Euston, moved back to Victoria, then finally launched on 1 November 2012 as the Telegraph unveiled the long-awaited metered digital paywall it has worked on for two years.

From Thursday, international readers of Telegraph.co.uk are being asked to pay £1.99 a month after visiting the site 20 times, or sign up to its £9.99 digital pack for access to its iPad editions.

The paywall is on the lighter end of metered-access models adopted by other newspapers, including the Financial Times and New York Times, in recent years.

Telegraph Media Group (TMG) was quick to align its metered paywall with the New York Times in its press release – and with good reason.

The New York Times has pioneered the metered model, with 566,000 subscribers now paying between $15 (£9) and $35 a month after hitting the 10-articles-a-month limit. For that price, they get unlimited access to the site and its various mobile apps. The company says this has helped boost circulation revenues by 7.4% year on year, to $235m in the third quarter of 2012.

TMG executives have studied different models adopted by rival newspapers for months, driven by the belief that online advertising will never sustain online journalism in the long term.

They opted for this model because of its simplicity, emphasising that readers can still access a generous chunk of Telegraph material online for free before they are asked to hand over a modest amount of money.

TMG executives did not want price to be a barrier, nor did they want to restrict the amount of material available for free, but are understood to be open to amending the model depending on its success.

A win for the Telegraph would be a boost in digital subscriptions – currently in excess of 300,000 for the smartphone and iPad products – and more data about the newspaper's most loyal readers.

Advocates of the metered model reject the idea that media groups cannot charge for content online, pointing to new digital music services such as Spotify and Deezer.

The backdrop to the Telegraph metered paywall launch on Thursday was a report by research group Forrester that forecast online paid-content to grow 65% to £8bn a year by 2017, driven bythe growth of smartphones and tablet computers.

Darika Ahrens, the analyst behind the report, said that consumer spend on news content would grow by 77% from €158m (£126m) this year, to €279m in 2017, including digital subscriptions to newspapers such as the Financial Times, New York Times, Wall Street Journal Europe, the Times, Sunday Times – and now the Telegraph.

Asked what she made of the Telegraph's move to charge online users, Ahrens said: "Finally. We've been recommending newspapers start monetising with subscription models since 2009.

"Online subscriptions from overseas visitors alone are unlikely to offset the decline newspapers have experienced in advertising revenues. This should be just one part of a multi-channel monetisation strategy."

She added: "Shifting consumers who are used to free [access] over to paying customers is tough. The Times and Sunday Times risked it and went cold turkey, but this approach allows the Telegraph to develop the right payment models with a smaller user base, then refine the model to offer wider packages to UK users."

The timing for the introduction of the paywall is bold, coming just a week before the US presidential election and in the aftermath of superstorm Sandy that has dominated headlines since the weekend.

There had been talk internally that the paywall would be launched ahead of the London Olympics, but that idea was canned and the paper benefited from the predictable rise in traffic that boosted most UK national newspaper websites.

The digital vision for the Telegraph is quite clearly international, following the lead of the Daily Mail's Mail Online, and Guardian US. The challenge now is to convince its nearly 33 million monthly online visitors based overseas that access to its news, comment and cartoons are worth paying for. As ever, the industry will watch with interest.