Handwriting already on the paywall?

Not that this is news to us, but it turns out the paywall dream may far fall short of what at least some not entirely obscure publishers hoped. According to a new report from the hardline, no-punches-pulled British telecommunications consultants Enders Analysis, paywalls will never be able to compensate for the death by a thousand bites that newspaper revenue streams continue to suffer:

… A newspaper pay wall subscriber is worth only a quarter to a third of a print buyer: even if every single print buyer is successfully converted to the pay wall, newspapers will still face a basic problem of scale. … Pay walls will not be able to compensate for lower revenue per reader by expanding the audience for paid news, due to the long term decline of circulation, free online news, 24-hour broadcast news and free-sheets. … Future change will be radical: publishers may need to consider producing a newspaper its loyal readers recognise and value with just 200 rather than 500 journalists …

At the same time, News Corporation/News International magnate Rupert Murdoch seems to be standing firm in his dedication to the paywalls recently erected around his English flagship broadsheets, the Times and Sunday Times, despite a raft of really bad news. Says the Independent:

Faced with a collapse in traffic to thetimes.co.uk, some advertisers have simply abandoned the site. Rob Lynam, head of press trading at the media agency MEC, whose clients include Lloyds Banking Group, Orange, Morrisons and Chanel, says, “We are just not advertising on it. If there’s no traffic on there, there’s no point in advertising on there.” Lynam says he has been told by News International insiders that traffic to The Times site has fallen by 90 per cent since the introduction of charges. “That was the same forecast they were giving us prior to registration and the paywall going up, so whether it’s a reflection on reality or not, I don’t know.”

He warns that newspaper organisations have less muscle in internet advertising campaigns than they do in print. “Online, we have far more options than just newspaper websites – it’s not a huge loss to anyone really. If we are considering using some newspaper websites, The Times is just not in consideration.”

So, Murdoch’s looking uncharacteristically willing to invest significant resources into a (so far, apparently) failing venture. Is this sheer entrepreneurial hubris, an unwillingness to admit a bad move? I doubt it. My guess is that the revenues and stature lost at the Times Online simply don’t add up to enough for Murdoch to pull the plug on the experiment. Time and page visits will tell.