Will Rupert Murdoch’s paywall add up?

The Times‘ new paywall goes up in June. Will it work? Forrester Research’s Nick Thomas tries to weigh up the numbers. He’s equivocal, which probably just goes to show how risky the move will be:

What kind of conversion rate would make this viable? There are few precedents, though in the gaming world, a paid conversion rate of 2% would be considered successful. And even theFinancial Times, the self-styled pin-up boys of the paywall, have found that only around 121k of the 1.9m who have registered for the site, are paying subscribers. That’s just 6.4% of registered FT.com users paying for content which helps them do their job, and which they often expense anyway. What chance for a generalist title competing with free rivals?

Even assuming a 5% conversion rate, that would mean 60,000 from a daily online readership of around 1.2 million (according to the ABCe figures). Factor in that around two-thirds of the readership are outside the UK, and advertisers locally will be left with a readership of around 20,000. Advertisers may say they value engagement over scale, but will they actually come on board? Even if current revenues are disappointing, they are going to be hit hard by such a diminution of scale. And the costs of delivering a high-quality web site will still need to be met.

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