The Sun’s paywall: will it generate enough to secure media jobs?

When it introduced its paywall in August, The Sun became the first tabloid in the UK to charge for online content. For £2 per week, users are granted access to the newspaper’s website and its smartphone and tablet apps.

The Sun’s publisher, News UK, has previously taken sister titles The Times and Sunday Times behind a paywall, so the move was not wholly unexpected. However, taking The Sun behind a paywall was considered a gamble by some, given how News UK needs the publication to generate cash to support the wider business, and the wildly different approaches being taken by its closest rivals.

One of The Sun’s big online rivals, Mail Online, is now the world’s most popular newspaper website. It has achieved this by remaining an open site, where revenue is created by the scale of its audience.

Introduction of the paywall at The Sun also had the effect of handing The Mirror newspaper an immediate boost to its web traffic, which it sought to capitalise on with an aggressive marketing campaign intended to hoover up disaffected Sun readers who still wanted to get their news for free.

In a move to drive users to take up subscription, News UK bought rights to show Premier League highlights on The Sun’s and The Times’ online, mobile and apps platforms, in the summer of 2013.

In the four months since going behind the paywall, the diet of football highlights and news has brought The Sun 117,000 subscribers. That’s a good start, according to some City analysts, but the estimate of the kind of subscriber base needed by The Sun to cover its outlay for the digital product are anywhere from 250,000 to 340,000.

According to Douglas McCabe, media analyst at Enders Analysis, The Sun’s subscription revenues are projected to be £10m per year. To put that figure into context, The Sun’s print edition generates £250m per year from its readers and a further £200m from advertising. So, despite a solid start, there is still a long way to go for The Sun’s digital subscription offering.

As The Sun plugs away with its subscriber approach, other news outlets are embracing different means of driving value from digital. The Telegraph has recently announced that its profits have increased for the third consecutive year, to £60m. This can be partially attributed to their online metered approach, introduced to international users in November of 2012 and extended to domestic users in March 2013. This approach has resulted in a boost in subscriptions without any great drop-off in traffic numbers.

Mail Online and Buzzfeed (a newly-launched rival to traditional news sources) have both adopted free-to-access approaches with display or native advertising attached to articles as a way of generating income. Using this approach, The Mail has targeted £60m of digital advertising revenues for 2014. Buzzfeed, which adopts a native-advertising approach and does not make public its financial results, had projected revenues of $40-$60m for 2013.

Whilst The Sun’s paywall is still in its infancy, it would appear from the figures above that a metered or free access approach would make more commercial sense for the newspaper industry to broadly adopt. But then, only time will really tell which of these models turns out to be the real money spinner and the one to secure – and possibly even grow – media jobs in the UK.