The Effect of the Paywall Strategy on News Corp Company Essay

The Effect of the Paywall Strategy on News Corp Company - Essay Example The newspaper industry earns the majority of its revenue through advertising from other companies who pay to depend upon the number of circulations. The advent of internet gave rise to electronic news where advertisers pay depending upon the page views. The paywall strategy implemented by News Corp by putting WSJ, The Times and The Sunday Times behind the strategy has resulted in a downfall in the number of monthly page views. However it is pertinent to mention here that availability of free content online and decline in the circulation of newspaper prompted the management to put online content behind paywall so that it may increase the newspaper circulation and at the same time generate revenue from subscriptions (Salmon, 2010). The objective behind the paywall strategy is to identify the customer and their wants and interests more clearly and build direct customer wherever possible. It further makes it clear that advertising alone will not bear the operational costs of print news a s successful newspaper of the future will charge for their content (News Corp, Annual Report, 2009). The strategy worked for Wall Street Journal as it provided editorial content, analysis and expert articles on topics which attracted certain target groups for subscription (Drury, 2010)2. According to comScore, the readership of Times UK website declined from 4 million unique visitors to 2.4 million, a 62% drop in the readership whereas page views came down by 90% from 41 million views in May 2010 to 4 million in September 2010 (Schonfeld, 2010)3. a) According to first quarter report for the fiscal year 2011, the newspaper businesses achieved an average 13% increase in advertising revenue with gains as compared to quarter in the previous year (News Corp, 2010). As paywall strategy was implemented in early June 2010, the results published in the report reveal positive results with an increase in the revenue, which means that company is making substantial profits through subscriptions. However the drop in the page views will be a big blow to the company as advertisers would not want to invest their money on a place where they could not get more visitors. Though the annual reports show marginal profits in newspaper segment, drop in page views from 21 million to 2.7 million will definitely have an impact on online revenue generation (Salmon, 2010).