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1 November 2012

Telegraph institutes paywall overseas

Is the paper abdicating US growth in favour of a quick buck?

By Alex Hern

The Guardian’s Josh Halliday reports that the Telegraph has launched a paywall for online readers based outside of the UK:

Telegraph.co.uk is moving to a metered paywall model similar to the New York Times on Thursday after years of planning. The new payment system was introduced at 12.00 GMT according to an internal email seen by MediaGuardian.

The site will remain free for UK users, but overseas visitors will be asked to pay £1.99 for a month’s access after viewing the site 20 times.

The move has been in the pipeline at Telegraph Media Group for more than two years. It has been hit by continued delays and has been hampered by the departure of several key executives.

62 per cent of the Telegraph’s readership is from overseas, so there is a considerable amount at stake here. Nonetheless, the move feels like an abdication of sorts for the paper, which remains one of the most consistently profitable in the UK.

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In charging the £2 a month to international readers, the paper is attempting to monetize its large overseas base; but the fact that that paywall is not going up domestically makes it apparent that the leadership fear falling prey to the same fate as the Times, which has struggled to stay relevant in the national conversation when it can only be read by subscribers.

If the Telegraph is treating its overseas readership as a fixed quantity, that decision makes sense; and anecdotal evidence suggests that the paper is especially popular amongst expatriates, who will already have that relationship before they enter the paywall.

Nonetheless, the strategy is in stark contrast to papers like the Guardian and Mail, which treat their overseas readership as a potential source of significant growth. The Guardian takes the exact opposite approach to the Telegraph, charging for UK tablet readers while offering the same content up for free in the US, while the Mail has piling resources into its US branch, and has made a name for itself providing the sort of celebrity content which US newspapers have little expertise in.

If there is a precursor for what the Telegraph is doing, it’s the Independent, which also started to charge US users a small paywall after they read more than 20 articles a month.

Unfortunately, the Independent’s move wasn’t particularly successful. PaidContent’s Robert Andrews writes:

While Independent.co.uk’s domestic UK audience has jumped by 75 percent during the period, its Rest-Of-World traffic (dominated by the US) has grown by just 5.5 percent.

Leonard acknowledges overseas audiences “don’t necessarily stick”, but “advertising has flourished for us in North America so we’d like that to continue”.

“So we’re creating new reasons to engage with us,” Leonard tells Journalism.co.uk. “If we were the New York Times, and had a real following, particularly a subscription-based audience, I think we might have a different view on that.”

If the Telegraph gets it right, they could have a nice little income; but even the best case scenario is that they have sacrificed the chance of growing their future audience for a payday now. That may still be a prudent move; but it’s also the safe one.