Times UK Paywall: Terrible for Readers, Good for Business?

times ukTechCrunch scribe Erick Schonfeld has a pretty incredible breakdown of how the new paywall at Ruper Murdoch’s UK Times website is faring.

Since the paywall went into effect in June, the site has lost two-thirds of its visitors, or about 4 million readers per month.

At first, that seems like confirmtion that the paywall was a terrible idea.

But as Schonfeld points out, The Times also added 105,000 paying subscribers; he estimates half pay a monthly fee and half pay a la carte.

“Before we pile on here, let’s take a look at those numbers. Basically, those 50,000 monthly subscribers are paying $12.80 a month, or $640,000 a month total. Let’s say the other 55,000 pay-as-you-read crowd is generating another $160,000 a month in subscription revenues (I am being generous here and assuming two days a month per person at $1.60 per day). That comes to $800,000 a month, or $9.6 million a year in online subscription revenues.”

Schonfeld compares that to what the paper would have made on advertising and concludes that they are actually making 2-4 times more than they did before.

Felix Salmon over at Reuters doesn’t think the Times UK paywall numbers are so clear. “Certainly traffic has fallen off a cliff, from 21 million to 2.7 million pageviews per month. And while News International is trumpeting “more than 105,000 paid-for customer sales to date”, everybody suspects that most of those are one-off £1 purchases to get a 30-day free trial. (News has also bundled in the papers’ iPad and Kindle editions, just to make the totals even more opaque.)”

If Salmon is right, the paywall is a total bust. If Schonfeld’s estimate is closer to the truth, the paper faces an interesting paradox: readership or revenue?