News UK CEO Touts Benefits of Online Paywalls

News UK CEO Mike Darcey P

Mike Darcey, the head of the British newspaper arm of the new News Corp, says he would rather go after "meaningful revenue" than pat his own ego with wider readership.

LONDON – Mike Darcey, the CEO of News UK, the U.K. newspaper arm of Rupert Murdoch's new News Corp, on Tuesday touted the financial benefits of digital paywalls, giving a latest glimpse into his business priorities.

In a speech here at the Times CEO Summit, he said other newspaper groups are giving up profit by continuing to offer online content for free and trying to build a larger audience.

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Darcey said he would rather "generate meaningful revenue" than simply focusing on growing the size of a paper's web audience, which sometimes only makes executives feel good.

Darcey's company has used paywalls for its Times of London and Sunday Times and has said it would soon launch a paywall for tabloid The Sun.

Suggesting that paying subscribers are more engaged with the content, he argued that measuring web traffic is often only "good for the ego." After all, much passing traffic comes from people "popping in for only one article, referred by Google or a social media link, not even aware they are on a Times or a Sun website," Darcey said.

The boss of News UK, which was until last week was called News International, made his comments just a day after the stocks of newly split entertainment company 21st Century Fox and publishing firm News Corp started trading.

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"Some people have argued that the problem with a paywall strategy is that you lose reach, while others who maintain a free web presence continue to enjoy large numbers of unique users and page views," he told the conference, according to a copy of his speech. "This reach doesn't generate any meaningful revenue, and the pursuit of it undermines the piece of the business that does make money."

Darcey said that The Times currently has 140,000 paying digital subscribers and 395,000 print buyers, making for a total of 435,000 paying monthly subscribers.

Concluded Darcey: "If your purpose contemplates still being here in five to 10 years' time, then the choice seems clear: it is better to sacrifice reach and preserve sustainable profitability."

Darcey earlier this year announced the plan for a paywall for The Sun, to be implemented during the second half of the year. He said back then that the tabloid's current offer of free Internet content was "untenable."

The former COO of U.K. pay TV giant BSkyB, in which 21st Century Fox owns a 39 percent stake, was named CEO of the U.K. publisher late last year.

Twitter: @georgszalai