It’s Official: News Corp.’s Paywalls Are a Bust

After months of speculation about the impact of reader paywalls at two News Corp. (s nws) newspapers in Britain — the Times and the Sunday Times — the media giant finally released some official numbers today, and they don’t paint a very pretty picture. While the Murdoch-owned publisher claims to be “very pleased” with the results, the figures show that the two newspapers have lost a huge portion of their previous readership, and only a tiny fraction of those readers have chosen to pay for the company’s product. If News Corp.’s intent was to wall itself off from the Internet, however, it seems to have succeeded.

According to the company’s release, the two newspapers “have achieved more than 105,000 paid-for customer sales to date.” About half of that number are monthly subscribers, News Corp. said, while the rest were single-copy or pay-as-you-go customers — and the figure also includes people who have paid for the papers’ iPad apps (s aapl) and Kindle (s amzn) editions. On top of that number, the company said that 100,000 subscribers to the print versions of the Times and Sunday Times had activated their accounts and gotten access to the web version or the iPad app (which subscribers get for free).

The bottom line is that News Corp. has managed to attract just over 50,000 paying monthly subscribers in the four months since it has been running its paywalls at its two British papers — which charge $1.60 for a day’s access to the site or $6.40 $3.20 for the week — and along the way has managed to sign up 100,000 or so who were already subscribing to the print edition, who are paying nothing (although holding on to those subscribers is likely a key part of Murdoch’s strategy).

[inline-pro-content] This looks even worse when you compare it to the total readership the Times and Sunday Times had before the paywalls went up, which according to Nielsen, was about 3 million unique visitors a month. In other words, after four months of selling its new paywall system, News Corp. has only managed to convince a little over one-and-a-half percent of its readers to pay something for the newspapers’ content — and has only been able to convert half of that already tiny figure into actual monthly subscribers. Meanwhile, the site’s overall traffic has collapsed by almost 90 percent, although News Corp. is painting this as a success.

Times editor Jeremy James Harding told the BBC that the paper is okay with the loss of readership because “we were engaged in a quite suicidal form of economics, which was giving our news away for free” (the editor added that online media was mostly a “huge echo chamber” anyway). News Corp. executive Rebekah Brooks, meanwhile, said the company was pleased with the results, and that “each of our digital subscribers is more engaged and more valuable to us than very many unique users of the previous model.”

It’s hard to see how much more valuable they could possibly be, however: a number of major advertising players have said they are less interested in working with the Times and Sunday Times now as a result of the paywalls, and even an optimistic estimate of the amount of revenue the company is bringing in from its paywalls and iPad app only comes to about $8 million (and that’s before Apple’s cut for the iPad app) which for News Corp. is almost a rounding error. Meanwhile, the newspapers have been cut off from the news flow on the broader Internet, and the potential benefits of attracting links and commentary from other sites that could help to promote their content. Not a great trade, no matter how you slice it.

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Post and thumbnail photos courtesy of Flickr user Dave Matheson