Will consumers pay for content that has been free for so long?

With reports of an apparent 90% dropoff in online readership numbers, the London Times is facing the threat of having its back against the wall that it built between itself and its online followers.

Since the Times introduced its new mandatory registration system in June, a so-called �pay wall� online users must climb to read articles, previous readers have not been lining up to pay for content they once had free access to. The London Times is an early adopter of a transition soon to take place throughout the publishing industry � the rollout of subscription-based access to once free online news content, largely driven by industry-wide declines in print readership.

Part of Rupert Murdoch�s News Corp. (NASDAQ: NWS) media kingdom, the Times has yet to release official numbers on post-launch registration, but sources indicate that daily readership from pre-wall days is around 10% of the original number who were registered for the free trial. The overall traffic is down about 60%.

Keeping a close eye on how things develop for the British daily is The New York Times Company (NYSE: NYT), which is set to unveil a pay-for-content subscription plan of its own in early 2011. NYT today posted its first quarterly revenue growth in almost three years, thanks largely to growth in online advertising sales. The company has been cutting costs in print and turning attention to its online operations in preparation for the uncertain transition.

News Corporation�s stock has fallen well below broader market trends in the past three months. The New York Times Company�s net income is down -18% from last year.

Some print publications have had strong enough of a customer base to successfully make the transition, such as News Corp. property The Wall Street Journal, which has made the leap with a fair amount of consumer retention. Some believe the strong corporate subscription base and the valuable financial content have allowed The Journal to cross over successfully online. But let�s not forget the disaster Newsday faced when it decided to bury all of its online content behind a pay wall last October. After spending about $4 million to redesign and relaunch the initiative, the total number of subscribers attracted after its first three months was 35.

Although the London Times is still in the early stages of its pay wall debut, the number of consumers resistant to this new model doesn�t bode well for those in the industry who are set to follow a similar business model in the coming weeks and months.

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