LONDON News Corp's Times of London has lost less than 90 percent of its online audience since it started charging readers on the Web, fewer than it had feared, it said on Tuesday.
The Times is the first major consumer newspaper to put its online content behind a so-called paywall and the three-month-old exercise is being closely watched by an industry whose circulation and advertising revenues are in decline.
Asked on BBC radio whether the audience drop was greater or less than the 90 percent it had considered likely, Times editor James Harding replied: "It's less than that."
News International, the British newspaper arm of Rupert Murdoch's News Corp, said the new Times and Sunday Times sites and Apple iPad app had attracted more than 105,000 paying customers so far.
A further 100,000 readers who subscribe to the print editions and get the digital versions for free have activated their digital accounts.
That compares with 189,000 paying subscribers that Pearson's Financial Times reported for the third quarter, a 50 percent rise since the beginning of 2010 that was partly driven by the launch of the iPad tablet computer.
"The industry is still very much in an exploratory phase on paywalls and the jury is still out on their success. We expect to see many more adaptations of the model," said Matt Dodd of leading media market-research firm Nielsen.
Like News Corp's Wall Street Journal, the FT has always charged for its online content, seen as indispensable to the business community.
Subscribers are more valuable to advertisers than readers who access online content for free, because they tend to be more engaged and the publisher knows more about them, meaning a steep decline in audience need not be financially detrimental.
News International's Chief Executive Rebekah Brooks said: "It is early days but renewal rates are encouraging and each of our digital subscribers is more engaged and more valuable to us than very many unique users of the previous model."
Readers are charged 1 pound ($1.61) for a day or 2 pounds for a week's access to www.thetimes.co.uk and www.thesundaytimes.co.uk. The app for the iPad tablet computer costs 9.99 pounds per month.
The New York Times plans to start charging for some of its online content next year after readers exhaust a certain amount of free articles.
"Various hybrid models -- such as the FT's 'content walls' and the New York Times' 'metered model' -- are likely to be tried as newspaper publishers seek fuller data and feedback," said Dodd, who leads Nielsen's research and analytics in Europe.
(Editing by Jane Merriman)