Charge for access to website sees newspaper's online audience fall to 33% of its previous size – better than many had expected

The Times newspaper's website has lost two‑thirds of its audience following the implementation of a paywall, according to data published yesterday – a dramatic decline, but not as steep as many had forecast.

Readership figures for the site will be keenly scrutinised by the rest of the media industry, and particularly by rival newspapers, which are still struggling to work out a viable business model as readers migrate to online news and circulations decline.

Rupert Murdoch, who controls News International, the owner of the Times, announced the decision to install a paywall around the paper and its sister, the Sunday Times, last year, pitching him against many in the industry who are banking on the idea that drawing a mass audience with free news will eventually deliver strong advertising revenues.

The data from Experian Hitwise, which monitors internet traffic, showed that in the week following the introduction of the paywall on 2 July, visits to the Times site fell to 33% of its pre-registration level. The site had been expected to lose 90% of its traffic.

The drop may have been softened by an introductory charge of £1 for the first 30 days. Murdoch aims to charge £1 per day for access to the site or £2 for a week. He already successfully charges for access to the Wall Street Journal online, but it is accepted that readers are readier to pay for the kind of specialist data the WSJ produces.

According to Experian, the biggest drop in audience came in the five weeks ahead of the paywall going up, when visitors were asked to register their details. The site lost 58% during that period and the decline has only been modest since the wall went up.

Murdoch made a foray into free web content when he bought MySpace in 2005 for $580m, but the site has lost ground and he has put the emphasis back on subscription services.