Is The NYT Paywall Working?

Almost one year ago in mid-March 2011, the New York Times put up a paywall on its site and started charging frequent visitors. So how is it doing? Traffic to the NYT predictably took an initial hit and is still slightly below its pre-paywall levels. But the number of paid digital subscribers is growing steadily.

In its most recent quarter, the New York Times announced today that there are now 454,000 paid online subscribers to the NYT and the International Herald Tribune, up 16 percent from the previous quarter. (If you add in the Boston Globe’s 18,000 digital subs, the total rises to 472,000, but I’ll stick with just the NYT numbers for this analysis and the chart above).

The number of paid subscribers to the NYT is up 62 percent since the second quarter of 2011, when it had 281,000. Digital subscribers pay between $15 and $35 a month (although you can get a 4-week trial right now for 99 cents, and print subscribers get the online versions for no additional charge). Total circulation revenues at the New York Times Media Group is up 12.8 percent to $190 million, while total advertising revenues are down 4.5 percent to $173 million. Circulation revenues are now more than advertising revenues.

And it’s not just weakness in print advertising that is bringing down those numbers. Digital advertising revenues in the news group alone are down 2.3 percent (and down an even greater 10 percent if you count the struggling unit). Without the paywall, digital ad revenues would be higher.

But the tradeoff seems to be working somewhat. Circulation revenues are growing faster (up 12.8 percent) than advertising revenues are declining (down 4.5 percent). All of these numbers are just for the New York Times Media Group, but the same trends are showing up across the entire company, which includes numbers from the Boston Globe and (Total advertising revenues are down 8.1 percent, while total circulation revenues are up 9.7 percent).

The NYT is now at about half a million paid digital subscribers. That number is partly inflated by special discounted trial offers, but if it can keep those trial members paying at full price or convince print subscribers to stick around, the paywall will be doing its job. It really needs to get to one million paid digital subscribers to prove enduring. By that point, digital advertising revenues might also rebound because paid subscribers are considered more loyal, and thus more valuable to advertisers. That’s how it works in print media. Magazines and newspapers routinely spend marketing dollars to increase paid circulation so that they can charge more for the ads. The ad rates are typically based on the number of “paying” subscribers (even if they are not all paying full price).

Online it’s a little bit different because the same ads are shown to paying subscribers and casual visitors ( who can read 10 stories a month for free). Paying subscribers, though, will make up an increasing percentage of the total pageviews since they are not limited in how many pages they can view. The NYT salesforce should be trying to charge more for its paying audience, which overtime should result in a higher blended CPM (cost per thousand impressions) for its online ads—or at least keep upward pressure on those rates.

It doesn’t take that many more paying subscribers to impact pageviews significantly, which is what the advertising revenues are based on (impressions). If you are paying for the NYT, chances are you go there every day and click to your heart’s content. I’d love to know the number of clicks per paid subscriber. But I’d be willing to bet that at about one million paid subs, the pageviews more than make up for what they lost to the paywall.

12 thoughts on “Is The NYT Paywall Working?

  1. The big news is that the revenue at the news media group is now growing for the first time in years. If you want to know how they would have done without the paywall, it is very easy. Look at the revenue numbers at the Guardian and Washington Post- dreadful. I know journos love their work to be seen, but I imagine keeping their jobs is up there too.

    • Good point. And look at WSJ, only paper with more paid online subs and doing even better than NYT.

      • They are in a much better position. People are far more willing to pay for information that directly impacts their business decisions.

        • Eli: Maybe so, but I think it’s more related to the fact that business newspaper and magazine subscriptions are often paid by someone else – i.e. the employer. (Financial Times is thriving, too.)

  2. That’s all a very nice story, but anytime I ever wrote to the NYT they never ran any of my replies to editorials and they don’t seem to have any minority reporters points of view. So I guess I’ll just keep my money in my pocket (cause they won’t hire me) and read google news for free and write my own blogs like you.

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  4. Are you sure that those digital subscriber numbers are *digital only* (ie, not getting digital access *free* as a result of being a print subscriber)?

    I’ve read multiple NYT 10Q’s and its latest 10K and I see very, very few specifics about the much-ballyhoo’d “success” of the paywall (a dying MSM has exempted the NYT from close scrutiny, in its desperation for salvation from the internet).

    I have a very strong sense that the NYT is gaming the numbers through use of ambiguous wording (you’ll note *they* never say “digital only” – they leave that up to their lazy MSM compatriots).

    Again, are you sure that the NYT isn’t using the free digital access that comes along with continued paper-based subscription to create an astoundingly misleading impression?

    The NYT’s “Berlin Paywall” is much more about keeping paper-based subscribers *in* (“See, we give you access to that internet thingee, too!”) than in keeping non-subscribers *out* (otherwise, why would the paywall be so laughably easy to circumvent?)

    • They are described as: “Paid subscribers to digital subscription packages, e-readers and replica editions”

      That would exclude the print subscribers who get digital access for free.

  5. Hmmm…maybe the ‘success’ here is just being able to turn the tide just slightly.

    And that’s my takeaway…this has been a slightly successful initiative.

    I just wonder though…what other print-based publications have the:
    1. Unique nation/world readership demographics
    2. Vast financial and technological resources to pull this off

    Is this hopeful news for the industry? IMO…too soon to tell.

    • Alright. Let’s face it. The Freekly is mainly used to line bird cages and stuff pcegakas. When I did read it, I just looked at Risa’s Astrology and laughed.If you want a good hot dog, eat a Boar’s Head one. If you want a good burger, Brenda’s is an excellent choice.If you want a good chicken sandwich, check out the new Chick Fil A on sixth street. Ya’ll know what I’m talking about.I think the press release went out on Friday at 5 because they were trying to get it done before they left for the week? Also, since the equipment is new to our area, it doesn’t surprise me that it wasn’t known offhand how much it would cost to repair.

  6. my sympathies were and awlyas will be with the dumpy nerd in that situation, not the cool/popular kids, whose outward self-esteem was often a brittle mask. In fact, all that effort spent trying to be cool and popular was often based on a lack of self esteem, not a healthy excess of it. In fact, since those dumpy nerds were and are often smarter and more forward thinking than the cool/popular folks, I have a hard time with the roles you’ve assigned to the two papers/news sources/whatever we call them now. As a big fan of the Flyer and not a fan of cool/popular, I call total analogy fail, at least for me.@LeavnF’ville- Evil? really? Paid parking might be a PITA, it might or might not be a good idea right now, but it hardly rises to the level of evil, and any self respecting counterculture oughtta have bigger fish to fry. like it, don’t like, oppose it, whatever. But neither side of that is particularly countercultural. I don’t think there’s been anything countercultural happening on Dickson for a looooong time now, the rents are too high.

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