The next time you read the hosannas about the success of the New York Times paywall, remember these two three pieces:
- Doc Searls’ detailed account of trying to find the actual cost of a Times digital subscription, a situation he describes as “bait and switch.”
- Jeff Bercovici’s report on the “shockingly weak” advertising results of the Times’ print and digital products, causing a 60 percent drop in third-quarter operating profits.
- Mathew Ingram’s analysis of the Times’ Q3 results, including the possible impact the paywall has had on ad revenue. (I added this third link after originally posting this.)
I admit that I might be wrong in my view that paywalls are a misguided strategy and that the Times is pursuing a backward-looking strategy. I admit that I don’t have all the answers about the right path to prosperity in digital journalism. But I know I am right about this: The Times doesn’t have this figured out either.
This makes me sad. Why are the magazines doing so much better?
LikeLike
Are they? I know of magazines that aren’t doing so well (Newsweek comes to mind).
LikeLike
Didn’t Forbes just announce that half of its revenue will come from digital. I realize that it’s revenue is probably much lower than it was in 2008. But still if digital is rising, maybe it will outbest print revenue? Also Atlantic seems bullish.
LikeLike
Marco Arment’s The Magazine is already profitable with the second issue. Like Doc says, we need the geeks at the table. Hell, we need to let them run the business. http://timwindsor.com/2012/10/25/how-one-geek-just-outdid-the-entire-publishing-industry/
LikeLike
Excellent points, Tim and Ellen. I don’t claim a deep level of expertise in magazines. But my understanding is that these are exceptional success stories, not representative of magazines’ success at innovating.
LikeLike
Steve: Get back to us when Digital First is anything but a fiscal and editorial crash and burn with really bad content and ugly websites.
LikeLike
Like you’ll ever admit that.
LikeLike
I see no real challenge to the claim that the NYT paywall has been a great success. Can someone seriously argue that the drop in print advertising was caused by…the paywall??? How is it the fault of the paywall that print advertising kept falling? What does any of this have to do with the paywall?
The only serious claim that someone can make is that if the NYT had kept their site free, they would be making more money from online advertising than they have made with the paywall money. How serious is this claim? In an online ad environment where even Google is making double digit % less per click than they did last year, this is laughable. The paywall is pulling in probably close to 150M per year now. Online CPMs are in freefall and will continue to be. Why, as an advertiser will I buy one spot on the NYT when I can get 30x that many on another site? If the NYT readership is so wealthy an advertising demographic as to make it worthwhile, then the paywall is a no-brainer.
The paywall is growing 50,000 subscribers per quarter and not even coming close to slowing down. In fact…it seems to be speeding up. When will the naysayers finally be quiet? And if 50,000 people are still signing up every quarter at $250 per year, now many people will the NYT really lose if they bump the price to $400? $500?
Revenue dropped by 0.6%. Why are we so quick to forget that the last quarter saw the first revenue climb by the NYT in dozens of quarters and it was ALL due to the paywall. You know what quickly plugs a 0.6% revenue gap? 50,000 new subscribers. Lets see Digital First Media try to match that.
LikeLike
Here’s the Times’ own piece on its Q3 results: http://mediadecoder.blogs.nytimes.com/2012/10/25/times-company-posts-a-profit-but-revenue-slips/
Nothing successful about that strategy. When the Times erected its paywall, I said it would bring in some revenue, but that it would divert energy, resources and creativity from developing a forward-looking business strategy. I was right.
And I’m pleased with the path Digital First is on.
LikeLike
Fair enough, but you seem to be using a non-mathematic, energy-based gauge of success. We will agree to disagree.
Again…how did the paywall drop print advertising?
LikeLike
The paywall didn’t drop print advertising. That’s been falling since 2006 (nationally; not sure about the timing at the Times). The paywall reduces digital advertising inventory and it’s not sufficient to stop the print bleeding.
LikeLike
[…] « NY Times paywall successful? Not so fast … […]
LikeLike
Leaving the philosophy and economics aside, paywalls are still implemented poorly.
They ask the your best community members to for money at an arbitrary interval (e.g. user has read ten articles in one month). This is likely not the opportune time to ask a valued and loyal community member to solidify their membership and support the business.
From a tactical standpoint, the goal ought to be to have very high traffic while asking your community to become members. The ask should be automated to match the times with the highest conversion rates based on user behavior on the site. And the ask and benefits should be tailored to the tastes of the individual user based on their history interacting with the brand.
In other words, it makes far more sense to offer perks and memberships than paywalls because that is how one might treat consumers.
LikeLike
Excellent points.
LikeLike
Here’s a report published today? on this issue. Personally, I think the debate over paywalls is being decided by action. More and more newspapers by the day are going behind the wall and you’re not seeing very many (I don’t know of any) that are abandoning the wall once it goes up.
http://jimromenesko.com/2012/10/31/readers-ok-with-paywalls-if-given-a-compelling-justification/
LikeLike
That link is hardly convincing.
LikeLike
My former newspaper, the Cedar Rapids Gazette, abandoned its paywall after several years. It’s too early to expect anyone in the current wave of paywalls to give up. But watch …
LikeLike
[…] a topic of interest. My response to a Dean Starkman post on CJR and a brief post curating some links about the New York Times paywall combined for more than 1,000 […]
LikeLike
[…] usual, I blogged a few times about the news business debate about paywalls. A December post ridiculing the suggestion that anyone has won this debate was one […]
LikeLike
[…] ridiculous notion that whether paywalls work has been settled, a roundup of paywall commentary, a piece about the New York Times’ paywall and a piece debunking the notion that paywalls ensure quality (or that free access hinders […]
LikeLike