I’ve seen several tweets today promoting the Hitwise blog highlighting the post-paywall traffic drop for the New York Times. Clearly so many media watchers, particularly publishers evaluating similar strategies, are eagerly awaiting any news from the latest high-profile paywall. I read the news of a 15% decline with a little feeling of “wow, great news for New York Times”. There are immediately a few questions to interpret this (good!) result:
1. How well monetised is the remaining traffic?
2. Have consumers had time to figure out what is the best option for them?
3. What were the expectations? Surely some decline was expected.
First, a quick analysis suggests that NYTimes.com would need to convert less than 1% of its 48m monthly unique visitors to a subscription to offset advertising revenues attributable to a 15% decline in visits. This assumes subscribers continue paying for less than 4 weeks after the 99c promo expires. It is safe to say that a small proportion of subscribers will never cancel and many will pay for longer than the first month. This suggests to me that there is likely to be a net positive result from raising the paywall.
There are a number of ways for people to continue reading NYTimes.com without paying, with search and shared links being the biggest two extensions of the 20 pages per month. No doubt there are plenty of staff monitoring this and considering where there are loopholes which need closing versus ones that are effective sampling opportunities. It is impossible to tell how well monetised these users will become, just as it is as yet unknown whether NYTimes itself will change its Twitter or Facebook strategies to more finely target and convert incoming casual traffic.
Second, there are so many complexities the the subscription model itself that many people will be trying to figure out what is the best option for them. Most of us have no idea how much we use any particular utility within our daily lives. Pages viewed on a particular website will be no exception. A reasonable number will elect to subscribe to the print paper and take their digital content as part of that. Regular readers may not yet have all the gadgets that those of us in media and technology consider essential. I’ve used the ‘what would my mom do’ test on this one – not a New Yorker, she’s become a Sunday home delivery subscriber for $3.75 per week which includes full digital access on all platforms. She is a devoted Times reader online and will continue to be a large source of recommendation for me, with or without a subscription. More insight to people’s choices will become clear as their 99c/week promotional offer expires, as people determine whether they get enough from their 20 pages plus links sent to them from other sources, and once there is a few months of data to really understand.
Third, and finally, I really suspect a 15% decline in visits must be within expectations. Despite commenting that they did not expect to usage to decline much given the import of their heavy users who were expected to take up a digital subscription, there would certainly be a provision within the business model for this initiative that allows for a decline. The critical question is what’s happening below the surface and how is it impacting advertisers? If NYTimes.com can still fulfil their advertising demand and maintain strong yields, the first 12 days of traffic performance could exceed the business plan. The subscribers taking up home delivery subscriptions still accomplishes the same goal – readers are paying for content – and probably looks like upside in the overall plan to substitute growing digital subscription revenues for shrinking yields on ad revenues (separate post on that later). In the long run, I see NYT with a sustainable digital journalism business whose revenue streams begin to reflect historical print papers – subscription/newsstand plus advertising/classifieds.
No matter what your hopes are for the success of the New York Times’ paywall, this result should have produced a little flutter of excitement. I, for one, strongly support paid content and rewarding those who invest in quality journalism and protect our access to information and freedom of speech. I’ve lived abroad for a long time, but those first amendment rights stay with me forever.