Ny Times

• Is Paywall working? How would you evaluate the current Paywall compared to the two previous ones? Do you think it’s appropriately designed compared to the Financial Times and WSJ?

The paywall is an interesting project that’s been positively influencing the revenue generation ability of the New York Times in its first year. Although it hasn’t turned things around yet, I’d say that the paywall has been working well so far due to the below criteria:

Subscriptions: although the number of subscribers at the end of 2011 is somewhat still low compared to the market potential (390,000 subscribers vs. 123,000,000 people visiting newspapers websites in the U.S. in May.2010), the continuous growth in subscriptions is an encouraging sign. Moreover, the fact that 70% of the print subscribers registered for the free digital access is another positive sign that confirms people’s interest.

Website traffic: it is very important that while the subscriptions are growing in numbers, there’s no significant drop in the number of unique visitors and page views throughout the year. The important point here is that the New York Times avoided the huge drop risk in page views upon introducing the paywall. The website traffic drop has a negative effect on the advertising revenues which would further hurt the New York Times.

Revenue: although the advertising revenue of the New York Times Media Group fell by 6% in 2011, the 3% growth in circulation revenue almost offset it entirely. This is a strong indicator that the paywall has the potential to generate more revenues and make up for the decreasing revenues of the company should it be managed well.

Compared to the two previous paywalls, the current one has a smarter and more of a strategic design. The device-specific and metered paywall ensures capturing significant subscription revenues from the loyal and needful base, marketing the New York Times product, while not losing the casual viewers that make up an important percentage of the website traffic. The initial paywall’s cost was 35$ monthly and applied to overseas browsers only. The second paywall’s cost was 49.95$ annually, applied to noted columnists only, and reached a total of 227,000 subscribers before the paywall was stopped. The 390,000 subscribers that the new paywall achieved in its first year is considered a big success compared to the previous ones.

While the FT and WSJ chose a bulletproof paywall, the New York Times chose a leaky wall, which plays an important role in maintaining the website traffic at a strong level. Moreover, although the New York Times’ membership is pricy compared to the rest of the journals (annual subscription in the New York Times ranges $159-$445, while the WSJ costs $207 annually) the number of subscriptions remained strong, probably to the strong brand and news quality provided.

• Why