NYT Paywall Working Better Than People Expected, But That Doesn't Mean It's Working

techdirt reporting:
Over the past few days, there's been a lot of talk about the NY Times "paywall" and whether or not it's "working." It was kicked off by a Bloomberg piece arguing that things were going amazingly well with the paywall, proving the doubters wrong. I've actually had a surprising number of people contact me about that article, asking for my take on it -- so let's make a couple of upfront statements and then explore it:

1. First off, I agree that the performance of the NY Times paywall greatly exceeded my own expectations for it. I was quite harsh in predicting it would be a complete flop. I was wrong. It wasn't a flop. I explore why below.
2. That said, I don't think that it's been nearly as big a "success" as some are making it out to be, and I still think that it wasn't the best play that the NYT could have or should have made -- and it's doubtful that anyone else following in the NYT's footsteps would find similar results. And that's a pretty big problem, because even if you think the NYT's paywall should be judged a "success" it doesn't change the fact that its revenue continues to drop (and not just its print revenue -- digital revenue is struggling too). Perhaps the paywall may have limited the revenue collapse, but it has done little to create a new and sustainable business model.

Separately, it should be noted that the success "numbers" are based on an outside estimate from an analyst, and could be wildly off-base (in either direction). So, some grain of salt should be taken with the claims that the paywall made as much as it did. Now, let's do a bit of exploration.

Why has the paywall done better than expected:

• It's not really a paywall! This was a point we realized soon after the details were released, when it became clear that the paywall was so porous that no one would ever have to pay. Ever. As we noted, it's really the Emperor's New Paywall, in that it's completely invisible. If you don't want to pay, you just don't use javascript, or you remove the text after the ? at the end of the URL, or you open another browser, or you delete your cookies, or one of the half dozen or so other tricks that means you'll never ever face the paywall. In effect, the NYT's paywall is a donation system made to look like a paywall -- sort of like some museums with their "recommended donations" at the entrance. You never actually have to pay, but many people do out of convenience.
• They don't count links/earned media:...
• http://www.techdirt.com/articles/20121226/03553321486/nyt-paywall-working-better-than-people-expected-that-doesnt-mean-its-working.shtml