Bloomberg reporting:
Ever since the New York Times
rolled out its so-called paywall in March 2011, a perennial dispute has
waged. Anxious publishers say they can’t afford to give away their
content for free, while the blogger set claim paywalls tend to turn off
readers accustomed to a free and open Web.
More than a year and a half later, it’s clear the New York Times’
paywall is not only valuable, it’s helped turn the paper’s subscription
dollars, which once might have been considered the equivalent of a
generous tithing, into a significant revenue-generating business. As of
this year, the company is expected to make more money from subscriptions
than from advertising — the first time that’s happened.
Digital subscriptions will generate $91 million this year, according to Douglas Arthur,
an analyst with Evercore Partners. The paywall, by his estimate, will
account for 12 percent of total subscription sales, which will top
$768.3 million this year. That’s $52.8 million more than
advertising. Those figures are for the Times newspaper and the International Herald Tribune, largely considered the European edition of the Times.
It’s a milestone that upends the traditional 80-20 ratio between
ads and circulation that publishers once considered a healthy mix and
that is now no longer tenable given the industrywide decline in
newsprint advertising. Annual ad dollars at the Times, for example, has
fallen for five straight years.
More importantly, subscription sales are rising faster than ad
dollars are falling. During the 12 months after the paywall was
implemented, the Times and the International Herald Tribune increased
circulation dollars 7.1 percent compared with the previous 12-month
period, while advertising fell 3.7 percent. Subscription sales more
than compensated for the ad losses, surpassing them by $19.2 million in
the first year they started charging readers online.
http://go.bloomberg.com/tech-blog/2012-12-20-the-new-york-times-paywall-is-working-better-than-anyone-had-guessed/
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