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Summary:

So how much money will the New York Times generate with its new digital subscriptions? The company has said that about 15 percent of monthly…

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So how much money will the New York Times generate with its new digital subscriptions? The company has said that about 15 percent of monthly visitors to its website are heavy users who access more than 20 pages a month — and therefore will soon be prompted to pay up. Some of those heavy users are already print subscribers who will be able to continue to access the site for free, but how many of the others the NYT is able to get to subscribe will determine just how much new revenue the company will be able to bring in. If you use TimesSelect, the paper’s last paywall initiative, as a basis for projecting revenue, the Times is looking at some very significant potential sales from its new plan.

*ComScore* says that in February, NYTimes.com attracted 31 million unique visitors in the U.S., where presumably the vast majority of these new digital subscribers will come from. Of those, the Times says about 15 percent are heavy users, which comes to 4.65 million people. The print edition has about one million paid subscribers (Circulation on Sunday, its largest day, is 1.35 million, of which 74 percent comes from subscriptions, according to the fall Audit Bureau of Circulation figures). If we assume that more than half of those are also heavy online readers, that leaves at least 4 million users the newspaper could potentially tap to sign up for online subscriptions.

We believe at least 500,000 people (or more than 10 percent of those heavy users) may be willing to pay up — and here’s how we get to that number. TimesSelect, the 2007 initiative that charged online-only readers $7.95 a month to access NYTimes‘ columnists and some original content attracted 227,000 paid subscribers, or about 1.17 percent of the 13 million people who were reading NYTimes.com at the time.

If that same percentage agrees to pay for the new digital subscriptions, that would amount to about 527,000 subscribers in the U.S. alone. The minimum price of $15 for NYTimes.com plus smartphone access would generate about $100 million in additional annual revenue for the newspaper. A blend of subscriptions would push sales higher. And, the number of subscribers could be significantly greater, as well, considering that a higher percentage of people might be willing to pay for all of the Times‘ digital content than for just a piece of it — even though the price is higher too.

  1. Narrow maths. When the Times (London) did similar it immediately lost 90% of it traffic . This seems similar to other attempts. OK it makes cash but loses mindshare.
    The entire new economy is based on breadth of knowledge and the Grey Lady in her august wisdom is going the other way. If they hadn’t so seriously overvalued themselves – $5 or 10 would have kept a lot of their readers now with other Times they are retiring to more limited relevance. Lets hope the third Times find a smarter price when they follow the rout.

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    1. Staci D. Kramer Friday, March 18, 2011

      This is very different from the Times (London). It’s not a full wall and
      even after limits are reached there are ways to keep reading, which should
      help in terms of relevance and overall retention.

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  2. So if 1% of readers were willing to pay $8 a month in 2007, at the height of the economy, 1% will be willing to pay $15 during the recession? What brilliant “economics”….

    And never mind that the Times reads more like the Enquirer these days, with articles about what plants feel and what baby talk means, and contains science and business articles written by journalism majors who never took a science or business class. But there are blogs, and blogs, and blogs full of uniformed, uneducated opinions….

    Where does one sign up to pay $200 a year for this nonsense, and how will their online advertisers feel about a >99% drop in readership?

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  3. ALJAZEERA

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  4. Joseph Tartakoff Friday, March 18, 2011

    @ Gary. Yes, possibly — and they’re not paying for the same thing, by the way. It will be exciting to watch what happens.

    – Joe Tartakoff, paidContent

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  5. Greg Golebiewski Friday, March 18, 2011

    It is so funny to see editors of paidContent go bananas about paid walls and it seems… defending NYT decision. As far I remember, and I am a reader of pC since 2008 I guess, you were mostly dismissive of any form of paid content. What happened? Is it b/c of NYT. The Economist, The News Corp were not reputable enough…

    Now I am just waiting for Andrew Roberts to say something positive about paid content (the concept, not the newsletter)

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    1. Staci D. Kramer Friday, March 18, 2011

      Greg, we’ve never been dismissive of the concept of paid content but we’re
      not afraid to say variations on the theme don’t work. If you equate not
      being a cheerleader with being dismissive, so be it. By the way, it’s Robert
      Andrews.

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  6. Greg Golebiewski Friday, March 18, 2011

    My apologies to Robert Andrews.

    Yes Staci, I know, I got a similar answer from Rafat when I confronted him with a few facts. Still, if one analyzes your coverage and its language, it is rather clear that you have been reporting “negatively” about content monetization solutions other than advertising or not reporting about them at all.

    If your name were “ad-supportedContnet.org” and your stated mission, to promote advertising as the only way to monetize digital content, I would not have an issue with your coverage.

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  7. The plan needs to be looked at as a transition plan. The important question is: How many people do they need to sign up for this “newspaper” company to survive long term?

    Assume 50% of the fee goes to paying for online circ marketing, at the “middle option” $20/4 weeks the company keeps $180/year…if they get 2 million subscribers (or ~7% of their monthly uniques or 200% of the people who now pay the higher print price), the company has $360Million per year to pay for editorial and profit (before advertising).

    It may not happen overnight, but anyone who thinks this is impossible for them is smoking some special kind of Google Ganja.

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