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Summary:

Hitwise data shows the New York Times has seen traffic fall by 5 to 15 percent a day since it put up a pay wall. That may not seem like much, but it’s a significant drop, and it reinforces the risks in such a strategy.

Sm Change in Total Pages NYTimes 04-09-2011

We’re still in the early days of the New York Times paywall, but traffic-measurement firm Hitwise already has some numbers on how the subscription plan has affected the newspaper’s readership. The bottom line? The Times has seen a drop of between 5 and 15 percent in daily readers. That may not seem like much — especially compared with the falloff at some other papers that have implemented more restrictive paywalls — but 15 percent is still a fairly significant decline. And there are signs in the Hitwise data that the NYT may not have fine-tuned its wall as well as it might have hoped, which could have an impact on the long-term health of the subscription strategy.

Hitwise compared the 12 days before the paywall went into effect on March 28th with the 12 days after that occurred, and found a decline in daily visits of between 5 and 15 percent (with one exception on a Saturday, when visits actually were up).

Looking at the total pageviews for the 12-day period as a whole, meanwhile — as opposed to individual visitors — the traffic-measurement company’s analysis showed that pageviews fell by an even larger amount: between 11 percent and 30 percent.

These numbers are interesting in a couple of ways: on the one hand, the New York Times said that it did exhaustive research of its online readership in the year or so it was working on the paywall plan, and that it expected the majority of readers would never hit the wall, since most non-subscribers didn’t read more than 20 articles a month. And yet as many as 15 percent — which would work out to about six million visitors a month, based on the NYT’s estimated overall traffic — are no longer coming to the site, possibly because even the threat of hitting a paywall is enough to deter them.

Obviously the newspaper is hoping that a significant number of those readers will sign up for the subscription plan. But will they? Or are they simply going elsewhere?

The other important element in the numbers is that pageviews dropped sharply, and much more than individual visits, which suggests that visitors are reading fewer articles. Again, while it’s still early, this seems to indicate that readers aren’t sticking around as long or reading as much — perhaps because they are afraid of using up some of their 20 free articles per month. That’s important because “engagement,” or time spent on the site and repeat visits, is a key metric that advertisers look at.

One other interesting data point from the Hitwise analysis: although the New York Times paywall includes a “social media exemption” for links that come from Twitter and Facebook, the traffic-measurement firm said that there was no noticeable increase in traffic from social networks in the two weeks following the paywall launch.

So is the Times paywall a success or a failure? It’s impossible to say based on such limited data, but the traffic drop and pageview declines that Hitwise has pointed out reinforce the bet that the NYT is making: in a nutshell, it is betting that throwing a wall up in the face of non-subscribers will pay off in the long run — not just in terms of subscriptions from those who want to read more than 20 articles a month, but in the form of higher advertising rates paid by brands who want to reach those paying (and therefore theoretically more valuable) customers.

As we’ve pointed out before, one of the goals of paywalls is also to keep readers in, not just to keep freeloaders out: by charging for access to the website, newspapers can protect some of their lucrative print subscribers — who help attract the advertising that makes up the majority of print revenue — by keeping them from cancelling their newspaper delivery and reading everything for free online.

In either case, we won’t really know for some time (if ever) whether those bets are winning or not. And the risk for the NYT is that even if it wins on those fronts, it is still sending a message to many of its readers saying “Go away, we don’t want you.”

  1. Important factor — you can get to the Times site without hitting the paywall through an off-site link. But once on nytimes.com, the paywall applies. Leading to an awkward effect. If Krugman (for example) points to a NYT piece as background, you won’t get there, but if he points to a Washington Post piece, you will.

    That may be why the visits are shorter.

    http://scripting.com/stories/2011/04/04/nytPaywallOnApril4.html

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    1. Yes, that occurred to me too, Dave. I think that could be responsible for the decline in pageviews — readers may be afraid of racking up their pageview “bill,” so to speak, and so spend less time clicking through to other stories. Thanks for the comment.

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    2. And I also think it affects part 1, part 2 scenarios. When the Times deems an article worthy of being a page hit whore, you may or may not see the second (or other) part. Sweet, huh? Me? I’ve instituted my own wall. See a NY Times link and just do not go for the bait.

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      1. Agreed with Yacko. What happens if I click on an NYT link? At the moment, I’m not sure and that unpredictability imposes relatively high cost on users.

        I know the NYT thinks I’m going to resolve that problem by paying, but its much simpler and cheaper to just avoid almost all NYT links. If they’ve got some scoop that isn’t available anywhere else, fine, I’ll chance it, but otherwise I’ll just google and find a similar story from a website where I don’t have to worry about whether I’m past some 20 page view daily limit, etc.

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  2. Pay walls are fine for vertical publishers who want to limit their circulation to those who are actually in their marketplaces. But newspapers are defined by their reach, and even in the print era the cover price of a paper only covered the cost of getting it to you — not the printing or the editorial effort. Those came from advertising.

    Publishers who want reach as well as quality need to fine-tune their free registration systems so they let in only high-value readers and then have pay walls for wasted circulation.

    Otherwise, as in this case, you’re cutting off your nose to spite your face, as my mom says.

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    1. That’s the hard part, Dana — trying to weed out the “wasted circulation” but still keep the higher value readers. I’m not convinced that anyone has figured out how to do that, although the Economist and WSJ have come close — but they are much more targeted in their focus than the New York Times is. Thanks for the comment.

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  3. The jury is still out as to the ultimate effect on traffic to The New York Times web site, but what is certain is that their implementation of the paywall is a case study in worst practices… http://www.profitperspectives.com/2011/03/new-york-times-paywall-conundrum.html

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  4. Typical “bricks and mortar” business jumping into the virtual void. What is not typical is that it is NYT! Talk about a critical mistake? This is like Classic Coke! Deja Vu all over again.

    Traffic will continue to drop. Include me.

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  5. I try not to click NYT artlicles now, because I want to “save my views” for articles I think may be more important later on. If they had a article counter and date cycle, I could have an idea of how to meter out my story views. As it is now, clicking on an NYT article is a considered and oft-abandoned act.

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    1. Thanks for the comment, George — I think that it is the same kind of mental arithmetic that many people go through, and at the end of the day they may simply decide to go elsewhere. That is a very real cost for the Times and anyone else planning a similar paywall.

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    2. Use Screengrab plugin in Firefox to save the page as a jpeg or use iCab to save page as pdf. Yes, the entire page, including the portion off screen, as one long image. Or on a Mac, print, choose “Save as PDF” and you get a multipage pdf chopped somewhat randomly into pages. Or use a separate app to load and save page. The Times won’t be happy, but you can read them later without problems.

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  6. I read the NYT lead stories every morning on my iphone and was relieved that the lead news stories are still available at no cost. They didn’t make this clear in their marketing of the pay wall; I assumed that I’d only be able to read 20 stories over a month. I’m sure other readers are unclear about this as well.

    I’m not reading the letters to the Editors, columns or NYT Magazine features, which — if I am average — may account for the drop in total time spent in the newspaper by all readers online.

    T’were it me, I wager that people that like the feel of newsprint will always pay for a physical copy. And that people in the local market [per Dana Blankenhorn's comment about wasted circulation] will want a print or online subscription for the totality of the advertising and editorial. But I’d also wager that there are a pile of readers like me [in Florida] that would pay for complete online access to the editorial side of things; I’d drop the price and sell the heck out of it nationwide.

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  7. “…paywall working, keeping people out”

    wry sense of humor!

    must be why i continue to read your stuff and occasionally catch the national on cbc (something those of us in the states might not easily be able to do).

    you and rex murphy should team!

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    1. Thanks, Steve — I am open to any offers from Mr. Murphy or his representatives :-)

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  8. I am somewhat ambivalent about the Pay wall.

    Even as a student I couldn’t use NYT as a source so it became pretty insignificant in terms of research.

    Now as a Marketer it still only helps me occasionally, and even then I have to fact check through research firms anyways.

    And for General news I typically go to Huffington Post or Daily News for the NYC nitty gritty.

    Most people won’t miss the Times at all, and I don’t really see the increased revenue they will get just banking on a small number of Wall Street execs paying for a subscription.

    Honestly the Op-Ed quality in NYT hasn’t been that great in the last couple of years. Definitely not worth paying for, simply based on the principle and functionality.

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  9. The New York Times is telling “readers go away we don’t want you.”
    What a stupid statement. Is GigaOm Pro telling readers to go away? Or that they should pay for quality content? Is author Stephen King telling readers to go away? Or pay for the book they are about to read? Ridiculous.

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    1. Brian, the New York Times isn’t telling people that they should pay for quality content — it’s telling them that they should pay for everything the NYT publishes, some of which is excellent and valuable and some of which is not. There’s a big difference. Thanks for the comment though.

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  10. newsjunkie247 Tuesday, April 12, 2011

    I this is all about psychology to a degree that I don’t think has come up in in any coverage so far. To preface, I could get the online edition for free because my mother has an International Herald Tribune subscription. But I’ve found that it’s so easy for me to circumvent the paywall in a second, that I don’t even have to bother to do that. I read a lot of NYT articles through RSS, that’s a link. Even when I’m on the NYT page, it has become clear to me that if right-click on any article that I want to read, copy it in my browser and delete the everything past the /, the paywall disappears. But most people are just not teach savvy enough to think of that, even though it’s so simple. When I mention this to fairly intelligent people, they are interested and say something like oh yeah, but I don’t think they truly get it. So I think in that sense the NYT strategy is working. People think the wall is much more stringent than it really is. Yes, it is keeping some people away but some portion of users are probably paying either because they are not techsavvy enough to see the easy way around it or because they want to. I think the NYT engineers are aware that this workaround exists because they could have made it much harder. It is harder to circumvent limits on on megavideo than it is to circumvent the NYT paywall. It would be interesting to do an article/interview with users/readers with different technological knowledge and demonstrate how much of this is about psychology and what their reaction is when one shows them how easy it is to circumvent.

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