NYT’s Robinson: Metered Paywall Will Cost $13 Million Through Rest of 2011

Aside from the dismal picture on the New York Times (NYSE: NYT) Co.’s Q1 profit and revenue front, the other big news coming out of the company’s earnings report was that it attracted over 100,000 digital subscribers to the NYTimes.com and its related apps under the metered paywall.

Robinson said company expects to spend another $13 million on the project during post-Q1 2011, primarily on promotional costs. But that’s just part of the total, which remains undisclosed; we estimated earlier that it will be in the $25 million range. [Editor’s note: This is complicated by the way the money is accounted for within the company; unlike investments in technology, marketing and promotion expenses are not capital expenditures, which means different costs are part of different line items. Some of the additional spending in 2011 will be for technology but the bulk of the $13 million is for promotion.)

While the NYTCo won’t provide fuller cost numbers for operating the meter, as Staci D. Kramer observes, based only on 100,000 subscribers at lowest full price for the rest of the year, the company would break even and possibly come out ahead. CFO Jim Follo said that the costs in the quarter related to the paywall were not material.

As for the loss in traffic due to the meter and paywall, Robinson wouldn’t offer specifics there either, saying only that it was “within expectations.” At the same time, she added that the company anticipated meeting all its premium advertising targets, despite the loss in traffic. Later, digital head Martin Nisenholtz said the loss was better than “we had modeled.”

The flagship website and the mobile apps aren’t the only place the NYTCo is seeing subscriptions in action. The NYT saw 40 percent increase in subscriber growth on Kindle and Nook e-readers and devices since December; those subscribers will soon be able to get unlimited access to NYTImes.com. It’s worth pointing out that the Kindle subscription returned to higher prices after a break this past fall; e-reader subscriptions run about $20 a month.

Robinson also highlighted the growth of the NYT’s mobile usage and the importance of Facebook and Twitter. She pointed to 120 million pageviews from mobile wap sites and its apps during Q1, about 3 million followers across Twitter and 1.2 million “likes” on Facebook.

About turnaround plan: On the trouble at the About Group, Robinson said that it has been making significant investments in the guide site designed to balance out the downward traffic and cost-per-click revenue trends resulting from Google’s search algorithm changes. About is fighting those declines by adding 200 more guide sites for a total of 1,000. It’s also introducing a Spanish-language version to appeal to that growing demographic. And, it’s also doubling down on video and will be ramping up its presence on YouTube (NSDQ: GOOG).

During the Q&A, JP Morgan’s Alexia Quadrani asked about the cost of the “investments” in About. Martin Nisenholtz, SVP for digital operations, said that the expenses related to helping strengthen About would be “modest.”

Nisenholtz added that the 10 percent revenue decline wasn’t totally related to the Google changes. There was also a “mixed” climate for display in Q1, he added, resulting from the wider economic weakness amid global turmoil, such as the ongoing catastrophe in Japan and the upheaval in the Middle East. All of that has led advertisers to pull back a bit.

On whether there’s been a lot of users trying to work around the paywall, which limits non-subscribers to 20 articles a month, though articles through social media and some breaking news doesn’t count toward the meter. “We know a certain amount of people will try to circumvent the wall. It’s smaller than what we modeled for,” Nisenholtz said. “Besides, those people were probably never going to pay in the first place.”

Getting back to the issue of the impact on display advertising stemming from the paywall, Nisenholtz pointed to rate hikes over the course of the past few months on homepage and other premium inventory. The NYTimes.com doesn’t use ad networks, though it does rely on Google AdSense for some remnant inventory. “We can adjust that inventory as needed,” Nisenholtz said, again, arguing that the meter hasn’t had a material effect on those revenues.