It’s been nearly a year and a half since the Boston Globe put a paywall in place and, so far, the results are underwhelming. The Globe, which is one of the last regional papers owned by the New York Times Company(s nyt), has notched up a total of 28,000 digital-only subscribers — in a metro area of 4 million people.
At first blush, the number is small but the Globe‘s publisher and a respected newspaper analyst see cause for optimism. Here’s a closer look at what the number represents for the Globe and the rest of the country’s newspapers.
[Update: Late Wednesday afternoon, the New York Times Company announced it is putting the Globe up for sale]
A new revenue stream
In October of 2011, the Boston Globe removed its more highbrow content from its general information portal, Boston.com. The paper began charging $3.99 for this content (feature stories, columnists and so on) while continuing to offer bread-and-butter city fare (Red Sox, car crashes, weather, etc) for free on Boston.com.
The strategy reflected a view that most people don’t want to pay for basic online news but that some might pay for a more high-fiber news product. As of last December, a total of 28,000 people have signed up — including some at a 99 cent promo rate — and this number is not growing fast. To put this in perspective, the New York Times has around 640,000 digital-only subscribers; yes, New York is a bigger city but it’s not 22 times bigger.
In a phone interview, Boston Globe publisher Christopher Mayer disagreed that 28,000 was a “small” figure and noted that the $3.99 subscription was just one of several digital products the Globe will be selling. Others will include a new tablet offering with a different pricing point.
“We’re not looking at having one digital product provide an alternative to one print product,” he said, adding that the strategy was based on tapping into the “brand promise” of the Boston Globe.
Ken Doctor, an analyst of newspaper economics, said by phone that the Globe’s 28,000 figure is actually good compared to other papers. He adds that it provides a new revenue stream while also permitting the Globe to justify significant increases in its home-delivery prices. Half of these home subscribers, who get free access to the website, have signed on, which suggests they may be primed to pay for digital-only in the future.
Doctor also said the company’s “tremendous penetration” with Boston.com is an under-used asset that can be a discovery vehicle for the Globe. And this may be where the paper is headed. As Poynter reports this week, the company intends to do more to “untangle” the Globe and Boston.com
A borrowed time strategy
In the larger picture, the Boston Globe is doing a passable job of playing a weak hand. Unlike the New York Times or the Wall Street Journal, the Globe can’t hope to pull in new digital subscribers from across the country or the world; its potential growth is limited to New England.
The Globe’s strategy to use its digital products as leverage to squeeze more revenue out of its home delivery service thus makes sense in the short term. But the paper simply won’t be able to maintain its 360 person newsroom much longer unless there is a sudden uptick in people under 30 buying home delivery subscriptions.
The Globe — and other papers like it across the country — must hit on a digital growth strategy soon if they are going to survive. One option may be partnering with premium international brands like the New York Times. For now, a young person in Boston who can only afford one digital subscription is likely, I suspect, to find more value in the Times over the Globe — but a bundled option that included Globe content could prove attractive. Mayer said the company has yet to explore such bundles.