Opinion

Felix Salmon

Paywall statistics of the day, Times edition

By Felix Salmon
June 8, 2011

This is a bit like a Wagner opera: no one just says anything any more. Instead, first you say what you’re going to say, then you say it, and then you say what you just said. First we saw it with Goldman Sachs, which planted a story in the WSJ talking about what it intended to say on its website, maybe, at some unspecified point in the future. And now the New York Times is taking a leaf out of the Squid’s book, leaking to Henry Blodget about what we’re all going to see when its circulation figures are announced: apparently there’s been an “uptick”, whatever that’s supposed to mean, in print subscriptions.

Blodget dashes madly to the conclusion that this proves the NYT paywall is working; I’ll reserve judgment on that front until we’ve seen a lot more data. Because the whole issue of paywalls and subscriptions is extremely prone to self-serving spin. Take, for instance, Richard Freudenstein, the CEO of News Corp’s digital operations in Australia. He’s seen the paywall numbers from The Times, in London, and likes them:

“After six months the Times had 79,000 digital subs and the number is growing every day, the rise in digital subscribers is more than off-setting declines in print circulation. That is the Times is actually growing its overall circulation numbers. They are making more money from their 79,000 digital subscribers than they did from the 20 million unique browsers they used to have.”

This doesn’t pass a simple smell test. Many if not most of the Times subscriptions are trials at just £1 for 30 days, but let’s be generous and say that all of them are paying the full £2 per week. That’s about $170 per subscriber per year, or $13.4 million in total.

Now if The Times was really getting less than $13.4 million a year from 20 million unique users, that would put its ARPU, or average revenue per user, at less than 67 cents. Per year. And this in a world where most publishers are aiming at ARPU of $10, less than $5 is bad, and anything less than $1 is almost unimaginably atrocious and a sign you’re not even trying.

Put it another way: while it’s true that subscription revenues per subscriber are always going to be higher than ad revenues per unique visitor, they’re not going to be 250 times higher — not if you’re only charging £2 per week. And if The Times is indeed still seeing its print subscription base decline, even after putting up a high paywall, I’m not yet convinced that the NYT version is going to have had a massive effect on NYT print subscriptions.

Comments
4 comments so far | RSS Comments RSS

“while it’s true that subscription revenues per subscriber are always going to be higher than ad revenues per unique visitor, they’re not going to be 250 times higher — not if you’re only charging £2 per week.”

Well, they could be, if you don’t know what you’re doing.

Those of us who are not print NYT subscribers (there’s an “I like my newspapers pink” joke in there somewhere) are now less likely to visit the main website. And some of us are getting irritated that the NYT believes that 5% of its monthly value is in a free (to them) blog post that links to another site.

Posted by klhoughton | Report as abusive
 

Oops. Link didn’t show (and is just an example): http://krugman.blogs.nytimes.com/2011/06  /08/four-heads-talking/

Posted by klhoughton | Report as abusive
 

The NYT is more complicated because the “New York” on their brand is a mere formality. They are probably more popular in Europa, Asia and Latin America than in places where the print edition is available.

Unfortunately, either Sulzberger didn´t note that or he doesn´t know how to make money with this public.

Posted by AndreKenji | Report as abusive
 

Oddly enough the paywall doesn’t trigger if one visits NYT through one of their RSS feeds. Insert comment about how considering links from the NYT’s own RSS feed as a link from an outside site seems a bit odd. Non-subscribers using RSS feeds are able to read specific NYT bloggers and columnists these users have selected and are interested in, without interference. Non-subscribers who use RSS feeds will not browse more of the NYT site, as they might if the paywall did not exist, resulting in lost ad revenue for the NYT. The accessibility to the NYT through the available RSS feeds would also seem to leave little motivation to actually subscribe to the NYT.

For instance:
http://krugman.blogs.nytimes.com/feed/

Posted by gabelr | Report as abusive
 

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