Paywall statistics of the day, Times edition

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.


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