How is the New York Times doing with the new digital paywall it put up last March? We found out a few details today when the New York Times announced second quarter earnings. All together, the New York Times counts a total of 1.1 million digital subscribers, but only 281,000 of those are currently paying (756,000 are existing print subscribers who get digital access with their existing subscriptions, and another 100,000 are courtesy of a Ford Lincoln promotion).
As a result, overall circulation revenues at the company are now treading water, which is an improvement from the declining revenues last quarter. Circulation revenues were $235 million, up exactly 0 percent, stemming the previous decline. Advertising revenues, however, were down 4 percent, for an overall revenue decline of 2.2 percent. If you break out only the New York Times Media group and ignore the other regional papers the company owns, circulation revenues actually rose 1.6 percent. So at least the new digital paywall strategy is allowing the company to tread water instead of keep sinking.
I’ve argued before that the pricing structure of the paywall is not designed to attract digital natives so much as it is to keep print subscribers. And, in fact, that is what it seems to be doing. Print subscribers are worth a lot more to the New York Times than digita ones anyway (at least for now). I’ve seen first-hand how well this strategy is working. My wife, who reads the New York Times every day on her computer, got so frustrated by the paywall that she ordered a weekend print subscription just to get the digital access (it was cheaper than paying for a digital-only subscription thanks to a promotional offer). On Sundays, I will even pick up the paper edition.
The real question, though, is whether the paywall strategy can pick up steam and increase overall circulation revenues.
Photo credit: Joost J Bakker
“The New York Times Company, a leading media company with 2007 revenues of $3.2 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers, WQXR-FM and more than 50 Web sites, including NYTimes.com, Boston.com and About.com. The Company’s core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.” (Source: New York Times)