Tag Archives: the new york times

The New York Times knows how to make the best of a bad situation

The New York Times is struggling with revenue right now in the face its transition to an online focused business model. In the first quarter of 2013, net income was $3.1 million, down from $42.1 million in the period a year earlier. Total advertising revenue declined 11.2 percent over last quarter.

Realizing the trouble it faces in the print and online advertising model, The New York Times has shifted its focus to its online business model, specifically to push digital subscriptions. Circulation revenue grew by 6.5 percent as it continues to creates more enticing and competitive subscription rates for its website. 

In order to continue on this growing revenue source, new and varying subscription rates are to be introduced that target specific audiences. People will now be able to subscribe to cheap alternative plans that allow them to only read specific parts of the website. This is so that readers that only care about the politics section or the arts section, for example, will now only have to pay a minimal fee to read just those articles. For the most dedicated readers, premium subscription plans will be made available that allow limitless access to all articles including attending actual Times events. 

I am really impressed by The Times’ ambition to drive its digital circulation and revenue. They see an opportunity to grow their circulation numbers, which in turn will eventually pay off and drive up traditional advertising revenue as more people come to using the site on a daily basis.

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The future of paywalls

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In my last post I explored different ideas as to implementing a paywall on a local or hyperlocal news site. Today I want to further my analysis on paywalls by talking about what the future may hold for larger newspapers that want to use paywalls in the years to come.

In a blog post by Felix Salmon on Reuters, he examines the current business practices of sites like The New York Times and Financial Times, and how their use of the “metered” paywall model on both sites. According to consulting agency Mather Electronics and paywall provider MediaPass, metered paywall’s are not exactly the best option for all newspaper sites.

When you think of a traditional paywall you likely think of the NYT paywall model of allowing you to view a certain amount of articles before you are locked out of viewing anymore. In the case of the NYT, after 20 article views in a month you are required to become a paying subscriber in order to view more. The problem with this lies in the fact that what if only five of the 20 articles you read were actually entertaining, and the last one you read did not convince you that you needed a subscription to the site.

A different approach would be to lift the article limit, instead using a model that will only lock out specific articles that would be highly appealing to many people, making them want to pay to read it. Ideally this works best for sports news, as Salmon points out in his article, because people are more willing to pay to read appealing sports news instead of entertainment-style news.

Mathers and MediaPass also note that news sites need to treat each reader different. Some people will never pay a cent of money to read online news, those same people should not be barred from reading content behind a paywall because that is also stopping them from seeing ads on the site. People who analytically are shown to be potential paying subscribers should be shown different subscription options to choose from.

When it comes to said subscription models an emphasis should be placed on the lower revenue options. Why? lower revenue is typically made with longer, usually annual, subscription rates. Though the newspapers will make less money monthly, they are essentially locking readers into paying for the long-term, rather than risking losing them after a month or two.

I for one think paywalls are the future for all online newspapers. Ads will still be substantial in online revenue, but if done correctly I think paywalls will be the end-all-be-all for online news. I am one to speak, since I am currently a proud paying customer of two paywall news sites The New York Times and Giant Bomb.

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It’s Time To Pay Up! (or Donate instead)

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The biggest priority of any local news site is most likely driving revenue in order to stay in business. Many local news sites run solely on ad revenue through banner ads. Cluttering up their pages with sometimes distracting advertisements might bring in the money they need to stay afloat, but is this the best way to keep local news sites around in the future?

The New York Times has shown that a paywall model is more beneficial then ever, and are trying their best to close loopholes around this method. Forcing their readers to pay in order to read their content is a way to not only drive revenue, but also reduce the amount of annoying ads. This in turn also drives up newspaper circulation, making the ads that do appear on the site more and more appealing to advertisers.

But how does the business model of a paywall apply to a local or hyperlocal news site? Their readership is often a fraction of big sites like The New York Times, so how do they justify such a   move? I would like to think of a paywall on a local news site instead as a “donor wall.” Most smaller independent news sites probably can’t afford to lock out a large portion of their content to their readers. The reason is because they would likely lose their readership as people move over to another, just as credible, local news site for free. By making the paywall more like a donation, local news sites can provide extra content to their readers without sacrificing existing stories and content.

Think of it this way: what if instead of paying $5 a month for the privilege of a no article limit, you instead pay a one time donation of $50. This donation would include benefits such as exclusive reader interaction with the news company in the form of exclusive online Q&A’s and chats, significantly less ads visible on the site and heck, even a t-shirt for good measure.

In an ever-changing landscape for online news, especially for local and hyperlocal news outlets, there has never been a better time to start thinking outside of the box about potential ways to drive revenue online.

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