The New York Times Paywall Is Working Better Than Anyone Had Guessed

http://go.bloomberg.com/tech-blog/2012-12-20-the-new-york-times-paywall-is-working-better-than-anyone-had-guessed/

by lucaspiller • 14 years ago

189 106 14 years ago

go.bloomberg.com

tyrelb• 14 years ago

because the content is good and original - not like most of the other dailies / content farms out there... as a subscriber - love it!

carbon8• 14 years ago

Regarding what any of this means for other content paywalls, note this section from Post Industrial Journalism: Adapting to the Present (http://towcenter.org/research/post-industrial-journalism/):

"Finally, a note about why we will not be concentrating very much on the fate of the New York Times. A remarkable amount of what has been written about the fortunes of American journalism over the past decade has centered on the question of what will happen to the Times. We believe this focus has been distracting.

"In the last generation, the Times has gone from being a great daily paper, in competition with several other such papers, to being a cultural institution of unique and global importance, even as those papers—the Washington Post, Chicago Tribune, Los Angeles Times, Miami Herald, among others—have shrunk their coverage and their ambitions. This puts the Times in a category of one. Any sentence that begins “Let’s take the New York Times as an example ...” is thus liable to explain or describe little about the rest of the landscape.

"The Times newsroom is a source of much interesting experimentation—data visualizations, novel partnerships, integration of blogs—and we have talked to many of our friends and colleagues there in an effort to learn from their experiences and make recommendations for other news organizations. However, because the Times is in a category of one, the choices its management can make, and the outcomes of those choices, are not illustrative or predictive for most other news organizations, large or small, old or new. We will therefore spend comparatively little time discussing its fate. While the Times serves as an inspiration for news organizations everywhere, it is less useful as a model or bellwether for other institutions."

jusben1369• 14 years ago

I think that's a really valid point and fair observation but perhaps too simplified. Put another way, had the Times failed at creating a successful paywall then all others could be assumed to be doomed to failure. Now that the Times has proven it's successful, can others borrow some or all of their approach? The answer is partially in your quote above I suspect. Just whacking up a paywall is likely not the answer. However, using your deep resources (relative to other sites and bloggers) to create a superior experience can create a sustainable business. Just as the Internet threatened their traditional business it also dramatically increased their reach in other ways.

AnthonyMouse• 14 years ago

I think people are doing it a disservice by calling it a paywall. There is no wall. Bypassing it is trivial. What it is is an effective donation drive the likes of Wikipedia: You go to the site, you get the content for free, and you get a notice that says "hey, somebody has got to pay for this stuff you're reading, how 'bout you pay your share?"

An actual paywall would be a lot less likely to work, because when people get to a paywall, they can't see what they're supposed to be buying, so they just go away and never come back. By contrast, this "works" because it gives people what they want unconditionally and then having accepted it without paying, guilts them into making a donation. Nonprofits have been running on this model forever.

But the real question is whether it's actually "working" -- the conversion rate to paid subscribers is evidently around 2%. That's pretty bad. And then they call it a success because it makes up 50% of their revenue instead of 20% as was traditionally true, but is that because subscriptions are up or because print advertising has been falling for so long? They only quote the most recent rate of change rather than the long-term numbers, and there may be one of these going on: [http://xkcd.com/605/]. When you first open a new revenue model, you can pretty well expect the first couple of years to have a higher growth rate than the ensuing years. Once everyone is subscribed who wants to subscribe, you have a hard time achieving any more subscription growth. And if subscriptions stop growing faster than advertising is falling, they're right back into the death spiral of cutting costs to save money which reduces readership which loses revenue which induces cost cutting.

wangchong87• 14 years ago

You're absolutely right, and it is related to the way in which disruptive innovation works.

Currently, the New York Times is to the news world what mainframe computers were to the computer world. People still pay money for mainframe computers, but only the people at the very top end of the market, given that a mainframe computer is feature rich and expensive.

Similarly, NYT is the most feature rich, extensive and wealthy masthead in the entire news world. People will continue paying for it in the same way that people pay for mainframe computers, but this doesn't mean they haven't been disrupted. The market for other news is far, far bigger and in the coming years will make NYT look like a drop in a vast ocean.

venomsnake2• 14 years ago

The fun part is that the paywall is extremely porous. There has never been a case that I could not access a nytimes content because of the paywall. Sadly their pricing is above what I would consider good value for money so I am not a converted subscriber yet.

I am glad that this is working model/experiment. To not alienate much of the eyeballs while putting effort to make the paying subscribers experience better.

bencpeters3• 14 years ago

Agreed with this - all it checks is whether you've redirected from a NYTimes page to get to the article you're trying to get to, so it's very easy to spoof...

But I believe that NYT reporters are providing a pretty important public service, especially in this day and age of many "journalists" not taking the time to do more than parrot official talking points. Not saying the Times never does this, but they do have some of the better reporting in the industry in my experience.

meej3• 14 years ago

To this day I am still surprised at how easy it is to circumvent the paywall. I find it a bit insulting to my intelligence, to be honest.

stdbrouw2• 14 years ago

When I step past a public lawn and it has a sign up saying "please don't step on the grass" my first thought is not "gee, this is an insult to my intelligence, they could have at least put up a fence."

The NYT paywall is meant to be a deterrent or an annoyance, not an iron curtain.

Felix Salmon from Reuters wrote a good piece about the psychology of it all a while back: http://www.wired.com/business/2011/08/new-york-times-paywall...

danking002• 14 years ago

So, I subscribed for a couple years, but cancelled six months ago when I left the country for a sojourn in Europe. I am returning to the States next week and I fully intend to re-subscribe to the Times.

I'm curious what price you would be willing to pay for access to all of the Times content.

Personally, I find that 15 USD a month is a fair price for an abundance of news that seems high quality (perhaps I've been duped?). There's all the multimedia, the arts section, the magazine, and, of course the news (both world and US).

Do you not enjoy as many sections as I do? Or do you share my interests but find 15 USD too steep a price for the content?

I also wonder, does means affect your choice? I recognize that the value of money is sometimes inversely related to how much you have.

DanBC2• 14 years ago

I'm not interested in reading all of that the Times.

$15 per month is too much for a bunch of content that I'm mostly not interested in.

In theory I'm paying £200 per year for Wall Street Journal; £270 for Financial Times (standard, not premium); £117 for the Economist - well, these three are nearly $1,000 per year. Add in a UK daily paper (because that's where I live); and Private Eye, and something like Monocle and the costs are easily over $1,000 per year.

So, I gently write to newspapers and ask them to include tipjars on articles (so they know how much people actually value good writing); and I leave ads turned on but ask for single-article payment systems to allow me to view ad-free articles; and I hope that something gets done to implement micro-payments because it'd be awesome.

PS: Why are newspaper websites so awful?

(http://www.independent.co.uk/)

(http://www.telegraph.co.uk/)

EDIT: Here's my complaints screenshoted.

(http://imgur.com/a/V00kO)

venomsnake2• 14 years ago

My price point is somewhat close to 4-5 USD per month. Since the only things that are really irreplaceable there for me are the Krugman, Collins and Dowd columns. For other stuff there are more tightly focused news outlets that serve my needs better.

Also I have never been fan of the subscription model when it is about consuming content and not providing service.

daenz• 14 years ago

There was a recent NY Times story I took a look at. I didn't read it, only scrolled through it, but I was impressed at how immersive the experience was. It had full screen animated backgrounds that scrolled in, with beautiful white titles overlaying. It reminded me vaguely of a graphic novel, I wish I could find it again. It was something about mountains and snow, possibly some kind of rescue story.

rch• 14 years ago

This is the one you want: http://www.nytimes.com/projects/2012/snow-fall/#/?part=tunne...

Groxx• 14 years ago

That is an extremely shiny article, but I dare say it actually pulls it off quite well. Thanks for the link!

bencpeters3• 14 years ago

http://www.nytimes.com/projects/2012/snow-fall/ VERY detailed and well-written article about the Stevens Pass avalanche last February.

Agreed 100% though - amazing presentation. Just the right amount (and format) of multimedia in a way that added to the story without being overly flashy/showy.

waterlesscloud• 14 years ago

I wonder how often even the NYT can produce stories like that. They have to be pretty expensive to put together.

ww520• 14 years ago

Times might be attempting to build durable online content from time to time instead of the daily news stories that fade away quickly. Interesting durable online articles can last a long time on the web and will generate a lot more eyeballs down the road. One advantage the online media has that the paper media cannot replicate easily.

They can afford to put in a bit more expense in building an impressive article.

rubyrescue2• 14 years ago

What's remarkable is the solution to the paywall is "cmd-L, cmd-C, cmd-shift-N, cmd-V, enter". This will get you through the paywall 100% of the time. Replace cmd with ctrl on a PC. I want a T-shirt that says this. I've tried to teach some less-tech-literate friends but they just can't remember the commands. They don't understand that just pasting the link into incognito mode in chrome or firefox will give them the content, so they pay.

MichaelApproved3• 14 years ago

What's wrong with paying for a service you like using? It sounds like you're upset that they aren't trying hard enough to steal content.

dhimes2• 14 years ago

I agree, Michael. The best way to solve the privacy issues we face is to show businesses we'll pay for services or content we like. We may be picky, but we'll pay.

Disclaimer, but hopefully not a disqualifying one: I'll be launching a paid subscription service next fall.

rubyrescue2• 14 years ago

i have no problem paying. i have no problem that they pay. i am struck by how low the barrier is to not having to pay, but it still might as well be a 40 foot wall to the technically illiterate. my attitude is more one of marveling at how different non-technical and technical folks look at the world.

gizmo• 14 years ago

Or simply by disabling cookies for the nytimes.com domain. And the fact that the paywall can be circumvented so easily is most definitely a feature -- it's brilliant customer segmentation

(edit: Because it allows students and tech-literate people to get to the content for free. So NYTimes content will do very well on social media sites, which in turn keeps the NYTimes relevant for younger people. Who will get a subscription when they graduate and become professionals.)

downandout2• 14 years ago

The paywall is extremely simple to bypass using Google as the referrer (just Google site:article URL and click over from it). They do the Google thing to avoid a potential cloaking penalty which would get them de-indexed altogether.

So the interesting part of all of this is that people choose not to bypass it and pay. The reminder that they need to pay alone seems to be working.

dmix• 14 years ago

Or if you're in chrome, just use "Edit this Cookie" and blacklist NYTimes from saving cookies.

downandout2• 14 years ago

Yeah, I'm in Chrome, but have never taken the time to block their cookies. The Google thing takes 2 seconds, and I rarely spend time on the site, or I would.

ngoel36• 14 years ago

Wall Street Journal does the same. My guess is that it's intentional - they don't want to necessarily block you from reason their content, just convince those who can to pay.

fpgeek• 14 years ago

The WSJ seems to be more targeted with their paywall than other papers. Some articles are still behind the wall even with the "Google trick":

http://searchengineland.com/wsj-pulls-back-on-what-google-se...

thefreeman2• 14 years ago

It's intentional, but not because of that. In order to be indexed, they have to show the content to google. It is against googles TOS to show them content and not display it to visitors referred by their index.

joshdick• 14 years ago

Or you know, maybe many readers of the Times want to support the great journalism that the paper produces, since they realize that without their subscriptions, the paper could not exist in its current form.

jeremyarussell• 14 years ago

That's crazy talk, like all the people that pay over a dollar in the humble bundles or actually go out and buy the music they tried out via illegal download. Just crazy talk.

untog• 14 years ago

I think (and I have no professional knowledge) the pay wall is more about establishing the concept that the content is worth money. If you don't want to pay for it then you'll find ways around whatever NYT implements- it's not worth the effort.

As long as you establish that the content is worth money, a lot of people are more than happy to pay for it.

alexqgb• 14 years ago

Exactly. Even if you're honoring the rule in the breach, you're still honoring it. An that, by itself, represents a major win for the NYT.

As time goes by and the unsustainability and injustice of the "all content should be free" mantra becomes widely recognized, a much clearer line between contet that is and is not worth paying for will crystallize—and with it, the social attitudes that work with or against payment for publishers, depending on the surrounding expectations.

The Times has done a solid job of positioning itself. Pity those that lack the resources an foresight to do the same.

devb• 14 years ago

There's also a simple way to modify the URL once the paywall kicks in after you've viewed the total number of free articles for the month. Despite the workarounds, I'm still one of the people that pays for the content.

btipling• 14 years ago

Or just use an incognito window. Much easier.

knowaveragejoe2• 14 years ago

I work for a niche newspaper that also employs a paywall - in short, it works great for us. Used correctly, the concept works well for anyone who produces compelling content rather than simply regurgitating the content of others.

Looking forward, Google's attempt at replacing paywalls seems compelling and definitely a step in the right direction(I'd like to give away all of our content for free), but it needs to be refined. There is no guarantee the surveys will deliver accurate results.

kragen• 14 years ago

Are you doing the same kind of thing the NYT is — 10 articles a month free, or unlimited if you're referred by a popular site? Or do you have a different strategy?

malachismith3• 14 years ago

Wait.... this article makes no sense. So subscription revenues are going up, and subscription revenue as a percentage of total revenue is going up. That's great. But why is this an indication of success of the paywall? Seriously...

kgermino2• 14 years ago

I don't understand your confusion. The only legit way around the pay wall (the pay) is to subscribe to the Times. Since the pay wall more people are subscribing to the online and dead tree versions of the paper. These extra subscribers pay money, which is more revenue for the Times.

Paywall limits access to people who pay (subscribers) => more people pay => Times gets more revenue. What's not to understand?

malachismith3• 14 years ago

You can make a (stretch) claim at correlation just like you did, sure. But correlation (stretch or otherwise) is not the same as causation.

kibwen• 14 years ago

While the porous nature of the paywall makes it pretty brilliant, I'm having a hard time actually hitting it at all.

See if you can reproduce this. Go to nytimes.com and just start clicking on different stories. After about 10 I got a little popup saying "This is your last free article of the month", but the next few articles still displayed with no problem, with the exception of a single full-page click-through ad at one point. Have clicked on about 50 articles now with no impediment. Pretty curious. Does it only count clicks coming from external sources? If so, why does it tell me that I'm on my "last free article" after clicking around for a bit?

Running Firefox on Linux, with no funny business except Ghostery, which I have configured to let ads through.

codewright• 14 years ago

> I'm having a hard time actually hitting it at all.

> Ghostery

So I take it you don't know what Ghostery does? That's why you're not bumping into it.

jamesbritt• 14 years ago

I use Ghostery and still hit the paywall. I don't recall ever setting anything regarding any nyt domain.

mjcohenw• 14 years ago

I'm one of the happy subscribers. I prefer the mobile site, even on a Mac, because I find it easier to read and navigate.

On my Nexus 7, I use Firefox instead of Chrome because (1) I can use stylize to make it white text on black background, and (2) it has a built-in reader that makes the articles easy to read.

rdl• 14 years ago

How has it worked for WSJ?

austenallred3• 14 years ago

This article, and many other similar to it, completely miss the point. (Or perhaps, beg the question we are all waiting for an answer to).

I don't know if anyone ever debated the notion that paywalls will produce revenue, and it's great that the NYT earns more from its paywall than many industry analysts expected.

But the fact is, even at the revenue levels that it may produce in upcoming years, it still costs more to produce that content than people are willing to pay for it. This is the big hold-up with journalism. Even if people will spend a billion dollars a year purchasing your newspaper, if it costs you two billion dollars to produce it you're screwed.

personlurking• 14 years ago

Not to take the focus off of your point, but the phrase "beg the question" caught my eye due to reading about it recently. I recommend the section below. Cheers

http://en.wikipedia.org/wiki/Begging_the_question#Modern_usa...

joe_the_user• 14 years ago

The thing is that "begs the question" has such nice ring to it even when used incorrectly.

I'd say most people mean "the question remains..", "...fails to answer the initial question" or "...leaves the question X unanswered" when they say "...begs the question". Unfortunately, none of these more correct phrase have the same flourish. What to do...

austenallred3• 14 years ago

Aw, man. I wonder how often I've said that incorrectly. Thank you!

saurik3• 14 years ago

The NYT has existed for a sufficiently long enough time that they could not possibly have been losing money. Now, their revenue from subscriptions is apparently going up after than their revenue from advertisements is falling. Shouldn't that indicate that they are still cash flow positive? Alternatively, are you saying their costs are going up dramatically to compensate for this increase in revenue, and that, in fact, they are now losing money and will soon die?

thefreeman2• 14 years ago

> The NYT has existed for a sufficiently long enough time that they could not possibly have been losing money.

What?

nhebb• 14 years ago

Attention is being paid to this story in the news world because the NYT has a model to sustain their business. With recent announcements that Newsweek is going out of print and the publishing arm of News Corp lost $2B in the last year, the industry outlook is still bleak. Although the paywall success is good news in the short run, the NYT is not growing. They recently announced more staff cuts, their 2-yr EPS outlook is flat, and they have $0.7B in debt on a $1.2B market cap.

thisismyname• 14 years ago

Goes to show that content is king and people will pay for content they want or think they need.

ianstallings• 14 years ago

They should consider that charity considering how much of a joke it is to get around. I know that sounds a little snide but as a programmer I cringe at it.

Benferhat2• 14 years ago

You have to take into account the enormous amount of money the NYT is spending to advertise their paid online service. I've seen countless ads on television and other types of media. Anyone can build a subscriber base with that kind of ad blitz.

The question is, how long will these subscriptions take to pay for themselves, and will paid users stick around that long?

jspthrowaway26• 14 years ago

> Anyone can build a subscriber base with that kind of ad blitz.

Advertising isn't that simple; if it were, it'd be a lot different.

Benferhat2• 14 years ago

Isn't that simple, as simple as what? Part of what you pay for in a large ad campaign is for people to attend to all of the complexities.

Spending tens of millions of dollars airing the high-quality commercials that the NYT had commissioned? I doubt what they did was simple, but it was damn sure expensive.

jspthrowaway26• 14 years ago

It's an interesting reflection on the Hacker News community that a not-insignificant portion of these comments are about circumventing the paywall. (I count 13 of 53 as I write this.) There are a number of conclusions to draw from that, some of them thin, some of them interesting, some of them depressing.

I pay $20/month to read the Times in bed on my iPad. I mean, it's five trips to Starbucks/Peet's/whatever, guys. The majority of you are programmers clearing high-five or even six figures for, in the grand scheme of things, easy work (not exactly breaking rocks, are we?). Don't forget, those of us who even know how to edit cookies or alter referrers are a small minority; the Times doesn't care if you bypass it because they know you will no matter what.

michael_miller• 14 years ago

I think beyond anything else, it reflects a community which is interested in tinkering with systems and figuring out how they work. I don't think it's because the community is fundamentally interested in stealing access. Most people on HN are extremely well compensated (or could be, if they weren't doing a startup), and $20 isn't going to break the bank for most of us.

rednukleus2• 14 years ago

"I pay $20/month to read the Times in bed on my iPad. I mean, it's five trips to Starbucks"

If I have ever read a comment that summed up HN perfectly, that was it.

jspthrowaway26• 14 years ago

It's the most applicable comparison I could drum up. You could also say it's one typical lunch for two people.

It only keyed in my memory because I watch people pay $4 for coffee every work day but balk at something that's $80/month, or even $20/month (in this case). Perspective is strange.

superuser2• 14 years ago

Paying for journalism is not a yuppie/Valley phenomenon. Newspapers were a staple of working class cities for a long time. Though I'll agree with you on the iPad and Starbucks.

gizmo686• 14 years ago

The interesting thing about the New York Time's paywall is that it, by design, bypasses itself. When you are reffered by sites like facebook, you do not hit the wall. This means that the majority of people hitting the paywall would got to the Time's directly, making the oppurtunity cost in terms of network effects much lower.

cynwoody• 14 years ago

That covers me. I never land in the Times except via a link from somewhere. I never go there directly.

Once or twice in the last year, I've hit the ten-article limit. One of those times, I actually cleaned out the cookies.

tripzilch2• 14 years ago

> clearing high-five or even six figures

> those who know how to edit cookies or alter referrers

On a global scale, these are both minorities, and I'm not even so sure which one is tinier.

chrisringrose2• 14 years ago

Proof that paywalls are bullshit: "the company is expected to make more money from subscriptions than from advertising — the first time that’s happened."

In other words, they're charging so much, and the cost of digital distribution is so low, that they're making a ton of money from this paywall. They shouldn't be. Advertising should be the bigger source of revenue. It's like the government running at a massive surplus - time for a tax cut.

Derander• 14 years ago

I don't see why that conclusion follows. It seems that they've found that people are more willing to pay to read their content than advertisers are willing to pay to have ads alongside the content. There is nothing wrong with that model if it works.

corin_• 14 years ago

Where does this opinion come from? You wouldn't get in a taxi and say "you're making more money from customers than advertisers, stop overcharging me", what makes you think that with digital publishing advertising ought to bring in the most revenue?

chrisringrose2• 14 years ago

This is an article glorifying one exception in a sea of rules. This article gives the false impression that a paywall is a good idea for news sites, (and perhaps some will extend this to any kind of site, pointing to the success of the NYT).

The NYT can rely on its name: we all know it's good, and its been around forever. Their target audience is the educated middle-upper-class. Many will pay, and they'll make money.

But very few existing news organizations could successfully implement a paywall, and zero new organizations could. The only really successful business model on the internet has been "freemium", and free, but ad-based: Google, Facebook, etc. So this one exception occurs; great. But I'm saying lets not all get excited and start suggesting that next tech startup launch with a paywall. "But the NYT did it successfully" will be their last words.

chj• 14 years ago

If that is working, then it is because they did a great job in content creation, not because of some fancy business strategy.

I was trying to subscribe to NYT months ago because a wonderful piece they did and I thought I should offer my share of respect. Unfortunately I tried with Paypal many times for about one hour and still couldn't get the payment through. Then I gave up.

ed_blackburn• 14 years ago

Wondering out loud..so, when are we going to have a micro-payment standard? i.e. I want to read content on any content provider without having to jump through cumbersome hoops?

I wonder if Rupert Murdoch has been approached by Facebook or anyone..?

programminggeek• 14 years ago

A paywall can work for the same reason iTunes works. Most people aren't thieves and are willing to pay for quality things. In short, make something good and charge for it. That business model has worked for a long time and will continue to work for a long time.

The biggest "problem" is that it will be harder to build as many giant media companies around general news distribution. On the other hand, a bunch of smaller players will have a chance to flourish. A lot like modern digital music.

The New York Times Paywall Is Working Better Than Anyone Had Guessed

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