The New York Times: Creating Revenue with Paywall

Situation Analysis Newspapers and print media have experienced increasing difficulty due to the shift in the way people consume information. According the Pew Research Center, 55% of New York Times readers read the Times on a phone or a computer. That trend holds true across the industry with 2012 numbers showing that over half of Americans consume news online, while only 29% claimed to have read a newspaper in the last day (See Exhibit 1). Declining print readership means fewer advertisers and declining price-leverage for newspapers. The increasing percentage of digital readers does little to mitigate the losses since online advertising is seen as less effective and commands far less money. Print advertising revenues have been in a free-fall over the last ten years. Adjusted for inflation, 2012 newspaper print advertising revenues fell to the lowest annual level of print advertising since the industry data started being tracked in 1950 (See Exhibit 2). Another cause of concern to newspapers should be the declining interest in news overall by generation Z. About three in ten people under 25 answered that they do not consume news via any medium per se. The goal of the New York Times adding a paywall is money. In order to offset the loss of advertising income, a paywall is an additional stream of revenue. Along with income however, creating a paywall further plants the NYT’s digital flag in the ground. It does seem to be an industry axiom that print newspaper will be shining the brass on the Titanic sooner rather than later. Although print advertising most likely will never be completely replaced, newspaper companies recognize the importance of reinventing themselves in a digital marketplace. Before evaluating the NYT’s paywall design, I think it is important to consider the timing of this third endeavor as well. I think the first paywall attempt failed because it was introduced far too early in the Internet era and surely did not