The New York Times Paywall

Introduction New York

Times
Founded on Sept 181851
By Henry J. Raymond & George Jones
Led by Arthur Sulzberger Jr. Chairman in

2011
By 2011 had won 106 Pulitzer Prices
In year 2011 had Revenues of $ 2.3 Bn.
Operating profit $ 57 Mn.
Digital subscriber base of NYT was 3,90,000

New York Times Company

New York
Times Media
Group

New England
Media Group

Regional
Media
Group

About Group

Other Joint
Ventures

NYT Business Units

NYT Media
NY Times
International Herald Tribune
New England Media Group
Boston Globe
Worcester Telegram & Gazette
Regional Media Group
15 Newspapers in S.E. & California Sold in 2012/ $143 Mn.
About Group
about.com
caloriecount.com
Joint Ventures

U.S. News Paper Industry & Trends

In 2009, Industry size $ 35 Bn.
Overall 5000 Players
Top 50 Players accounted for 75% of Business
Advertising contributed to 75% of total

revenues
Production & distribution were the major costs
Journalism Industry was getting disrupted
(Internet)
Moving from Offline to Online Content
Evolution of Digital disruption

BUSINESS CRISIS NEWSPAPER

INDUSTRY
Overall paper circulation was declining YOY
Advertisement revenues were declining
Detroit Free Press went weekly from daily
Ann Arbor News went totally online
Wall street journal introduced paywall successfully
On contrary Times of London lost visitor traffic

from 2.79 Mn to 1.61 Mn.

Other media sectors suffered revenue loses due to
digital disruption
iPad was another new medium of consuming news

NY TIMES - CHALLENGES
Print Subscriber base went down by 8% from 2007 to

2011
Advertising revenues went further down by 6% in 2011
on YOY basis
Operating profit dropped by 76% on YOY basis
Had to sell Regional Media Group Business for $ 143 Mn
Online subscription model
TimesSelect Online Subscriber experiment introduced in
2005 was not a real success
Uncertainty about new Online Subscription Paywall
platform

NYT FINANCIALS 2008 TO 2011

Financials of the NYT Company ( $ millions)

2011 2010 2009

Revenues

Advertising
1221 1300 1336

Circulation
941
931
936

Other
160
162
167

Total Revenues
2323 2393 2440

Operating Cost

Production Costs
957
962
1021

SG &A
1020 1054 1153
Depreciation and

Amortization
116
121
134
Total Operating
Cost

2094 2137 2308

Operating Profit/Loss
57
234
74

Net Income/Loss
-40
108
20

2008

1771
910
258
2940

1310
1328
144
2783

-41
-58

Online Subscription THE

PAYWALL
First attempted by NY Times in 1996
Was priced @ $35 per month
Was dropped to not disturb the increasing internet

user traffic
Second attempt in 2005
TIMES SELECT priced @ $49.95/Yr.
Touched 227 thousand paid subscriber base by 2007
Closed on Sept 2007 due to criticism of pay wall
approach
User base had access to similar content through
social media & blogs

Designing New Paywall NYT

Types of Platforms available:
All OR Nothing
Exclusive Content
Metered System
Device Specific Offers

NYT OPTED for:

Metered System Allowed 20 Articles per month,
extra on paid basis
Device Specific Offers Different schemes for devices
Partnered with Auto Manufacturer Lincoln for
free subscription

Leaky wall Concept

Those who directed through Search Engine limited

articles
Those through Social media unlimited access
Digital Pricing:
NYT + Smartphone $3.75
NYT + Tablet $5.0
NYT + Smartphone + Tablet $8.75
Print Home Delivery Pricing:
7 Days $15.40
Friday - Sunday $10.80
Only Sunday $7.80
Monday- Friday $7.7

Results
February 2012 NYT Reported 3,90,000 paid

subscriber
70% of paid subscriber registered for digital
access
However, Potential drop in Website traffic &
online advertising revenue.
Concern in Online adv. Revenue
For 2011, digital advertising revenue for the
company was about 28% of the total ad
revenue.
Overall business sentiment was not positive

Conclusion & Recommendations

Positive Growth in subscriber base
In short Term pay wall was success
Uncertain about long term strategy
Recommendation
They should continue with pay wall until they have

enough online adv. revenue.

However do away slowly and steadily with pay wall.
Initially can offer longer subscription periods to
loyal customers at the same charges.
Discount on subscription to new customers

THANKS