A year after it was first launched, The New York Times has announced that it will be making its leaky paywall a little more watertight as its number of paid digital subscribers has risen to more than 450,000. The paper has revealed that it is preparing to cut the number of stories it makes available to non-subscribers from 20 to 10.
However, users will still be able to go over the 10 article cut-off point if they access Times articles through links shared via blogs, email, Twitter or Facebook. The same applies to articles accessed through search links, although in the case of some search engines, users will be limited to five free articles a day. The company states that nytimes.com homepage and section fronts, and the top news sections on the Times’ tablet and smartphone apps will remain free of charge. Print subscribers to The New York Times will continue to enjoy unlimited access to nytimes.com and to New York Times apps, while International Herald Tribune print subscribers will likewise receive free access to the Times website and to the IHT’s mobile products.
But although the Times has left several back doors open, the fact that it is tightening its paywall can be seen as a sign that its digital strategy is gathering strength, meaning that it now feels able to ask more from its users. The company has announced 454,000 paying digital subscribers, up from 390,000 last month. Ryan Chittum at the Columbia Journalism Review notes that the Times “has added nearly 58,000 digital subscribers per quarter after that first quarter—a 17 percent clip per quarter, which is excellent”.
To bolster these numbers, the Times has announced a special offer on the anniversary of its paywall launch. The paper is giving existing print and digital subscribers the option to gift a 12-week subscription to the Times website to a friend of family member. The move, according to paidContent, “will give the NYT customer relationships with those people [who receive free subscription] and, because they come via referral, a better shot at converting them to paying customers.”
But while digital subscription numbers and the potential for growth online looks good, there is still disagreement about how far the Times digital strategy will support its overall business. At the most optimistic end, Crain’s New York Business quotes Barclays Capital analyst Kannan Venkateshwar, who suggests that if the Times is “able to continue this momentum they could offset a lot of their advertising losses on the print side.” According to Crain’s, Venkateshwar estimates that the paywall could generate $100m over the next two years, balancing out the estimated $50 million that the Times loses annually in print advertising. On the other hand, Bloomberg quotes Citigroup Inc. analyst Leo Kulp, who says the Times subscription numbers are “a little below what we were expecting” and states “the paywall is not going to offset the print declines.”
It seems clear that The New York Times is still facing financial difficulties. When the company published its forth quarter results last month, Business Insider noted that “its core business, the print newspaper, is shrinking, and its digital business, however successful, cannot replace the lost revenue and profitability of the print business.” BI estimated that the Times’ digital operation “will eventually support a newsroom about one-third to one-half the size of the paper's current one.”
Bloomberg highlights that The New York Times share price has dropped more than 70% since 2006 and is continuing to suffer, partly because of its lack of a permanent CEO since Janet Robinson was forced to stand down in December. Bloomberg quotes Douglas Arthur, an analyst at Evercore Partners Inc., who told the publication, “since Robinson left, the stock has gone nowhere despite an unbelievable rally in the market. It’s disappointing."
Bloomberg notes that when Robinson was pushed out, she was granted an exit package of $23.7 million.