Paywall Petering Out? Digital Subscriptions Slow at The New York Times

Paywall Petering Out Digital Subscriptions Slow at The New York Times Paywall Petering Out? Digital Subscriptions Slow at The New York TimesThe New York Times made a wager that digital subscriptions would be a critical component of its profitability going forward. Though it clicked at first — to the tune of just under a million subscribers — it now appears that the growth is slowing.

“It may stop altogether if the company’s earlier projections are correct,” according to a recent story published by Re/code.

Before the Times instituted a paywall around its product, the newspaper engaged consulting firm McKinsey & Co. to estimate how many digital-only subscriptions it could sell. In the most optimistic case, say insiders, the number of people who would pay $15 to $30 a month for access to the New York Times website and app was was just under 1 million — or, more likely at these prices — 800,000 to 900,000 subscribers.

“The Times already hit the low end of that projection in June with 831,000 paying online readers,” says Re/code. “And the number of new customers it added in the three months leading up to that point, about 32,000, were mostly for the new NYT Now app, a slimmed-down version of the Times that costs $8 a month. It looks like the McKinsey study got it right.”

Though readers dislike paywalls, they’ve become an important source of revenue as traditional print advertising dries up. Approximately four in 10 papers in the U.S. now charge for online access. At the Times, the paywall is currently a significant source of revenue — about a tenth of annual sales.

“But a slowdown in digital subscribers means it’ll be that much harder for the Times to make up for its losses elsewhere, specifically in advertising, once the life-blood of the business,” according to Re/code. “The company lost close to $90 million in ad revenue — print and online together — from 2011 through last year, and it has been on a downward track ever since.”



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