The (mis)fortune of the NY Times’ pay wall

In March 2011 the American newspaper the New York Times decided to do something completely new in the media world. They started using a pay wall. No more free news for everyone. People could subscribe and then read the paper’s news. Due to economic reasons the paper was forced to do something. They we’re ‘giving’ their news away for free on their website and fewer and fewer people bought a printed newspaper. A pay wall was the solution and it seemed to work.

Now, a little more than two years later, writer Ryan Chittum states that “the Times’ digital subscription revenue soared past its digital ad revenue”. Digital subscriptions fetched 37,7 million dollars in the last quarter, while digital ads brought in just 32.9 million dollars. So most revenues now come from readers, not advertisers, that’s something that rarely happens.

The massive digital-subscriber growth of the first two years has slowed, which means the newspaper’s upcoming expansion of its digital subscription model will be decisive for their stabilization.

But not everything runs smoothly. Mathew Ingram, online media writer, says that “the problem is not getting better, but instead it’s getting worse”. Although the Times’ digital subscriptions have been  increasing, its overall revenue barely changed. As I mentioned before, both print and digital ad revenues are declining. What may surprise you is that digital ad sales fell even faster than print ad sales. Print lost 1.6 percent, digital 3.4. It’s hard to find the right advertisers, as big companies such as Facebook Inc. and Google Inc. take out large parts of marketer’s budgets.

The NY Times will have to make serious efforts to attract new advertisers. The fact that more and more people subscribe to digital newspapers is a good thing. Let’s hope the newspaper finds a way to manage the advertising issue.

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