Archive | Pricing

The $195 Logic of the New York Times Paywall

new york times paywall

Here is one way to understand the $195 price of a 12-month digital subscription to the New York Times. The price bridges the 2010 gap between average revenue per user (ARPU) for print vs. the ARPU for online. Here is the calculation of the difference. Print ARPU The Newspaper Association of America Trends & Numbers provides details on audience and revenues for US newspapers. Users of print are determined from the print readership which was 152,245,119 in 2010 according to Scarborough Research. Revenue of print is determined from a combination of the advertising and circulation revenues. The print advertising revenue in 2010 was $22,795,000,000. While 2010 circulation revenues have not been provided, most analysts expect them to remain flat compared […]

Why Revenue Estimates for The New York Times Paywall Are Wrong

A digital subscription to the New York Times (NYT) is now a minimum of $195/year ($3.75 per week times 52 weeks). Chatter about the possibility of low subscribership and why $40M was too much to pay is everywhere. The primary logic used by the naysayers of the NYT paywall is that not enough people will pay the minimum $195/year. Whether the paywall will succeed or not, only time will tell, however predictions of revenue based on consumer payment is simply wrong. The logic goes something like this. For consumers, digital news has an anchor price of $0.00 created by years of free access. If a consumer has to pay more, they will take their page views elsewhere. The consequence is […]

Demand Map™: A Quantitative Lens for Revenue Optimization in Paid Content

Posted by: Matt Shanahan In the book Super Crunchers, Ian Ayres looked at hundreds of tests evaluating how data-based decision making (i.e., quantitative) fares in comparison with experience- and intuition-based decisions (i.e., qualitative). We were interested in doing the same thing regarding license revenue optimization in paid content. When a publisher designs a license for paid content (i.e., packaging and pricing of access to media and information), they do so with an expectation of how much media or information will be consumed (i.e., the level of engagement). Typically, the license is defined in terms of sections, volume, numbers of users and usage rights. When a new license is introduced, the initial price is usually based on previous experience and intuition of […]