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 […]
Tag Archives: Paywall
What about an Adwall?
In the pursuit of earnings, publishers have done two things - intensified SEO efforts, which creates fly-by ad revenue and established paywalls, which create fan subscription revenue. Remember these definitions: Fly-by – Someone who visits once. Occasional – Visitor to the site two to three times per month. Regular – Visitor to the site one to two times per week. Fan – Visitor to the site more than two times per week. Some fans are willing to subscribe through a paywall, and fly-bys are commodity impression to be bought and sold through exchanges, but what about the other 15-25 percent of the audience? The barbell focus on fans and fly-bys for revenue optimization overlooks a significant untapped opportunity in between […]
Do Newspaper Paywalls Solve the Online Revenue Issue for Shareholders?
Given the New York Times earnings call this week and all the chatter about their paywall, my curiosity was piqued about how shareholders should assess the paywall ability to offset low online advertising revenue. The following analysis explores that topic. The assumptions and conclusions are based on both public information from the 2009 Annual Report for The Washington Post Company and Scout Analytics experience. The scenario is hypothetical but representative. As print circulation and revenues decline, digital audiences and revenue have to take their place. Because online advertising has not yielded the same revenue as print advertising, many publishers are looking to paywalls to solve the digital revenue problem. The conclusion below is that the yield from online advertising has […]
Mandatory vs. Opt-in Paywall Analysis
Posted by: Matt Shanahan Increasing ARPU with a paywall is a strategy being pursued by an increasing number of publishers, however different paywalls have different revenue dynamics. What and how to charge have big implications. Specifically, a mandatory vs. an opt-in paywall have very different revenue dynamics and risks. Let’s look at the math. Assume a publisher has identified a monetizable value proposition (see methdology) and a fan base of 10,000 with an average daily consumption of 10 page views. Further, let’s assume the publisher averages $10 RPM. Under these assumptions, the ARPU of a fan is $36.40 (i.e., 10 page views/day X 7 days/week X 52 weeks/year X $10 RPM ÷ 1000). The revenue of the fan base is $364,000. Now […]
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