The New York Times Paywall Is Paying Off
Update April 25, 2014<
It's been two and a half years since the New York Times Company introduced the controversial metered paywall for its online content. In the face of declining print revenues, the company felt it had no choice but to stop giving away its content for free. By the end of March 2014, the New York Times had 799,000 paying digital subscribers, which is remarkable given the reluctance of many people to pay for digital news content. More importantly though, the paywall appears to work on a monetary level as well. Overall revenue of the New York Timea has increased in eight out of the ten quarters that have been completed since the paywall's introduction.
However, there are people that argue the Times could be better off without the paywall.
There are several ways to monetize online content. One of them is charging for it. Another one, which is much more common, is advertising. The Times' decision to restrict access to its online content was, to some extent, a concious decision against advertising. Ever since paywall was introduced in March 2011, advertising revenues have declined more or less steeply. In many quarters that decline has been offset by rising circulation revenues, but there's a limit to digital subscriber growth. Those who argue against the paywall expect that limit to be reached pretty soon (subscriber growth is already tapering off), whereas online advertising will continue to grow.
It will be interesting to observe who will turn out to be right in the long term. For now, it appears, the paywall is paying off.
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