Earlier in the season the paper announced a new platform based on native advertising. This was largely a response to the growing use of ad blockers, especially on mobile devices. And the paper could potentially become the first mainstream news organisation not to serve its smartphone readers display ads.
The paper is also starting to to feel the heat from the Washington Post. Its key rival, which is now under the helm of Amazon's Jeff Bezos, has embarked on an aggressive growth strategy which is clearly targeting the New York Times’ demographic. It has also had to deal with The Guardian's ongoing push into north America - 120m readers and counting - as well working out how to build customer loyalty among millennials in the face of the challenge from BuzzFeed and Vice.
If that sounds like a lot on the plate of NYT’s CEO, ex BBC Director General Mark Thompson, he will at least be cheered by the news in August that the paper finally notched up its millionth digital subscriber.
The NYT’s paywall, which was introduced back in 2011, is one of the most celebrated in journalism. Readers get 10 free articles per month and then to read more they need to pay a subscription fee which starts at US$3.75 per week. The metered paywall has also been adopted by other news organisations such as The Daily Telegraph.
There is one overwhelming reason why the NYT has been able to make a success of its paywall, and that is its commitment to quality journalism. In an age where news is commoditised and stories are shared via social media in seconds, the quality and depth of the NYT’s reporting and analysis really are second to none.
Technology has played an important role in the growth of subscriptions too. Many of the NYT’s subscribers are accessing the content via mobile. The Nieman Labs reports that almost a quarter of its iPhone app’s monthly users are subscribers. ‘While 30× more Times unique visitors access the Times through a mobile browser than through its app, it’s the subscribers who disproportionately love the app.’
Thirdly the Times’ status as a global news source has helped grow its subscriber base. As much as 13 per cent of digital subscriber growth arrives from outside the U.S. That means the non-US digital subscriber population is approaching 100,000. Nowhere near as many Americans are buying the print version of the paper, but its worldwide reach is clearly at an all time high.
The dilemma for the NYT now is how to continue to grow that subscriber base. At present the subscriptions generate around $200m a year - enough fund the paper’s newsrooms, but little else. If print revenues continue to drop, and its display advertising falters, then it faces a huge challenge in standing still in terms of generating income, let alone grow.
One option may be the development of niche subscriptions. So readers could pay smaller figures to access sports, culture or even local New York news. The company has experimented with subscription based apps with varying degrees of success. But this is clearly an option going forward.
The paper might have to more aggressively market its paywall. For example it could potentially halve the number of articles readers get for free. It has done this before reducing the figure from 20 to where it is now at 10. Spurred on by the Washington Post (whose subs start at $2.50 per week) the NYT could also bring down the cost of the subscriptions.
Spotify for content?
Ultimately what lessons can magazine publishers learn from the success of the NYT paywall? First it is clear that there is an appetite for readers to pay for high quality content. However many industry pundits believe that consumers will only pay for one or possibly two news/magazine sources online. Which may make a Spotify-esque platform offered by Blendle or planned by Sourcepoint more attractive.
The other major lesson is that mobile is both an opportunity and a headache for publishers. Many publishers are clearly notching up huge figures on smartphones, but translating those page views into revenues in a world of ad blockers is becoming a challenge.
The NYT has acted quickly and decisively on this with its native strategy. It may be a ploy that other publishers will also find works for them.
The ‘Gray Lady’ has reinvented herself many times in the past, and it seems very likely that she will transform again in the not too distant future.
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