I wrote a post for The Atlantic back in March when the paywall first launched that called it “unsustainable.” And yet, as Felix Salmon has detailed here and here, the paper is on track to hit its goal of 300,000 digital subscribers. Was I wrong? I don’t think so; at least not yet.
A bit more from about NYT’s success, from NYMag:
It will take years for the ultimate wisdom of the Times’ strategy to be apparent, but the company’s second-quarter-earnings report proves that its digital-subscription plan has thus far been an enormous success. The internal projections have been closely held, but several people have confirmed that the goal was to amass 300,000 online subscribers within a year of launch. On Thursday, the company announced that after just four months, 224,000 users were paying for access to the paper’s website.
As Felix notes, that revenue is a drop in the bucket, but still promising. So here’s what I wrote when the paywall launched:
I wouldn’t be surprised if the NYT can raise some revenue from this in the short term from people young enough to have canceled their paper subscription but not so young to be heavily into social media, at least as a means of getting news. (Age isn’t the only relevant factor here, but it’s one.) But that already limited demographic will shrink over time. Put another way: the number of users interested in NYT content but not already reliant on social media — or even just capable of using it — to access news is shrinking and will continue to do so.
In other words, NYT was leaving some money on the table and they decided to pick it up. But I’m skeptical that they can grow digital subscriptions over time. Eventually, I’d expect the pool of digital subscribers to shrink. But Felix has some good pushback on that kind of logic:
Sales people and business-side executives tend to believe as a matter of faith that if people can get something for free, they won’t pay for it. But all they need to do is look at their own behavior to see how that isn’t true: when they go to a restaurant in a distant town that they’ll never visit again, they still leave a 20% tip. A large segment of the population feels that it’s only proper to pay for something if you’re getting value from it…
I had a couple brief online conversations after I posted a quick screed against record companies that suggested paying for music may not be necessary, and based on those conversations Felix is, at minimum, partially right. At least when people are used to paying for something, they feel obligated to keep paying for it. Multiple people spoke to me about how important it was to pay for music in order to support the artist, etc.
But is this true in some absolute sense? That it’s getting value that prompts people to pay? More likely it’s being accustomed to paying for something that gives you value. Which is to say I expect that a generation that grew up never paying for information won’t feel compelled to pay for news.