For the last 20 years the American newspaper industry has cratered. Advertising revenue, as well as print subscriptions have declined, just like a falling knife . The local newspapers have been particularly hard hit and some have even closed-up entirely. But The New York Times has announced a big increase in their digital subscription revenue.
The national newspapers, particularly The Wall Street Journal DJCO -0.3% and The New York Times NYT +2.9%, created paywalls much earlier than most news and information sources online. The Journal was particularly early to institute a paywall, starting in 1996. Most people in the digital news industry have considered the Journal’s subscription paywall more of an “enterprise” product and often a business expense for the subscribers.
The New York Times started charging for online content in 2011 and it was a modest revenue source at the time. But over the years, the advertising revenue from print, and even the advertising revenue on The Times’ digital services, has continued to decline. Meanwhile, the digital subscriptions for the New York Times, both for their flagship news brand, as well as for crossword puzzles and other “a la carte” offers for paid content, are growing rapidly.
The Times announced today that for the third quarter of the year, for the first time ever, digital subscribers’ revenue was bigger than the revenue from the print newspaper subscriptions.
“Our strategy of making journalism worth paying for continues to prove itself out,” Meredith Kopit Levien, who took over as CEO of The New York Times Company in September.
There were six million digital subscribers to The New York Times’ core news product, as well as their additional crossword and recipe paid services. In comparison there are less than 850,000 print subscribers to the newspaper of record in the U.S. Further data on their revenue sources and growth or decline are outlined thoroughly in The New York Times newspaper’s coverage of The Times success in paid content.
The Financial Times is another major newspaper that has experienced strong results by charging for access to their content online. The FT has charged subscription packages, like other newspapers, and they were early adopters of a paywall, back in 2002.
The New York Times Company remains profitable and will likely continue to build up both its new subscription service, but also more content and products for consumers to buy. It looks like The New York Times is doing an admirable job at avoiding the complete value destruction that has occurred at other newspaper companies.
Many pundits counted out the newspapers that instituted paywalls, pointing out that news is a commodity and is available free in many digital locations. For instance, in 2011 the Financial Times covered comments by a Canadian media expert, Mathew Ingram, where they described his negative opinion of paywalls, “Ingram contends that there is little guarantee that NYT paywall subscriber numbers will continue to grow, and every reason to believe they won’t.” Clearly The New York Times has been very successful with their paid content offerings.