Write-Up

on New York Times Paywall

The paywall, as installed by the New York Times, is serving its purpose of
substantiating the online revenue stream that was earlier completely dependent on
advertising revenue. So, in other words, this was an essential step.
Now from Exhibit 3, we can gather that in 2008, advertising contributed 60% of the
total revenue whereas in 2011, the percentage reduced to 52%. In the same interval,
we observe that the circulation is the only component that has increased.
Since it is undeniable that news has shifted to the online space, the product strategy
and channel interface should encompass the following modifications:

1. Try to bring more people online, increase number of unique visitors
2. Incentivize the user to subscribe by diversifying subscription options, such as
section-wise subscriptions and writer-wise subscriptions (De-Bundle)
3. Introduce customizable interfaces on mobile apps, tablet apps as well as on
the desktop

The pricing can accordingly reduce to smaller units than the existential rates. The
section-wise or the writer-wise subscriptions would reduce subscription rates and
due to lower threshold, increase subscriptions. This would reduce the cost from the
humongous $455. Additionally, it will help the advertiser improve targeted
marketing, for which a premium can be charged.

I believe the digital and print price should be segregated and the pricing should be
such that users are encouraged to move online, rather than the expensive and
declining print medium.

Short-term plan would be to stem to the reader loss by making the transition to the
digital platform as smooth as possible. The long-term plan would be to increase the
reader base and provide greater value, while at the same time maximizing profit.

The digital transition has resulted in a faster than anticipated territory shift for NYT.
While this has lead to some obvious challenges as mentioned in the case, this also
presents newer opportunities to innovate with revenue generation, as discussed
above.

In terms of journalistic integrity, paywall acts as a denial of information. But from
the vantage point of running a business, the paywall acts as one of the efficient ways
to monetize the readers in general. Thus, in light of shift to the online platforms, yes
paywall is good.

By,
Shankar Ananth
15PGPIM45