Its circulation strategy, led by the paywall, more than offsets ad losses in 2012
UPDATE: Thanks to Mathew Ingram for pointing out that the extra week in the fourth quarter affected Times’s fiscal year 2012 results too. That makes its numbers a bit less rosy. Without that extra week, the NYT says the paper’s revenue would have been up 1 percent, not 2.6 percent. Its circulation would have been up $76 million, not $90 million and ads would have been down $56 million, not $44 million.
This is all real money, but for comparison’s sake, it’s better to look at 52-week periods.
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I'd like to point out that there is a fallacy in the argument that Newspaper of Record is also the Newspaper Business of Record. It's pretty clear that they sit at the top of the ecosystem and can afford to play with paywalls. I'm surprised that no mention was made of the rather dismal results of paywalls downmarket (other than hinting at it in the title).
Alas, as a dot-com product guy and a service provider in the industry, I like to point out good revenue practices being used by dot-coms.
Online newspapers are dot-coms and they should measure their successes as a separate P&L taking particular note of the cost of customer acquisition and the lifetime customer value once a customer commits to paying. It's a solid metric that often goes unmeasured and unmentioned.
For reference: http://www.quora.com/Software-as-a-Service-SaaS/What-is-the-single-most-effective-metric-for-a-SaaS-business
HTH,
K
#1 Posted by Kelly Abbott, CJR on Wed 13 Feb 2013 at 12:39 AM
Nice summation of the obvious results of charging for your work (how novel!), but I couldn't let this blatantly idiotic bit at the end go:
"It’s conceivable that digital circulation revenue could overtake digital ad revenue by the end of this year if trends stay somewhat stable.
That wouldn’t be a good thing. The NYT paywall is a huge victory for the company and for journalism as a whole, but turning that into a sustainable all-digital future for the Times will still require major growth in its non-subscription digital revenue."
The notion that news will still be subsidized by ads in a decade is just silly, considering almost nobody makes money off online ads now and the total non-search ad numbers keep heading downhill all the time. News benefited from a unique situation decades ago, when we lived in a low-information environment where newspapers were one of the few places where masses of information seekers congregated. That is the opposite of the information abundance on the internet today, where at the least the massive inventory of sites placing ads, Facebook, twitter, etc., drives the price of ads to nil and at most advertising is a dead model (I think it's the latter).
Paid is the only way out and any money spent on propping up advertising online will be money wasted. Of course, the NYT and other newspapers are too dumb to realize any of this- look at how long it took them to take this extremely simple step of putting up a paywall, more than a decade after the Economist raised theirs- so they will all go bankrupt soon, but at least they can stay on life support a little longer now, through their paywall.
#2 Posted by Ajay, CJR on Wed 13 Feb 2013 at 10:38 AM
Interesting to see the NYT just stiffened its paywall a few days ago. It's still beatable, but a couple of the easiest tricks no longer work.
#3 Posted by Noah Body, CJR on Fri 15 Feb 2013 at 06:26 PM
"That will mean annual revenue close to $140 million, assuming $195 per subscriber, which is the lowest price point."
The lowest price point is $0.99/mo, if you consider the recent offers. But even this does not mean much. Subscription revenue is measured by Customer Lifetime Value (CLV), which depends mostly on Customer Acquisition Cost and Churn.
http://blog.scoutanalytics.com/churn/want-to-be-profitable-in-the-subscription-economy/
#4 Posted by Greg Golebiewski (@znakit), CJR on Mon 25 Feb 2013 at 01:29 PM