A quarterly earnings report from The New York Times Company contains a mix of good and bad news for its digital subscription plan
When The New York Times Company introduced its digital subscription plan last March, many tech and media blogs were skeptical that people would pay for news online. People explored all the various ways you could jump the paywall, and debated whether doing so was moral. With so much free content elsewhere on the web, and a porous paywall, would anyone sign up?
Today's third-quarter report from The New York Times Company indicates that plenty of people will indeed pay for paper's content -- 324,000 and counting. In addition, about 800,000 home delivery subscribers have signed up for their digital accounts (one is included with paper delivery). And, perhaps what is the best news for the company, paper subscriptions have "continued to increase," although it did not provide specifics. Paper subscribers are more valuable to advertisers and therefore to the Times Company.
All told, profits are up to $15.7 million, compared with a loss of $4.3 million from the same period last year.
But it's not all good news. Advertising revenues were down by 8.8 percent, but a large of the decline was in the company's About.com business. Its News Media Group, which includes the newspaper, saw digital advertising revenues rise but print advertising revenues decline.
Whatever the success of The New York Times's digital-subscriptions plan over the long haul, in some ways that is not the important test case for the rest of the industry. The grey lady stands a head above other major newspapers, when ranked by Pulitzers received, subcriptions, and website quality. A better indicator as to the plausible success of paywalls as a tactic for stopping subscription cancellations and shoring up revenues for the media industry writ large is how a new paywall fares at The Boston Globe, another of the Times Company's papers. The numbers released this morning do not yet reflect that change, which only went into effect last month.
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