The New York Times Paywall

Aadish ChopraAbhishek JatharEdgar Guzman

Kousalya DwarapudiShakunthala Narayanaswamy

Impacts of Technology

Online Model

Porter’s 5 forces framework

Product Strategy

Pricing Strategy

Recommendations

Agenda

Impacts of Technology POSITIVE NEGATIVE

New sources of revenue Drop in Ad Revenue(Paywall- 287.5% increase in ( 68% decrease in Ads- Dec’11 Digital Ads-5.3%(Q4’11)) 2007-09)

Expansion of reader base Drop in Circulation(Lean back experience increased (9.6% decrease in overall

news consumers via ipads) circulation )

Operational Cutbacks(Detroit Free Press & AnnArbournews)

Uses a device specific & metered system design 20 free articles / month

Before Paywall After PaywallDigital Ad Revenue-8.2% Digital Ad Revenue – 28% Increase in Online traffic 390,000 paid Subscribers

70% Print also digital

From Mar 2011 to Dec 2011 Revenue Paid Subscribers

Positive Growth? YES !

Online Model

Revenue as of Dec 2011Subscription rate = $4/week

No. of Subscribers= 390K Revenue=$4*390K*4(weeks)=6.2 Million

Revenue as of April 2011No. of Subscribers=100K

Revenue=$4*100K*4=1.6 Million

Increase in Revenue from April to Dec 2011:4.6 Million which is 287.5%

Metrics:

Porter’s 5 forces framework

Customer Power HIGHSubscribers & Advertisers• Alternate source of

news easily available • Cost of switching is low

Suppliers powerHIGHEminent Columnist

LOWIntl. news agencies.

Competitive Rivalry HIGH

• Other established newspapers

• Classifieds Craigslist

Monster.com

Threat of New Entrant HIGH• Low capital investmentEx : Buzzfeed

Threat of Substitutes HIGH• Televisions• Radio• Social Media• News Magazines

Merits and Demerits of PaywallMerits Demerits

1. Increased Revenue via subscriptions

2. Improves legitimacy of news content

1. Losing a potential reader-base.

2. Revenue is less as compared to print revenue

3. Leaky paywall leads to loss of revenue

Updated Metered System : The readers would be allowed to access only 15 free articles, since anything over 15 then they will simply wait it out for the next month to start and reset their article count

To lock the other 30% of print subscribers, we can give them offers such as ‘One year subscription at $260 with free e-reader’

Enticing different groups with introductory offers after registering their credit/debit card details (so that we don’t lose them after the trial period) : ◦ Corporate tie-ups: Special discounted prices for the

employees.◦ Promotions for Students, giving them one month free trial. ◦ Tie up with the Network providers, registered users get one

month subscription at $12($3/week), originally at $15/ month ($3.75/week)

Product Strategy

In order to make the pricing of the NYT digital services more attractive they can do the following :

1. Segment wise subscription : This will allow them to capture subscribers who are fans of specific sections of the NYT. Only exclusive sections like Opinions page, Editorial page.

2. Team-up with tablet manufacturers, every new tablet buyer would get a one-year subscription of NYT digital at only $200 additionally ($3.84 per week).(The original pricing is $5 per week i.e,$260 per year).

Pricing Strategy

Subscription Pricing1 section (op-eds) $2/month2 sections ( op-eds/ editorial)

$3/month

To move the print subscribers to digital, we can do either of these alternatives:

Only 1 crossword and Sudoku puzzle in the print edition but for more they can access it on the online edition (medium and hard levels) -Assuming around 10% of print users actually use the crosswords, that means around 39,000 (1.3 million print subscribers in 2011) digital subscribers at least

More investment in Exclusive articles, hire better writers since the content has to be worth those many dollars. Exhibit 3 shows decrease in SG&A(Selling, General & Admin) from 2008 to 2011

Have closed group network where the online subscribers can blog and post comments, we can reward the most active user with points that can get them discounts in subscription fees and the best comment can be published

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