NY Times Paywall Case Write-up
1. The New York Times Paywall as introduced in 2011 is a combination of the metered system and the device-specific offer. The New York Times Company had already rejected the all or nothing system and the exclusive content system. Explain why each of these two rejected systems was wrong for The New York Times. Does the current paywall avoid the problems that disqualified these other two systems?
The New York Times was afraid that the all or nothing model would drop the online traffic significantly. For example, when The Times of London introduced a paywall in May 2010, its traffic dropped from 2.79 million unique visitors before the paywall to 1.61 million a few months after the paywall was introduced. When the online traffic is dropped your online advertising would also drop. On the other hand you also increase your competitors’ online traffic.
Same reason as using exclusive content it’s easy to search for the quality content online so if The Times couldn’t provide quality content for everyone its online traffic would definitely drop. For example, SelectTimes experienced the same situation when the online advertising was growing so The Times ended the SelectTimes model.
The current paywall can avoid dramatically traffic dropping by offering 20 free articles and the articles shared on social media. Therefore, The Times can avoid online advertising revenue dropping. Furthermore, by obtaining subscriber’s personal information The Times could provide more values to its online advertising customers.
2. Will the paywall increase or decrease revenue? Consider that the paywall will decrease traffic from users who hit the view limit and choose not to pay for an online subscription. Is the added revenue from subscribers sufficient to offset the decreased advertising revenue from browsers who hit the view limit? Use numbers from the case to support your claim
In the Table C, we can see that the...