Analysis of FT and NYT Paywall Success

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Analysis of FT and NYT Paywall Success

For newspapers looking to offset falling advertising revenues via increased paid subscriptions one solution is to raise prices of the printed versions of your product in order to gently nudge loyal readers online. A great analysis of how two newspapers the Financial Times and New York Times have been successful in doing so comes from Frédéric Filloux of The Guardian who explains that the NYT has increased their print prices by 25% in the UK and the FT has had a whopping 40% increase over a similar time period.

The article goes on to explain how the FT has a simple strategy when it comes to paywalls – you get less and less free articles per month unless you pay. The NYT has a more convoluted strategy which has a few tiers – and the article says both newspapers have models which work.

I have long been skeptical of most newspapers getting readers to pay but it seems the NYT has a strategy which is working for them considering they have 324,000 digital paid readers which they collected over nine months.

Regarding the FT – it is no surprise to me it is able to gain digital paid readers as the FT and Wall Street Journal are business/investing newspapers meaning you can justify the price due to the fact you are getting investment advice. Less so for the NYT but of the last few years the company has associated itself more with the investment community. Consider for example the fact that Too Big to Fail author and NYT columnist Andrew Ross Sorkin is now a regular anchor on CNBC and also recently launched a site on NYT.com called Deal Book dedicated to M&A. And he has broken some big news in the past which again makes the NYT a more palatable buy for investors and businesspeople in general.

The article also touches on HTML5 and the decision by the FT to rely on this open standard as opposed to the Apple iTunes App Store. In the opinion of the author, going HTML5 is a better long-term solution while the App Store can give you a quick hit.

It would seem to me that all media companies will have to develop HTML5 apps as a way to ensure they reduce development time as ne platforms emerge and fragment the market. Sure, today it looks like iOS and Android are where the action is but over time – who knows what other gadgets and/or form factors consumers will become enamored with.

At the end of the day these newspapers and many app developers have determined the freemium model is the one which is most successful… Hook the reader or user with something free then upgrade them by promising less ads, more content, etc.

The question becomes of course how to manage the paywall – how many articles should you give for free for example. This is where analytics comes into play – and as a result we can expect more big data analysis over time in not only the media and newspaper space but across apps in general.

And I consider the advent of new online business models and more consumers paying for once-free content online as an awesome sign for the vitality of the Internet because as advertising has become less lucrative it behooves content and app providers to get users to pay more for what they consume.

To learn more about HTML5 Development check out HTML5 Summit a DevCon5 Event collocated at ITEXPO in Miami, FL, Feb 1-3. The show is part-owned by TMC where I am CEO.



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