I’m taking a wait and see attitude on the NY Times paywall

So the NY Times unveiled their paywall on Thursday, and the howling began. There was ranting all over the web about the cost schedule, the design, and how smartphones and the iPad are billed separately. I'm not going to rant and rave about the paywall. Instead, I'm going to wait to see if it generates revenue. I hold the view that a stupid design isn't stupid if it works. If the NY Times paywall actually increases  revenue then it was the right decision.

Now, this paywall cost a reported $40 million USD over about 14 months, and that sounds like a lot of money. But the NY Times had an operating profit last year of $380 million USD. If you look at the paywall as a capital investment (that's what it is), it no longer looks like a boondoggle. It's an expensive gamble, but it's not a complete waste. It can still cover its costs.

Before I go further, there's a part about the paywall that most seem to have glossed over. Apple are getting 30% of any subscriptions ordered from iThings. With a 100 million IOS gadgets out there, Apple's vig might be the straw that broke the camel's back. If the paywall loses money, my first bet for the culprit will be Apple.

And one other thing everyone seems to have missed (including me) is that the ereader edition of the NY Times is still available on the Kindle, Nook, and Kob0 ereader as a completely separate fee. It's $20 in each store. Now that's ridiculous. At the very least it should be given equal footing to the other options. You should get web access thrown in for free.

Mike Masnick ranted on Thursday about how the new paywall charges $15  a month for smartphones (& iPhone), $20 for tablets (& iPad), and $35 for both. I can understand why he thinks there should be a 1 price fits all, but I strongly suspect that the NY Times based the prices on market research.  I think they may have found that enough people will pay that much to make it worthwhile. Fourteen months and $40 million USD - how much research do you think they did? I don't know, but I'm not going to assume it was none.

All in all, it was a very interesting spectacle on Thursday, but the story is not over. The conclusion won't be written for at least another couple months, not until we know how well the paywall works.

image by B.K. Dewey

About Nate Hoffelder (11465 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

1 Comment on I’m taking a wait and see attitude on the NY Times paywall

  1. Pay Wally - Not. // 21 March, 2011 at 8:02 am // Reply

    Here is somebody’s twitter feed of TimesWire links.


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