[carbon8]

Regarding what any of this means for other content paywalls, note this section from Post Industrial Journalism: Adapting to the Present (http://towcenter.org/research/post-industrial-journalism/):

"Finally, a note about why we will not be concentrating very much on the fate of the New York Times. A remarkable amount of what has been written about the fortunes of American journalism over the past decade has centered on the question of what will happen to the Times. We believe this focus has been distracting.

"In the last generation, the Times has gone from being a great daily paper, in competition with several other such papers, to being a cultural institution of unique and global importance, even as those papers—the Washington Post, Chicago Tribune, Los Angeles Times, Miami Herald, among others—have shrunk their coverage and their ambitions. This puts the Times in a category of one. Any sentence that begins “Let’s take the New York Times as an example ...” is thus liable to explain or describe little about the rest of the landscape.

"The Times newsroom is a source of much interesting experimentation—data visualizations, novel partnerships, integration of blogs—and we have talked to many of our friends and colleagues there in an effort to learn from their experiences and make recommendations for other news organizations. However, because the Times is in a category of one, the choices its management can make, and the outcomes of those choices, are not illustrative or predictive for most other news organizations, large or small, old or new. We will therefore spend comparatively little time discussing its fate. While the Times serves as an inspiration for news organizations everywhere, it is less useful as a model or bellwether for other institutions."

[jusben1369]

I think that's a really valid point and fair observation but perhaps too simplified. Put another way, had the Times failed at creating a successful paywall then all others could be assumed to be doomed to failure. Now that the Times has proven it's successful, can others borrow some or all of their approach? The answer is partially in your quote above I suspect. Just whacking up a paywall is likely not the answer. However, using your deep resources (relative to other sites and bloggers) to create a superior experience can create a sustainable business. Just as the Internet threatened their traditional business it also dramatically increased their reach in other ways.

[AnthonyMouse]

I think people are doing it a disservice by calling it a paywall. There is no wall. Bypassing it is trivial. What it is is an effective donation drive the likes of Wikipedia: You go to the site, you get the content for free, and you get a notice that says "hey, somebody has got to pay for this stuff you're reading, how 'bout you pay your share?"

An actual paywall would be a lot less likely to work, because when people get to a paywall, they can't see what they're supposed to be buying, so they just go away and never come back. By contrast, this "works" because it gives people what they want unconditionally and then having accepted it without paying, guilts them into making a donation. Nonprofits have been running on this model forever.

But the real question is whether it's actually "working" -- the conversion rate to paid subscribers is evidently around 2%. That's pretty bad. And then they call it a success because it makes up 50% of their revenue instead of 20% as was traditionally true, but is that because subscriptions are up or because print advertising has been falling for so long? They only quote the most recent rate of change rather than the long-term numbers, and there may be one of these going on: [http://xkcd.com/605/]. When you first open a new revenue model, you can pretty well expect the first couple of years to have a higher growth rate than the ensuing years. Once everyone is subscribed who wants to subscribe, you have a hard time achieving any more subscription growth. And if subscriptions stop growing faster than advertising is falling, they're right back into the death spiral of cutting costs to save money which reduces readership which loses revenue which induces cost cutting.

[mjfern]

The porous New York Times paywall works because it effectively segments the market. [1]

The first segment consists of customers with a higher willingness to pay that aren't aware of the paywall workarounds or enjoy accessing the Times without futzing around. Who are these readers? Readers with high disposable income, older readers, and heavy readers.

The second segment consists of customers with a lower willingness to pay, who have identified the workarounds, and are willing to deal with the additional steps involved in bypassing the paywall. Who are these readers? Readers with lower disposable income, younger readers, and light readers.

The result of this segmentation is that the New York Times has been able to attract a significant number of online paying subscribers (segment 1), without decimating its overall readership figures (segment 1 + 2). By maintaining its overall readership figures, the New York Times has been able to preserve its online advertising revenue.

------

[1] Since the product is nearly the same for both segments, aside from the steps involved in bypassing the paywall, you might consider this as an example of price discrimination.

[tripzilch]

I never identified any workaround. In fact, I never even identified this paywall. I just have my browser set to throw away cookies on exit, except for a small whitelist of sites I want to stay logged in to (Opera can keep per-site preferences, but even before I found out about that feature, I preferred not to keep my cookies around forever). Assuming that's the "workaround", it appears that I have never read more than 10 NY Times articles per browser session, since they started doing this.

I also keep a rather extensive blocklist of URL-patterns I don't need my browser to load, ever. It took quite a while before I noticed (on a friend's computer, about 1.5y ago) that YouTube makes you watch ads before a video. I actually have no idea how that particular URL-pattern got into the blocklist, since I honestly hadn't seen those ads before. I suppose I was messing around with the webdev tool one day, noticed some resources that seemed unnecessary, I disabled them, videos continued to work fine, and forgot about it.

I realize this places me securely in the second segment, of course.

[biesnecker]

Segments the market into people who know about their browser's incognito/porno mode, and those that don't.

[derleth]

> the steps involved in bypassing the paywall

And to everyone who objects "It's one step!", remember Step Zero:

Knowing it can be done.

Which implies Step Negative One:

Caring enough to find out.

It's hard to take those steps. There are, in point of fact, very likely a huge number of Steps Negative One you haven't yet taken, or are not going to take. I know that's true for me.

Were there worlds enough, and time, perhaps, but not as long as I'm living on the fourscore and ten plus change.

[wangchong87]

You're absolutely right, and it is related to the way in which disruptive innovation works.

Currently, the New York Times is to the news world what mainframe computers were to the computer world. People still pay money for mainframe computers, but only the people at the very top end of the market, given that a mainframe computer is feature rich and expensive.

Similarly, NYT is the most feature rich, extensive and wealthy masthead in the entire news world. People will continue paying for it in the same way that people pay for mainframe computers, but this doesn't mean they haven't been disrupted. The market for other news is far, far bigger and in the coming years will make NYT look like a drop in a vast ocean.