New York Times Newspaper Paywall - Case Study Example

New York Times Newspaper Paywall Situation overview New York Times is an American newspaper founded in 1851 and has attained high success since it has won 112 ‘pulitzer prizes’ due to its high readership and informative content. The company implemented the paywall system that was aimed in increasing revenues through online subscription. Paywall is designed to streamline online business and monetize digital content through creation of digital barriers for the premium content that require readers to make subscriptions.

The system creates additional revenue streams for newspaper companies and enhances the brand loyalty. The design of paywall New York Times used a device-specific and metered system that allowed the readers to access up to 20 articles a month for free, but readers would be charged to access more articles except for the front page that was free all the times for all the users. The number of free articles was made to ensure active readers remain engaged and promote the social buzz generated by the articles.

The strategy entailed differentiated pricing strategy that entailed three tiers depending on device used by the reader to access the content and introductory offers and discounts for the customers. The digital pricing was cheaper than print home delivery, but the price was higher than that charged by other newspaper companies’ digital content. The distinctive pricing is essential in order to cater for the unique needs and amount of content accessed by the user (Kumar, Anand, Gupta and Oberholzer-Gee 7).

The ‘leaky wall’ design accommodated users from social networks and search engines. Readers from Google search were restricted to five-articles per day limit over and above the 20 monthly free articles (Kumar, Anand, Gupta and Oberholzer-Gee 6). In addition, readers who came in from social media sites like Twitter and Facebook faced no links if the articles were linked directly from those social media sites. Paywall is a complement of the print newspaper since it provides additional revenue stream and enhances the audience.

Some readers will prefer the print newspapers especially advertisement companies. Troubles of the Newspaper industry The newspaper industry is in trouble due to decline in the overall circulation and decline I the traditional sources of revenues such as subscription, classified advertising and retail. Accordingly, the nature of the industry makes it difficult to reduce editorial staff, production and distribution costs since they are fixed. Another challenge that is evident in the newspaper industry is the rapid advancement of digital content distribution technologies that have disrupted the traditional channels.

For instance, the industry has lost the jobs portion to digital platforms like monster.com. Furthermore, the revenues from the online advertisements are insufficient to compensate for the decline in print circulation revenues.Transition to digital and Times target market Times must not actively manage a transition from print to digital since the print newspaper is associated with high production and distribution costs. The digital media allows for faster distribution and reduces the distribution costs associated with home deliveries.

The newspaper must transit to digital in order to counter the competition occasioned by growth of other media outlets such as blogs, online web platforms for advertisements and jobs and also take advantage of the increased online digital newspaper subscriptions in the market. The company should target the college students looking for educational materials and informative articles, the middle class citizens who have developed a reading culture and techno-savvy youths who are eager to access news (Kumar, Anand, Gupta and Oberholzer-Gee 9).

Evaluation of success of the paywall strategy The paywall was a good strategy since about 70 percent of the print subscribers registered for the digital access and enabled the company to remain balance between the print business and digital business. The paywall was a new revenue stream that was supported by high web traffic from Google sites, Yahoo sites and social media networks. From the statistics, the paid digital subscribers after nine months of launch reached 390,000 in December 2011 thus signaling a growing demand for digital news articles.

Accordingly, New York Times had the highest online Newspaper Web traffic and the highest subscription rates in US dollars for online content.Work cited:Kumar, Vineet., Anand, Bharat., Gupta, Sunil and Oberholzer-Gee, Felix. 2013. ‘The New York Times Paywall’, Harvard Business School Review, January 31, 2013. Pp 1-19.