The NYT Paywall Is Working — It’s Keeping People Out

We’re still in the early days of the New York Times (s nyt) paywall, but traffic-measurement firm Hitwise already has some numbers on how the subscription plan has affected the newspaper’s readership. The bottom line? The Times has seen a drop of between 5 and 15 percent in daily readers. That may not seem like much — especially compared with the falloff at some other papers that have implemented more restrictive paywalls — but 15 percent is still a fairly significant decline. And there are signs in the Hitwise data that the NYT may not have fine-tuned its wall as well as it might have hoped, which could have an impact on the long-term health of the subscription strategy.
Hitwise compared the 12 days before the paywall went into effect on March 28th with the 12 days after that occurred, and found a decline in daily visits of between 5 and 15 percent (with one exception on a Saturday, when visits actually were up).

Looking at the total pageviews for the 12-day period as a whole, meanwhile — as opposed to individual visitors — the traffic-measurement company’s analysis showed that pageviews fell by an even larger amount: between 11 percent and 30 percent.

These numbers are interesting in a couple of ways: on the one hand, the New York Times said that it did exhaustive research of its online readership in the year or so it was working on the paywall plan, and that it expected the majority of readers would never hit the wall, since most non-subscribers didn’t read more than 20 articles a month. And yet as many as 15 percent — which would work out to about six million visitors a month, based on the NYT’s estimated overall traffic — are no longer coming to the site, possibly because even the threat of hitting a paywall is enough to deter them.
Obviously the newspaper is hoping that a significant number of those readers will sign up for the subscription plan. But will they? Or are they simply going elsewhere?
The other important element in the numbers is that pageviews dropped sharply, and much more than individual visits, which suggests that visitors are reading fewer articles. Again, while it’s still early, this seems to indicate that readers aren’t sticking around as long or reading as much — perhaps because they are afraid of using up some of their 20 free articles per month. That’s important because “engagement,” or time spent on the site and repeat visits, is a key metric that advertisers look at.
One other interesting data point from the Hitwise analysis: although the New York Times paywall includes a “social media exemption” for links that come from Twitter and Facebook, the traffic-measurement firm said that there was no noticeable increase in traffic from social networks in the two weeks following the paywall launch.

So is the Times paywall a success or a failure? It’s impossible to say based on such limited data, but the traffic drop and pageview declines that Hitwise has pointed out reinforce the bet that the NYT is making: in a nutshell, it is betting that throwing a wall up in the face of non-subscribers will pay off in the long run — not just in terms of subscriptions from those who want to read more than 20 articles a month, but in the form of higher advertising rates paid by brands who want to reach those paying (and therefore theoretically more valuable) customers.
As we’ve pointed out before, one of the goals of paywalls is also to keep readers in, not just to keep freeloaders out: by charging for access to the website, newspapers can protect some of their lucrative print subscribers — who help attract the advertising that makes up the majority of print revenue — by keeping them from cancelling their newspaper delivery and reading everything for free online.
In either case, we won’t really know for some time (if ever) whether those bets are winning or not. And the risk for the NYT is that even if it wins on those fronts, it is still sending a message to many of its readers saying “Go away, we don’t want you.”