Archive | April, 2011

Why Online News Revenue will Never Equal Newspaper Revenue

A publisher’s ability to monetize the news ONLINE is different than their ability to monetize the newsPAPER. According to the Newspaper Association of America data at naa.org, the average user spent 1 minute and 12 seconds with online news last month.  That is 0.6% of the 3 hours and 25 minutes an average user spent online in 2010 according to eMarketer.  And when compared to average time spent with the print newspaper, online news engagement is 4.1% of the reported 29 minutes per day of Nielsen Media Research Study of 2006. Of course if lost engagement were not bad enough, the Web has both commoditized advertising rates and set an anchor subscription price of free, further crunching the revenue stream […]

The $195 Logic of the New York Times Paywall

new york times paywall

Here is one way to understand the $195 price of a 12-month digital subscription to the New York Times.  The price bridges the 2010 gap between average revenue per user (ARPU) for print vs. the ARPU for online.  Here is the calculation of the difference. Print ARPU The Newspaper Association of America Trends & Numbers provides details on audience and revenues for US newspapers. Users of print are determined from the print readership which was 152,245,119 in 2010 according to Scarborough Research.  Revenue of print is determined from a combination of the advertising and circulation revenues. The print advertising revenue in 2010 was $22,795,000,000.  While 2010 circulation revenues have not been provided, most analysts expect them to remain flat compared […]

Why Revenue Estimates for The New York Times Paywall Are Wrong

A digital subscription to the New York Times (NYT) is now a minimum of $195/year ($3.75 per week times 52 weeks). Chatter about the possibility of low subscribership and why $40M was too much to pay is everywhere. The primary logic used by the naysayers of the NYT paywall is that not enough people will pay the minimum $195/year. Whether the paywall will succeed or not, only time will tell, however predictions of revenue based on consumer payment is simply wrong. The logic goes something like this.  For consumers, digital news has an anchor price of $0.00 created by years of free access. If a consumer has to pay more, they will take their page views elsewhere. The consequence is […]