NY Times introduced pay wall system and the other competitors were keen to know whether it will work or not and is it for long term or short term

1. Case summary
In 1996 , The Times made a first experiment of charging subscription fees of $35 for having access to
its online content but just to the overseas users but this did not worked so it was abandoned .In 2006-
2007, The Times website launched Times Select. The online subscribers of The Times Select increased
over time but finally fell (Exhibit 9). Before that, for its entire existence The Times website was free to
access by domestic users. There was a charge of $49.95 per year if someone wishes to read some noted
columnist but this model also didn’t work. Finally in the year 2011 The Times launched new paywall
model after a proper research in which the users if cross their permitted quota of 20 articles per month ,
they will have to pay some fees to subscribe for more after. Other news sites also launched the paywall
system. It worked for some like The Wall Street journal which receives over 15 million unique visitors
every month but did not work for some like The Times of London. Being the leading global and
multimedia company, when The Times launched paywall system on March 28, 2011 every other
competitor was keen to see the reaction of the online readers and whether it will get subscribers or not?
Although the company’s senior executives were optimistic regarding its acceptance by the audience but
still it was to be seen that whether it is sustainable for long term or not ?
Paywall strategy
The New York Times launched the new paywall system in which there will be free quota for its users. It is
a freemium model according to which 20 articles were free for the users to and if the user wants to read
more articles, he has to get online subscription for the same. Before launching this new paywall. They
had a great debate among themselves because they had 4 broad options to choose from. Those were all
or Nothing, Exclusive content, Metered system and Device Specific Offer. Some agreed to it because the
engaged readers will be ready to pay to subscribe for more and the casual readers will be satisfied with
20 articles. On the same hand some criticized this model as charging a penalty to the engaged readers.
Along with this there was also another option that those readers who came in through google were
restricted to five articles per day over and above 20 monthly allotted articles whereas those who came
from social media websites like Facebook, twitter had no such limits.
The average price charged to digital readers was $4/week. It entirely depends upon the device that a
reader is using to have access to the content.
To promote this paywall system, The Times also partnered with auto manufacturer Lincoln to provide
free subscription to the heavy users of the website until the end of 2011.this campaign was carried
forward on a large scale.
Till Feb 2012, The Times got 390000 subscribers which was really a good number (Exhibit 12) and the
revenue from digital subscribers was 11% of the circulation revenue which is a great number.
But at some point of time it can also be said that online reading had a cannibalization effect on the print
media of The times because out of the $81 million revenue that The Times received in the year 2011,

2. only $21 million was from unique visitors. Rest all was from the print media audience who preferred
digital over print. The print subscription also declined from year 2007 to 2011. (Exhibit 4)
Leaky vs Bullet Proof Paywall
System
Under leaky system , as mentioned in the strategy part that those readers who came in through
google were restricted to five articles per day over and above 20 monthly allotted articles whereas those
who came from social media websites like Facebook, twitter had no such limits. This system was
followed by The Times. The Times tried to generate additional revenue by creating a social buzz through
his leaky paywall system. Whereas other newspapers like The Wall Street Journal opted for the bullet
proof system according to which if the user has not registered to the website, he cannot have access to
any article.
The bullet proof paywall system is better than the leaky due to following reasons
1. The readers who are directly visiting to the website will feel cheated because of this Leaky
system if they are not aware of this option and in this way company might lose its loyal readers.
2. Those who do not want to pay for subscription but want to have access to the articles will
somehow find a way to get free access through this leaky system. In this way the company’s
sole purpose of earning revenue will not be fulfilled.
3. The users get confused of what they are getting free and what is being charged, so it will not be
much appreciated by the readers.
4. 17.5% online traffic to the website was from google and rest from others, this shows that only a
few subscribed directly which is a kind of loss of revenue.(Exhibit 10)
Whether digital and print
media are complement or
substitute
As per the case, the online media is not a complete substitute of print media. Although it had some
cannibalization effect .The print subscription fell with the passage of time from the year 2007-
2011(Exhibit 4). On the other hand the paid digital subscription to the online content increased. (Exhibit
12). This can be due to shift of readers from traditional method but if taking on the other side the 70%
readers of print media are also going for online media . This proves it to be complement.

3. Apart from it if taken on advertising part, the people are shifting from print media to online because
they can have greater access there. The revenue from print media is falling and online is increasing.
(Exhibit 6).
So, conclusively it can be said that neither they are pure substitutes and nor complement to each other.