The New York Times Paywall
Posted: 8 May 2012
Date Written: April 2, 2012
On March 28, 2011, The New York Times website became a restricted site where most of the content was protected behind a "paywall." Users who exceeded the limit of 20 free articles per month were required to pay for either a digital or print subscription. The newspaper industry had been suffering from revenue declines over the past decade, and the transition to digital media was difficult to navigate. Revenues from online advertising were not sufficient to replace the loss of print revenue, and many publishers had explored charging readers for content, with mixed success, where specialized sources like The Wall Street Journal successfully using the model, but several other general news sites had failed. Newspapers and content creators in general were very interested in understanding whether transitioning to the paywall at the most popular news website would succeed, and whether it could become a blueprint for future success as a sustainable business model. There were several difficult issues to examine in determining the digital strategy for The Times. Would consumers remain as engaged with a site protected by a paywall? Would advertisers react positively to such a move that walled off readers? Would readers value both the print and digital versions of the content, or would it become necessary to create new content? The Times had several choices in designing the paywall, including determining the digital content, pricing, as well as how to interface with readers of secondary news websites like blogs that posted links to news articles. Should they design a "leaky" paywall where determined users could easily slip through, or a "bulletproof" paywall like the Financial Times had done, where users had to pay before they could access any content? What choices would provide the foundation for a successful business model?
Learning Objective: The purpose of this case is to help understand the key issues in transitioning a content business from the current print medium to the future digital medium. It will involve a deep exploration of how managers must understand product strategy to align the value creation process with the characteristics of the medium or channel, while keeping in mind the landscape of collaborators and competitors has been altered significantly by digital technology. How should a manager determine the content across multiple media? Should they design the product for complementary value creation across media, or are they best thought of as substitutes? Should the company accelerate the transition to digital or try and bolster the value for both media? This case has been taught in the Digital Marketing elective course at Harvard Business School. It would also fit well in elective courses on Product Strategy or Technology Strategy.
Suggested Citation: Suggested Citation