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,

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.

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.