July 20, 2011
As a result of The New York Times paywall, Quantcast shows traffic is down from about 20 million uniques to a bit under 16 million uniques and page views have dropped from about 150 million to around 120 million. While Quantcast is estimating traffic and not measuring it directly, this is a fast downward trend for the paper of record.
The New York Times knew they’d lose traffic by implementing their paywall, but what do the numbers really show?
Uniques are dropping at the same percentage as pageviews. They’ve lost about 20% of their uniques and 20% of their pageviews. This belies a very serious problem. The promise of the paywall was that while pageviews would drop since people would hit the paywall limit, uniques should have stayed about the same since users have twenty free articles to take advantage of.
There a few options for why this might be:
1. Uniques are down because people are afraid to spend their pageview quota going so far as to not go at all in a month.
2. People are seeking sources for their news on sites that don’t charge at all.
It seems to suggest that in a short period of time, The New York Times has sacrificed their influence (and this was in the period of Anthony Wiener blowing up his career, which was both a salacious local and national story).
The Amazon Comparison
When Amazon announced free shipping for most products in 2001, it was a huge deal. Sales jumped across the board except for one country where it turned out that due to a rounding error, shipping remained some tiny nominal fee. That tiny fee kept sales exactly the same. They removed the fee and sales jumped to match the performance of every other nation.
The New York Times faces a similar problem. Users are clearly afraid to go to their site. Is this story really important enough for me to click on it? What if something I need to read about happens next week? What if I’m already at my limit? It’s a mental tax. Four million people last month who ordinarily would have visited just didn’t show up. And that had nothing to do with people hitting their paywall limit. Like Amazon, a small tax has a large suppressive effect.
At OwnLocal, we’ve maintained for some time that there are better solutions than paywalls. This apparent drop in online readership confirms it. Attention and audience are worth money and at best this is a game that results in a much less influential news organization. Other newspapers need to be very careful following this path. Most don’t have the clout or the truly serious reporting that the Times does. If The New York Times hasn’t figured this out yet, there’s absolutely no sense in following their example.