1. If you can expect to convert people from user to digital subscriber at a rate of around 1 per cent, then you need a lot of users to begin with.
Martin Nisenholtz, the business executive who started NYTimes.com, has told my classes that giving away Times content online was not an original sin but a foundational necessity, for The Times needed to compete with other new players and to build market share. In fact, being free allowed The Times to become a truly international brand with a huge audience: almost 60 million monthly readers online vs. fewer than 1 million buyers daily in print. Having that large an audience is what made it possible for The Times to put up its meter, for its conversion rate from online user to digital subscriber is only a bit over 1 percent, but 1 percent of almost 60 million is a lot of subscribers.
2. People read far fewer stories than we might imagine. At lesser newspapers ‘an average of 3-4 per cent of users hit the paywall and about half a per cent of those will pay’.
When it started to charge, The Times allowed users to see 20 stories a month for free (with various additions, including links from social media) before encountering the meter and getting hit up to pay up. But not enough people hit the wall and got the pitch. The Times lowered the barrier so customers would see only 10 stories a month for free. That means the vast majority of The Times’ audience doesn’t read so much as one story every three days. That is a shockingly low level of engagement for the pinnacle of a profession that considers itself vital to the maintenance of democracy and society. For lesser newspapers, the numbers are worse. According to Jeff Hartley, vice president for consumer revenue at the Morris Publishing Group, experience with Press+, the leading provider of paywall services, shows that on average 3–4 percent of users will come often enough to hit the wall and about half a percent of those stopped will pay.
Read the rest here.