The New York Times ignited some controversy with its plans to require paid subscriptions to access content via its Web site—first by taking the Grey Lady behind a paywall, second by announcing unexpectedly high subscription prices for online access…and then by deployed a paywall that was trivially easy to bypass. In reporting its financial results for its first quarter of 2011, however, the company sees a bright spot in its future with online subscriptions: it claims more than 1100,00 subscribers have come on board since March 28, the date the New York Time stated limiting the number of free articles visitors could read for free.
The newspaper noted that most subscribers have opted for an introductory program that offers four weeks of access for 99 for four weeks, rather than the full-priced $15 subscriptions that renew every four weeks. However, the company claims the number of subscribers who renew at the full price has been “strong.”
Overall, the New York Times continues to face the same bleak financial picture facing most print newspapers: as advertisers shift their spending away from newspaper and print media to other formats like online and mobile, newspapers have seen their revenues shrink dramatically. The New York Times says its net income fell 57.6 percent to $5.4 million, a decline of 57.6 percent compared to the same quarter a year ago. Overall revenue dropped 3.6 percent year-on-year to $566.5 million.
The results do not include any income from online subscriptions, since those launched after the end of the first quarter. The company also says it saw a 10.2 percent drop in revenue from online property About.com after Google re-jiggered its search ranking algorithms in an effort to weed out so-called “content farms.”
The New York Times permits individual readers free access to 20 articles per month, with some articles promoted by the paper explicitly excluded from that total. Full access costs $15 per month via Web and smartphone applications, although an iPad application costs $20 per month. An all-access plan runs $35 per month.
The New York Times indicated its overall Web traffic is down 15 percent since it instituted its paywall. The company indicated the drop was in line with its expectations.