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New York Times metered paywall: $100 million a year?

The Business Insider posted a short article today on how a former Wall Street Journal publisher estimates that the NYT stands to make $100 million on its metered paywall from subscribers (in addition to the $150 million it rakes in from digital ads.)

So, where does that $100 million come from? Not sure. But I have a guess. I believe Gordon Crovitz, the former WSJ publisher, is looking at the New York Times experience with the "Times Select" offering, which charged $50 a year several years ago for columnist and other specialized content.

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Times Select drew 227,000 subscribers. Now, to reach Gordon Crovitz's rosy $100 million expectation, the new NYT metered paywall, on average, would have to enroll 238,000 paid subscribers in the "all digital access" plan, at $35 a month -- or $420 $455 a year (a Times spokeswoman called me to say their billing schedule of once every four weeks works out to be higher.)

But wait, there's a big difference between $420 $455 a year and $50 a year. Not many people have the deep pockets for a $420 $455 a year digital subscription to anything. So let's take the low end of the NYT's pricing scheme.

The cheapest rate for access to Nytimes.com and its various smartphone apps is $15 a month. Or $195 a year.

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But again, Times Select charged $50 a year, whereas the entry level digital subscription charges $195 times a year. To make $100 million in revenue just off the barebones digital subscription, the NYT would have to get 555,555 people to pony up $195 a year.

Again, Times Select drew in $10 million a year in revenue with 227,000 subscribers.

Sorry, Crovitz, I don't see these numbers working out in the New York Times favor. My bet is if the NYTimes even makes $50 million on this paywall approach, it will be darn tootin' lucky.


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