Crain’s New York Business has a story by Matthew Flamm about how the Financial Times continues to thrive despite Rupert Murdoch’s vow to “crush” the paper with his newly-acquired Wall Street Journal. The article credits the Times’s survival with its tight focus (whereas Murdoch has expanded the Wall Street Journal to become a more general-interest paper) and “snob appeal”.
Another key to the Times’s success, Flamm reports, is its paywall system:
FT.com’s metered access system, which allows readers 10 free articles each month, has done such a good job of converting visitors to paying subscribers that The New York Times will borrow from the model when its website goes paid next year.
Sophisticated data analysis has also allowed FT.com to hike subscription fees—by close to 20% for a standard package, which rose to $221 annually in July—and still gain subscribers.
Even advertisers find the Financial Times’s approach attractive, because subscribers are considered to be especially loyal readers. “A strong content model provides strong support for advertising,” says Times CEO John Ridding.
It appears that a properly applied paywall can be part of a strategy for a specialized news source to continue to survive. Whether it can hold true for more general sources is still an open question.
Paywalls work for publications like this because they are business expenses and tax deductible. (Subsidized by taxpayers.) The NY Times may not be.
In general, outside of a business context, paywalls won’t work.