And we were amazed by reports that Stephen Brill actually expected 10% to 15% of newspaper readers to pay up for the paywall he’s building for various newspapers (still none confirmed, as far as we know). A reporter over at Slate seems to have taken things to a new level. John points us to the back of the envelope analysis/calculation of the NY Times’ decision to put up a paywall that appears to have some highly questionable assumptions. The biggest one is that 66% of readers will pay. Yes, 66%. Oddly, this statement comes right after the reporter’s claim that, “a large percentage” of readers probably wouldn’t pay — but he seems to assume that “large percentage” is just 33%:
First of all, a large percentage of these readers land on these sites though search engines, and therefore are not likely to consume a lot of pages. Such visitors, about a third of the total audience, must be removed from the pool of readers likely to pay for content.How much would people pay? According to a Boston Consulting Group survey, readers would agree to pay $3 per month on average. Interestingly enough, the BCG found the upper limit to be $6 for the “heavy print consumers” category.
Coming back to the Washington Post, using the remaining 66 percent of total users likely to pay for content (7.34 million unique views/month), the expected revenue could be considerable.
I’d argue that getting even 5% to pay, as one recent study suggested, may be wildly optimistic. 66% is downright delusional. While the pricing is clearly much higher, you would think that the recent example of Newsday getting a grand total of 35 subscribers to its paywall would be telling. So, it’s difficult to take the rest of the analysis seriously, when it kicks off with such a bizarre assumption.
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