Approximately 224,000 people were paying to get through The New York Times' fledgling digital paywall at the end of June, the New York Times Co. said today as it released its second-quarter earnings. Another 100,000 are receiving free unlimited access to the Times Online and Times smartphone apps courtesy of a promotion by Ford Motor's Lincoln.
Circulation revenue for the New York Times Media Group increased 1.6% from the second quarter of 2010 after declining for the three previous quarters.
The paywall, introduced March 28, is actually a meter that tracks how many articles visitors read. More than 20 articles a month requires home delivery or one of several digital-subscription packages, the cheapest of which provides unlimited access to the website and a smartphone app for $15 every four weeks. A package including the site, smartphone apps, the paper's (troubled) iPad app and the ability to share access with a family member runs $35 every four weeks.
The 224,000 digital subscribers cited by the Times this morning includes people receiving the introductory rate of 99 cents for the first four weeks. It does not count the 765,000 people who have activated the digital access that comes with their home-delivery subscriptions.
Digital ad revenue, which could be undermined if the pay meter discouraged enough visitors, increased 15.5% at the company's News Media Group on strong growth in national display advertising. That's a little better than the group's 14.9% increase in digital ad revenue in the first quarter, by comparison, but below its 20.3% jump in the quarter before that .
"The positive consumer response to the digital subscription packages is a strong indication of the value that users place on our high-quality news, analysis and commentary," Janet Robinson, president-CEO of the Times Co., said in a statement. "Our digital model exemplifies our growing ability to capitalize on secular trends that show consumer willingness to pay for content across multiple digital platforms."
"We are pleased with how this initiative is rolling out, in particular performance of key metrics, including the volume of paid digital subscriptions, overall traffic rates and digital advertising revenues," Ms. Robinson said. "We also continued to post solid year-over-year gains in digital advertising revenues at the News Media Group in the second quarter. In addition, during the quarter the rate of home-delivery circulation declines slowed moderately, as we observed an uptick in new home-delivery orders and a decrease in attrition following the launch as print subscribers of all frequencies receive all digital access at no additional cost.
The Times also said it has 57,000 subscribers to replica and e-reader editions for devices such as Amazon's Kindle.
Total Times Co. revenue declined 2.2% to $576.7 million as ad revenue fell 4%, circulation revenue held flat and other revenue slipped 1%.
The company reported an operating loss of $114.1 million in the second quarter -- partly due to a write-down of $161.3 million to reflect the decline in value of its News Media Group and particularly its regional newspapers such as the Tuscaloosa News -- compared with an operating profit of $60.8 million in the second quarter of 2010. Excluding depreciation, amortization, severance and special items, the company had an operating profit of $82.9 million, down from $92.6 million in the second quarter of 2010.
In addition to The Times and The Tuscaloosa News, the company owns About.com, the Boston Globe, the International Herald-Tribune, the Worcester Telegram & Gazette, the Sarasota Herald-Tribune in Florida, the Press Democrat in Santa Rosa, Calif., and other papers.
