As most premium publishers continue to scramble around for a sustainable revenue model, the dominant attempts at monetisation have either involved paywalls (complete or partial), or making all content available for free. However, the New York Times may have just created a new version of the partial paywall, where only video content — i.e. the type of content capable of delivering high CPMs — sits outside of the paywall.
In making the video content available for free, the New York Times also appears to have found an additional revenue stream by partnering with Acura (an auto manufacturer) and Microsoft, who are credited with sponsoring the content via an interstitial on the homepage (see below). The companies also appear to have been given first call on pre-roll ads.
It’s no secret that the New York Times has — like the majority of traditional publishers — struggled with declining display CPMs, a decline in print sales/subscriptions, and the rise of programmatic buying. But is the video-paywall hybrid model a solution? While it’s too early to say with any certainty, here are some of the pros and cons of such a model:
– Premium video CPMs remain high. Placing video behind a paywall because your display inventory is in decline might be throwing the baby out with the bathwater, so it makes sense to make hay while top tier video inventory continues to be relatively scarce..
– Having your content outside of a paywall makes it significantly easier to deliver video at scale. Display impressions are considerably easier to generate and multiple ad units can be added to each page, but with video it’s more difficult to deliver the kind of volume required to make it attractive proposition to advertisers. Even publishers with the traffic of the New York Times might struggle to offer attractively high volumes of video impressions when the inventory is behind a paywall.
– When content is placed behind a paywall, it becomes almost invisible online. But now visitors are more likely to share the content and exposing others to the NYT brand and to the possibility of being converted into a paying subscriber. So the NYT doesn’t simply disappear for non-subscribers
– Original video content could be the key reason people are willing to pay for a subscription and what differentiates a publisher from the competition and be what drives subscriptions. Written news stories, for example, can often be sourced elsewhere.
However, it does depend on the nature of the video content and of the readership, and it seems unlikely that the New York Times would have set out on this new path without doing a little market research first. From the outside, it seems reasonable to suggest that the average New York Times subscriber is primarily there to enjoy the quality of the writing and commentary and that the video is more of a bonus than a priority.
However, if you take News International’s decision to buy the rights to the highlights for Premiership football, there’s every chance that having access to that exclusive content could be the reason someone subscribes to The Sun.
Publishers Will Be Watching Closely
The premium publishing world always takes a huge interest in what the New York Times is doing, but this looks set to become one of The Grey Lady’s most closely watched attempts at revenue generation. Also watching will be the various video ad tech players who have focused on the premium end of the market and who have been slightly unnerved by the talk around top tier content disappearing behind paywalls.
Earlier in the month the New York Times received a Pulitzer Prize for ‘Snow Fall: The Avalanche at Tunnel Creek’, which you view below: