Without these kinds of new revenue products, expect circulation revenue growth to slow, perhaps dramatically. One reason is the legacy side of the business. While the Times has impressively priced up print subs, it’s losing about 6 percent of subscribers a year. In the short term, the money is good enough to make those economics work. Over a three-year period, it’s trouble. A potential loss of another 20 percent of print subscribers would result in both reduced high-dollar subscription revenue and a markedly reduced rate base for print advertising. Over time, it will get harder and harder to make up lost revenue by charging a smaller and smaller set of print subscribers more money.
The paywall seems to be helping to make up for their falling revenue, but the collapse of the print subscription base is a problem that will only hurt revenue more over time. Denise Warren (in charge of advertising and digital at the New York Times) needs to figure out how to charge more for online ads and how to reach 1,000,000 digital subscribers. She has less than three years to do it.