Commentary

'New York Times' Extends Paywall Strategy To 'Wirecutter'

The New York Times last week introduced a metered paywall to Wirecutter, the product review site it bought five years ago. The move indicates the publisher sees a way to diversify revenue for another one of its media brands.

Most of Wirecutter’s revenue comes from fees paid by affiliates such as Amazon for referrals to their ecommerce sites. Amid the growth in online shopping, Wirecutter’s revenue has risen steadily since it was founded in 2011.

With the new metered paywall, Wirecutter readers get 10 free stories a month before they are asked to sign up for a subscription that costs $5 a month or $40 a year. The reader revenue strategy is aimed at the site’s heaviest users who are most likely to value its product recommendations.
While Wirecutter is included in the NYT’s all-access digital subscription that costs $25 every four weeks, most of the review site’s readers aren’t subscribers. Among the 12 million readers who visit Wirecutter’s site each month, only about one-quarter of them are subscribers or registered users of the NYT, The Wall Street Journal reported.
The NYT doesn’t disclose how much money it makes from Wirecutter, grouping that revenue in its “other” category, which rose 8.7% from a year earlier to $46.5 million in the second quarter. The company attributed the growth primarily to Wirecutter, whose strength in ecommerce likely offset declines in the NYT’s live events business during the pandemic.
Wirecutter’s site says it doesn’t have any incentive to recommend inferior products. Bad picks would undermine reader trust, and lead to lost revenue when consumers send back products that are unsatisfactory.
As part of its reader revenue strategy, the NYT last month also started charging subscriptions to some of its online newsletters.
Ideally, the NYT can convert the small percentage of heavy Wirecutter users into paid subscribers, as the media company has done with its other products, such as its Cooking and Games content. From there, the NYT can work to upsell readers on all-access subscriptions as it expand its paid readership from about 8 million now to 10 million in the next few years.

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