Last week, The New York Times Co. announced they were putting the Wirecutter product review site behind a metered paywall. Unless they are all-digital-access subscribers to The New York Times’ news product, users of Wirecutter will have to pay to get unlimited access to more than 1,200 product reviews, deals coverage and other guides. A standalone subscription to Wirecutter is $5 every four weeks or $40 per year. The New York Times all-access-digital and home-delivery subscribers will continue to get access to Wirecutter via their subscription.
“While Wirecutter will continue to be an affiliate business, diversifying its revenue sources will help ensure its long-term success and independence, as well as unlock additional business value that can be invested back into the business to serve subscribers,” said David Perpich, head of standalone products for The New York Times Company, in an August 31, 2021 news release.
“This change is also a continuation of The Times’s push to invest in product experiences that enrich subscribers’ lives beyond reading the news, following on the heels of NYT Games and NYT Cooking,” added Perpich.
Linda Li, general manager for Wirecutter, commented on the change in business strategy.
“Wirecutter’s success is due to its singular focus on helping our readers with integrity, transparency, empathy, and rigor. With the launch of subscriptions, we’re excited to further this mission so that Wirecutter can become even more indispensable to our readers’ lives,” Li said.
Founded in 2011, Wirecutter was purchased by The New York Times Company in 2016 for more than $30 million. It was part of a package deal with review site Sweet Home. The Times combined the review sites in 2017 under the Wirecutter brand. Editorially independent, Wirecutter researches, tests and recommends products, including everything from bedding and board games to portable projectors and pressure cookers. Wirecutter receives affiliate revenue on purchases made through its affiliate links on the site.
Part of overall business strategy
The New York Times has a goal of 10 million subscribers by 2025. Just after the end of its second quarter of 2021, The Times had grown to more than 8 million. Though the media organization is well on its way to its goal, growth is slowing, and its business strategy is evolving. Putting Wirecutter behind a paywall may be a way for The Times to encourage frequent users to subscribe to the company’s news product, while also earning standalone subscription revenue.
In the second quarter of 2021, Wirecutter affiliate revenue was part of total “other” revenue of $46.5 million, an 8.7% increase over Q2 2020 “other” revenue of $42.8 million. That total also accounts for revenue from licensing, headquarters leasing, commercial printing, retail commerce, TV and film, student subscription sponsorship revenue and live events revenue.
We aren’t quite sure what to make of this. If The Times is receiving affiliate revenue from products purchased through Wirecutter affiliate links, why would they put the site behind a metered paywall? This essentially blocks frequent users who are nonsubscribers from reading reviews and possibly buying products that have been reviewed and recommended by Wirecutter. It doesn’t seem like $40 a year would make up for the potential affiliate revenue The Times could be earning from those readers, unless the affiliate revenue they are receiving is less than anticipated.