Going For It: New York Times Paywall About to Launch

Economics Internet Culture News Publishing Technology

After years of anticipation and public and internal debate, the New York Times has announced that it will put up a web paywall, limiting visitors to 20 free articles a month, beginning March 28. Pricing plans begin at $15/month. Print subscribers will get access for free. The paywall will allow incoming links from Twitter, Facebook, blogs, etc., to pass through, in an attempt to keep the New York Times connected to the vital arena of Internet-based social networking.

Here are a few links that followed the announcement, ranging from the chatty (an interview with Times digital chief Martin Nisenholtz) to the dismissive (Cory Doctorow pointing out how easy it will be to spoof past the paywall) to the substantial (a detailed analysis of the possible financial outcomes).

I am not impressed by the New York Times decision, because I favor free advertiser-supported models for topical and newsy content. I've written about this quite a lot on Literary Kicks -- here, here, here (the last couple got me into a spirited debate with John Williams of The Second Pass, a worthy adversary on any topic), and then again here and here.

My history with this question goes back much further. I became a moderate advocate for the advertiser-supported content model while managing the advertising technology department for Time Inc. New Media in the mid-to-late 1990s. In this capacity, I had the opportunity to meet with Martin Nisenholtz at the New York Times offices. Back then, our Time Inc. content was fully open to the world, while Nisenholtz kept the New York Times behind a free registration paywall: you had to give the New York Times your email address to read the paper online. I didn't favor this model back then, but I admired Nisenholtz's leadership skills and his clear focus on potential commerce strategies, even at the expense of traffic.

Today, a decade and a half later, Martin Nisenholtz is still running the digital show at the New York Times. That kind of longevity (in this insane industry) is an accomplishment in itself. Will the paywall succeed? I don't think so. The big problem is not that hackers will spoof their way through the paywall. It'll be easy enough to do, but this won't have a big impact on the success or failure of the experiment. Rather, the problem is that the Times will lose position and viability among the big content players on the open web, and will not bring in enough subscription revenue to make up the difference.

The best-case scenario for the New York Times -- and this must be their hope-based strategy -- is that other providers of deep content will join them, and together starve the free web of high-quality news and culture reporting. If this were to happen, the Times paywall would prove itself a success. I don't believe this will happen.

But we'll find out soon, and that's the exciting thing about the New York Times announcement. Everybody in the newspaper industry (at least in the USA) has been looking up to the New York Times as the leader in the space, so this experiment will be the bellwether for the industry's future. After all the debate and disagreement, we'll soon have real-world results to study.

Maybe everything I've written about why this paywall is wrong is itself wrong. I doubt it, but we'll all find out soon. This is it, the big one. The future of paid online journalistic content, at least for our generation, will be decided right here.

6 Responses to "Going For It: New York Times Paywall About to Launch"

Le Monde in France has a pay policy, and I don't like it. A lot of people around the world go to the New York Times online for news. I think the pay policy will hurt them.

The point about the New York Times returning to antediluvian gatekeeper mode through this paywall is a good one. But here's one way of framing it: Instead of having people comment upon NYT blog entries, they are PAYING to comment upon blog entries. Do people want to pay $15/month to feel part of the New York Times' brand? Had the New York Times tried this five years ago, before blogs developed into magazines that could legitimately break stories and compete against newspapers, they might have had a shot. But when the discussion on your articles takes place away from your main site, it not only shifts away from the traditional reader relationship to the newspaper, but it sends the wrong message to potential boosters of your newspaper. It's also worth noting that Hugo Lindgren's smart move to citing blogs (previously a no no) in the New York Times Magazine is now all for naught for much of the same reasons.

Here's the question it ultimately comes down to: Do you feel included with The New York Times? Or do you feel that you're being pressured to feed the meter?

What might have happened it the New York Times had introduced a voluntary and flexible payment model? Here's a logical extension from the Nieman article.

1% of present online audience (300,000 digital subscribers) @ $20/month = $72 million/year

Feasible projections?
10% of present online audience (3,000,000 digital subscribers) @ $2/month = $72 million/year
10% of present online audience (3,000,000 digital subscribers) @ $5/month = $180 million/year

Would you be more inclined to pay $5/month for the New York Times? And if you were a newspaper, would it be better to alienate 90% of your present online audience or 99% of your present online audience? And if you were a business, would you rather add $180 million/year or $72 billion/year in revenue?

One of the biggest mistakes here is that the New York Times is making is overpricing its content. If you get the audience to gradually get used to paying $2 or $5/month, then you can hike up the price gradually over time. But if you ask people to pay $15 or $20/month from the get go, then they'll scoff at you when you lower the price later. This seems very much like a Hail Mary that might benefit the short-term, but will obliterate the long-term.

Good analysis, Edward. That's what I thought when I first heard the prices announced on the radio- they seemed too high.

The New York Times is ending its web site. I already avoid all NY Times links like a plague because I never know when their payment page will pop up.

But this is just so asininely stupid that it simply staggers me. If I owned that paper I'd be firing lots o people right about now.

by Claudia on

It's an unpopular idea, but probably financially necessary for them to stay afloat: if they don't want to become more permeable to guest bloggers and reader input, like The Huffington Post is. I think The Huffington Post has the right balance between high standards and reader participation: and it's been very successful with that blend.

by tolmsted on

NPR had some interesting coverage On All Things Considered - discussing the success of pay walls. According to the story, the decision last year of The Times of London and The Sunday Times to put a pay policy on their digital content cut their readers from 20M monthly (unique visitors) to about 100K (54K of which paid specifically for online subscriptions - the rest able to access because they had print subscriptions). It basically backs up Edward Champion's comment. Here's the link:

http://www.npr.org/2011/03/17/134621239/new-york-times-unveils-metered-o...

I agree that $15 a month seems high, but not shockingly so. The kindle edition of the paper is $19.99 a month - and nowhere near as user friendly or interactive as the website (which has color photos, video, audio, easier navigation).

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