New York Magazine is reporting (good piece by Gabriel Sherman) that the NYT has decided to move to a paid-online site model – a drastic shift away from its current free website. The article explains the debate between the two sides within the Times – those urging that it has to somehow get to a paid online subscriber base, and those arguing that if it can hang in there, it will emerge with the largest global news site audience, which will enable it to charge a premium advertising price that cannot be charged now:
The decision to go paid is monumental for the Times, and culminates a yearlong debate that grew contentious, people close to the talks say. In favor of a paid model were Keller and managing editor Jill Abramson. Nisenholtz and former deputy managing editor Jon Landman, who was until recently in charge of nytimes.com, advocated for a free site.
The argument for remaining free was based on the belief that nytimes.com is growing into an English-language global newspaper of record, with a vast audience — 20 million unique readers — that, Nisenholtz and others believed, would prove lucrative as web advertising matured. (The nytimes.com homepage, for example, has sold out on numerous occasions in the past year.) As other papers failed to survive the massive migration to the web, the Timeswould be the last man standing and emerge with even more readers. Going paid would capture more circulation revenue, but risk losing significant traffic and with it ad dollars. At an investor conference this fall, Nisenholtz alluded to this tension: “At the end of the day, if we don’t get this right, a lot of money falls out of the system.”
But with the painful declines in advertising brought on by last year’s financial crisis, the argument pushed by Keller and others — that online advertising might never grow big enough to sustain the paper’s high-cost, ambitious journalism — gained more weight. The view was that the Times needed to make the leap to some form of paid content and it needed to do it now. The trick would be to build a source of real revenue through online subscriptions while still being able to sell significant online advertising. The appeal of the metered model is that it charges high-volume readers while allowing casual browsers to sample articles for free, thus preserving some of the Times’ online reach.
At the end of December, I stepped down as the chair of a nonprofit media assistance organization aimed at developing world media companies and their businesses, so I pay a lot of attention to media economics. Bloggers, especially on political blogs, tend to assume that the problems of a NYT trace back to politics, but that is far from the case. The economic problems are baked into the newspaper model, to start with, and the NYT has special economic problems all of its own. But also bear in mind that the Times is actually in (somewhat) better shape than an awful lot of newspaper companies in the United States – i.e., it is not in bankruptcy. Also, the Times website is magnificent – the closest thing I’ve ever seen to a real newspaper “feel” online. I love the WSJ site, too – but it doesn’t feel like a newspaper the way the Times site does.
I have thought a lot about the Times’s business dilemmas, and really don’t know what I think would work even in principle. I’ve linked here to a Pajamas Media piece talking about dropping our ($600 a year in DC) home subscription – but since then I find my New Yorker wife re-upped, only after, I am happy to say, the Times offered a price below home delivery of the Washington Post.
Soronel Haetir says:
There is no way I’d pay $600 for a newspaper subscription. Just not going to happen.
January 17, 2010, 9:21 pmKenneth Anderson says:
Are you married to a New Yorker who, when I proposed that we should take the job in DC, burst into tears and told me I was taking her away from … life itself?
January 17, 2010, 9:25 pmJohn Stephens says:
Has this ever worked? Has any newpaper or magazine ever made money by charging for online content? If so, why doesn’t everyone do it? And if not, what makes the NYT think they’ve got the magic touch?
January 17, 2010, 9:29 pmKenneth Anderson says:
It works for the WSJ, sort of and so far. But for very, very particular reasons – it is not a general content newspaper, but a business paper in which many of the readers want it for the reasons I want it online besides my paper copy – I want the data bases. The WSJ’s business data bases are well organized in a way that has no peer – not the FT, Economist, or anything else. And the NYT is not really a newspaper as such any more – it has turned itself into a daily magazine, which is, frankly, something of a oxymoron.
January 17, 2010, 9:32 pmAlast says:
There is nothing I want in the NYT that is not reproduced, rewritten, syndicated, or adequately covered independently by some other source that is not behind a paywall.
January 17, 2010, 9:38 pmCrunchy Frog says:
The NY Times for a while had exactly opposite the online model of the WSJ. Under Times Select (how wonderful it was, for a while), the opinion writers were behind a paid subscription wall which limited their influence greatly, while the hard news was free. Thw WSJ does things the other way around.
January 17, 2010, 9:40 pmD.R.M. says:
The NYT comes closer to having the necessary amount of highly-valued unique coverage to charge than any other major general-content paper in the country, but it’s not close enough.
January 17, 2010, 9:44 pmKenneth Anderson says:
TimesSelect was not so much stupid as an act of hubris – really, only the Times would have assumed that people would pay for opinion. The assumption was that Tom Friedman and Co. were just so important, they represented the true value added of the newspaper. The hard news was just a loss leader. Wow.
The WSJ understands that it is a hard news business paper wrapped around a conservative opinion magazine. Because it keeps those two functions very separate, it is able to appeal to two distinct audiences – business people and conservatives. The Times doesn’t really have the option, not with having turned its hard news pages into magazine journalism.
January 17, 2010, 9:46 pmsteve says:
The Times, like every other newspaper, has no good choice. They’re not going to succeed charging for content if someone else is willing to give away similar content for free. And yet an online advertising model isn’t going to work either, as unlike in print (and TV), advertisers can track the profitability (or lack thereof) of online advertising and advertisers aren’t going to take in enough revenue from online ads that will support paying the dollars the NYT needs to support their news operation.
January 17, 2010, 10:08 pm30yearProf says:
Nothing there that I’d pay for.
January 17, 2010, 10:20 pmCato The Elder says:
Finally! The death of the NYT.
January 17, 2010, 10:28 pmSoronel Haetir says:
No, for which I am ever thankful. If I were forced to live in a place like either it would be only a matter of time before I went on a shooting spree despite being blind and in a wheelchair. If you can see your neighbor’s house or hear their car they are too damned close.
January 17, 2010, 10:32 pmOctavian says:
I won’t pay. Sorry, but there are plenty of other available news sources that don’t charge, and some of them are even better than the NYT.
January 17, 2010, 10:42 pmCornellian says:
Hard to see how any newspaper is viable these days – they’re nearly all failing. It may be that the cost of distributing all those papers makes it no longer a viable business model.
January 17, 2010, 10:44 pmjimM47 says:
In our local metro daily I constantly see “New York Times” in the byline. Will other papers stop making those stories available on their websites? If not, then why do they expect NYTimes.com to pay for them. If so, then don’t they significantly diminish the value of their wire service at the same time?
January 17, 2010, 10:54 pmdrunkdriver says:
I’ll probably pay, because it’s easily the best in the country, but I wonder how many others will. This will be very, very hard for them to pull off, in part because they’ve been free for so long.
Also, piracy will be hard to beat. When they had their subscription wall there were sites that would re-post their articles.
January 17, 2010, 10:59 pmAnonymous says:
It’s not just piracy that is the issue. Passwords can be shared quite easily. You don’t need to pay for the WSJ online, you just need to know someone who does. Soon, that will be true for the NYT as well.
I suppose that is as true for the print edition, since you only need one subscription to be passed around among many. But an ad-supported site is not subject to that problem. Each eyeball gets counted separately, and all of the eyeballs (or clicks) go into your revenue stream.
January 17, 2010, 11:37 pmBrian G. says:
I am sure this will be another great decision by the powers that be at the NY Times. After all, just look at their recent track record of finanical success.
January 17, 2010, 11:44 pmSoronel Haetir says:
Password sharing doesn’t work that well when a site chooses to use I{P tracking. There are a couple sites I belong to that do that, limiting users to three addresses or so.
January 18, 2010, 12:26 amneurodoc says:
First, both the newstand and home delivery price are absurd, and if and when they refuse to renew me at the 50% promotional price, I will stop taking home delivery and read it through our county library’s online service.
Second, when I look for recent NYT articles through Google, I don’t find them. So, I go to nyt.com and usually manage to come up with them, though I sometimes must root around for what I am after. Is the NYT blocking searches via Google?
Finally, I don’t think I have ever seen writing in the NYT as treacly stupid as what appears in the Sunday Vows section. My goodness, it isn’t up to the level of a high school paper. Perhaps they will add a horoscope column to attract more readers.
January 18, 2010, 1:49 amneurodoc says:
Here, see if you can read all the way through this:
http://www.nytimes.com/2010/01/17/fashion/weddings/17vows.html?scp=2&sq=vows&st=cse
January 18, 2010, 1:51 amMurgatroyd says:
And for only $600 I can read 52 of those a year? Wow! Sign me up!
January 18, 2010, 2:42 amLanette says:
The feel of turning the pages of a newspaper in one hand, while the warmth of your morning coffee lingers in the other, is worth the price we pay (unless of course it goes up one more cent then to hell with the paper and the latte).
January 18, 2010, 3:09 amNoah David Simon says:
People won’t pay for more news. People will pay for filtered news. a service that is customized to give us the information we need because it knows us is the future.
you can’t go chasing down bloggers who quote your text. the ability to reference online is a journalistic standard. People will just copy the text into a place that it can be shared and that will be that. NYTimes doesn’t see the light at the end of the tunnel for advertising because they don’t believe they have a mainstream future representing the English speaking world’s view.
by the way… I just quoted your blog… ooops
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January 18, 2010, 4:17 amBC says:
I’m thrilled the Times is adopting a paid online model. If there’s one thing that will bring the readership numbers back up, it’s a paid, online model.
January 18, 2010, 6:00 amBrett Bellmore says:
But the NYT IS filtered news. It’s just filtered on the basis of what they want you to know, rather than what YOU want to know.
January 18, 2010, 7:26 amfgmorley says:
The problems for them, as far as I’m concerned, are primarily their political bias and fact obfuscation on political issues. I simply do not trust them any longer. I used to subscribe many years ago, but don’t read NYT now when it’s free online. My issues aren’t germane to the economic model discussion, but I wonder how many others agree.
January 18, 2010, 7:49 amA. Zarkov says:
I understand your wife’s reaction– it’s a common attitude among New Yorkers who have known nowhere else, and think they live in the center of the universe. I was born, raised and spent a big fraction of my adult life in the Big Apple before I left, and well remember the adjustment process.
Irving Kristol moved to DC from NYC in the late 1980s and wrote about it The New Republic. He quotes the WSJ:
Of course DC was going through rough times in the late 1890s and early 1990s with a sky high homicide rate of 90/100k and a lot of out migration to the MD and VA suburbs. Kristol also quotes Fred Barnes who wrote:
Nevertheless Kristol goes on to extol the virtues of DC over NYC in terms of contemporary times. He says Washington has grown more interesting while New York much less so. In other words, NYC is not what it once was. Today one needs incredible amounts of money to merely live comfortably let alone in luxury. I know people in NYC who make better than 250k and yet they live like blue-collar workers did in the 1950s. Even an expensive place like DC and the immediate suburbs like Fairfax are almost cheap compared to NYC. Although I suspect that has changed somewhat over the last year.
January 18, 2010, 8:17 amFedya says:
A. Zarkov quotes Irving Kristol quoting Fred Barnes:
Replace “Washington” with “New York” and the description would seem to fit, both now and 20 years ago.
New York, New York: the city so arrogant they named it twice.
January 18, 2010, 8:41 amRicardo says:
It’s possible. The Economist may also be blocking Google since their articles don’t tend to come up in any Google search I do.
There was a funny account of Rupert Murdock ranting in public about Google “stealing” material from News Corp a few months ago. Several people pointed out that Rupert is perfectly free to tell his underlings to block Google from indexing any News Corp content if he wants. Whether he actually followed through and blocked Google or whether he was just being a blowhard I don’t know.
January 18, 2010, 8:43 amSun Tzu's Nephew says:
Thats right. Yet another nail in the coffin, driven in by the moronic ‘punch’.
January 18, 2010, 8:55 amAnton says:
They tried this with their Op-Ed page a while back, and the result was that no one read their writers. I predict the same here. Of course, no serious person reads the New York Times even when it’s free, but that’s another subject altogether…
January 18, 2010, 8:56 amrarango says:
Fortunately I get the Sunday crossword thru my local paper so this is a non-issue for me–I am happy to see the NYT trying to repeal laws of supply and demand, however–they should consult with their nobel laurate op ed columnist on the possible economic consequences however
January 18, 2010, 8:56 amSun Tzu's Nephew says:
and get ink all over your hands? No thanks. The last reason I purchased a newspaper (the Sunday LATimes, about 6 years ago) was to wrap dishes before a move…then I discovered that the box stores had unprinted sheets of newsprint for sale, in a more convenient size for dish wrapping – and the dishes didn’t need to be washed on the other end.
January 18, 2010, 8:58 amegd says:
On another front, when the NYT switches to paid content, how many bloggers are going to link to NYT articles, knowing that many of their readers don’t have a subscription?
Would the Volokh conspiracy discuss a particularly interesting article that half (or more) of their readership can’t read? What would happen to VC blog traffic if this becomes a regular occurrence?
I think if/when the NYT switches to paid content, you will see a lot less linking from the blogs. A blogger may see an interesting article and decline to comment on it unless it is a) publicly accessible elsewhere; or b) of particular and rare interest.
Holy cow. This is the excellence of the NYT in action? Glad I’m saving $600/year on a subscription.
January 18, 2010, 9:03 amBen P says:
Why is the assumption necessarily that an online subscription would be the same price as a paper subscription? $600 a year is absurd, I wouldn’t pay that for any paper.
On the other hand, there is an interesting trend toward the idea of facilitating micropayment for web services. I sure as hell wouldn’t pay anything close to the subscription cost for the NYT, but on the other hand, if they were to charge something like $20 or $40 for a full year? I might consider it.
I did with Pandora, they limit you to 40 hours a month of listening for free, and it’s like $30 a year for their premium services. As far as I’m concerned having a bunch of customized radio stations that I can stream anywhere, including over my phone is well worth what works out to $3 a month. But if they were to charge the $12 or $15 a month that XM Charges I’d drop it in a heartbeat.
January 18, 2010, 9:25 amHenry Schaffer says:
I read a NYT item now and then. Micropayments would be acceptable, but I’m not going to subscribe at any noticeable fraction of $600/year. I certainly would pay $10/year.
As far as IP address blocking goes, I often use the Internet from 5 different locations in one day. Even from the same spot, the IP address can change from time to time via the wonders of DHCP.
January 18, 2010, 9:56 amAllan says:
People pay for ESPN (it is just hidden in the cable bill), but it is not a huge amount.
Bundle content with high speed internet access, maybe (but then people cannot get it at work, a good thing?).
Seriously, $50/month probably would be too much for most people to bear. I would pay $5/month. I don’t know if NYT would agree to that, though.
January 18, 2010, 10:15 amnathaniel says:
Really 600 dollars a year? That is ridiculous. Here is a little trick, and it works for your internet and cable bill as well, call them up and say you can’t afford to pay so much and ask if they can work with you. I have never had a case in which they didn’t give me the current promotional rate.
January 18, 2010, 10:40 amMLS says:
As much as it pains me to do so, this is one subject where I must agree with Mr. Michael Masnick at his Techdirt website. Paywalls for news are a last gasp for online news services that are very likely, if not certainly, doomed to failure.
Mr. Masnick has examined this and other instances where paywalls have been deemed a potential panacea for much of what currently ails newspaper services, and aptly notes that paywalls are in general an attempt to maintain unsustainable business models in the face of the paradigm shift associated with the internet.
January 18, 2010, 11:00 amzuch says:
The N.Y. Times had certain content (including archives) under a “pay per article” model a while back. I remember getting a subscription/account a while back (’90s?) in order to get one article I needed.
Cheers,
January 18, 2010, 11:47 amzuch says:
… as opposed to, say, FauxSnooze (which company has maintained in court their right to broadcast factually false information)?
Cheers,
January 18, 2010, 11:51 amSigivald says:
And now I will go from only reading Times articles when someone links to a registration-free URL, to never reading them at all, ever.
The Times will now become even more hyper-irrelevant, and hopefully die entirely, taking a bit of New York’s exaggerated “relevance” to the rest of the nation with it.
Good riddance.
(I agree they won’t try to charge $600 a year for an online subscription – but I wouldn’t pay $10 for it. The Times does not provide value greater than completely free un-gatewayed media.
Hell, I don’t subscribe to my local rag, which would at least get me local news to go with the recycled AP feed [and recyled Times content!] and kneejerk leftist editorializing.)
January 18, 2010, 1:13 pmAllan says:
Here is the model I think would work:
1. NYTimes starts at $1 per month. Gets 20 million people to sign on, maybe.
2. NYTimes persuades other newspapers to sign on. Perhaps one per major city on the east coast. People can get access to their local paper for 25 cents per month or NYTimes plus their local papers for 10 cents per month. NYTimes only for everyone remains $1 per month. For those who sign up for both, the local paper gets 20 cents per subscriber and NYTimes gets 90 cents.
3. NYTimes adds content to their subscription.
4. Eventually, NYTimes would have a subscriber content where they are generating 10s of millions of dollars of cash flow per month. Periodically, they can add content to make it better.
This is, basically, what cable has done. The profit is in the numbers. The content providers have to, however, provide content that is worthwhile at a price that is insignificant individually, but very significant in the aggregate. The marginal cost is very minimal. so eventually, if they can provide something people will pay $1 to $2 a month for, they will make a bunch.
January 18, 2010, 3:23 pmDarryl Revok says:
They will be very surprised how much fall-off will occur when they start charging. Luckily for the users, the Internet has basically evolved into a free-content medium. Those with replaceable general content will find to their dismay that they are not worth (to most) what they want to charge.
January 18, 2010, 4:04 pmyankee says:
The only way this can work is if the Times is able to convince corporate and institutional customers that it’s worth paying money to provide their employees (or students) with access. That’s how the WSJ has been able to maintain its paywall: they’ve convinced corporate America to give them money so their employees can access their superior business coverage. I can see universities doing the same thing, but will business sign on? I think not.
January 18, 2010, 4:17 pmAndrew Graham » Blog Archive » Some Related News. says:
[...] reporting about the situation in Haiti, and, soon, business-folk at The New York Times will begin charging you for the privilege of reading it online, recent reports [...]
January 18, 2010, 4:29 pmSandy MacHoots says:
A right that was first recognized and constitutionally protected in a case called — uh — New York Times v. Sullivan . . . .
January 18, 2010, 7:34 pmFran A says:
I pay for the WSJ, but paid a good bit more when I first subscribed to the Dow Jones data base which now comes as part of the WSJ. I never paid one cent to read Maureen Dowd or David Brooks and won’t pay again. And, if I were David Brooks, I would get myself to a place where I would be read.
January 18, 2010, 8:49 pmuberVU - social comments says:
Social comments and analytics for this post…
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January 18, 2010, 10:11 pmRandy says:
“New York, New York: the city so arrogant they named it twice.”
A few years ago, the Kennedy Center did Stephen Sondheim festival, and produced six of his musicals over the summer. They had top notch stars from Broadway play the leads, full orchestra, the whole works. It was such a cultural phenomenon that New Yorkers were said to take the train to come to DC just to see it. And they deeply resented having to do that.
Years later, they were still smarting over the fact that Washington did something cultural that they never thought of.
MLS: “Mr. Masnick has examined this and other instances where paywalls have been deemed a potential panacea for much of what currently ails newspaper services, and aptly notes that paywalls are in general an attempt to maintain unsustainable business models in the face of the paradigm shift associated with the internet.”
Absolutely. The shift has occurred and it will take a while for it to shake out. Perhaps Allan’s model would work, but I’m sure that what they are planning is going to chase away readers.
January 19, 2010, 2:04 amRandy says:
Allan: “This is, basically, what cable has done. The profit is in the numbers.”
It’s true. TV used to be totally free, paid for by the advertisers. Then we were all convinced that we *needed* cable, and so we signed up in droves. Afterall, it was just a few dollars a month. I was a hold out, and I was shocked to see that cable had just as many ads as the networks. I thought I was paying so that I wouldn’t have to see ads, right? Friends laughed at my naivete.
Now, I pay easily over $600 a year for cable, and most of it is useless junk. Still, I need to watch old movies uncut, Chef Ramsey’s yelling at stupid restanranteurs, hearing Tim say “make it work,” and so on.
In short, I get the worst of all possible worlds — I pay exhorbitant fees for something I don’t need or really want, and I have to watch countless ads for the privilege. Who ever thought up this business model deserves an Nobel Prize for Voluminous Corporate Profits.
January 19, 2010, 2:11 amSteve says:
News papers used to make the majority of their money with classified ads, such as job listings & rental properties. They are now competing against other online websites and have difficulty coming to grips with this fact. News papers should be teaming up with their online competitors, by having sites such as monster.com take care of job listings and share the profits. This strategy lowers the newspapers capital costs and provides a cash flow. Charging just deters the users to an alternative.
I paid for WSJ Online, but the online news is not as good as the paper. Too many of the online editorials have poor grammar and editorials can take weeks to be replaced. With NYT switching to a pay site, I’ve changed to Times of London. There are too many other sources for decent news, so it’s difficult for any news paper to think charging is a strategic move.
January 19, 2010, 2:17 amBob says:
Like Randy Travis sang, I buy my coffee beans already ground, and I don’t have $600 a year for The New York Times. That amount will buy a good gun, and I can stay here in these cherished hills and hollows and cling to a way of life urban America can only dream of, while my 56K land line slowly loads something more along the lines of Maryland Club or Mrs. Folgers.
January 19, 2010, 5:02 pmv says:
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January 19, 2010, 10:05 pm