The New York Times paywall debate continues

Friday, January 22nd, 2010 @ 6:24 pm | Media, Uncategorized

Earlier this week The New York Times finally announced its plan for a paywall starting in 2011. There really aren’t any surprises and I rounded-up some of the rumours earlier. But the announcement has rekindled the commentary and punditry about the Times paywall.

From the horse’s mouth

Starting in January 2011, a visitor to NYTimes.com will be allowed to view a certain number of articles free each month; to read more, the reader must pay a flat fee for unlimited access. Subscribers to the print newspaper, even those who subscribe only to the Sunday paper, will receive full access to the site without any additional charge.

Executives of The New York Times Company said they wanted to create a system that would have little effect on the millions of occasional visitors to the site, while trying to cash in on the loyalty of more devoted readers. But fundamental features of the plan have not yet been decided, including how much the paper will charge for online subscriptions or how many articles a reader will be allowed to see without paying.

Times media columnist David Carr tries to explain his bosses’ decision and there are some interesting points that I’ll pull out below:

1. The paywall is a flexible tool. The NYT will be able to dial up or down the amount of free articles, charge more or less for online subs.

By building a metered system, the executives have installed a dial on the huge, heaving content machine of The New York Times. Access can be gradually ramped up or down depending on macro trends in the market. Given the dynamic state of the advertising business and how quickly things change on the Web, not so dumb when you think about it.

2. What works for a big brand like the Times might not work for a small paper.

People will assign all manner of broader meaning to The Times’s approach, but The New York Times – like The Financial Times and The Wall Street Journal, which also charge for content – is very much a unique business and consumer proposition. What might work for The New York Times probably won’t work for a regional daily. There will be a lot of speculation on price – The Times is, in part, defining what a digital newspaper is worth – but that number is far less important than habituating a certain kind of consumer to the idea that conveniently accessing certain kinds of content is worth money.

3. Being the middleman is GOLD.

One of the biggest lessons of Web 2.0 is that the company that controls the relationship with consumers is the one that owns the future. It would have been much more expedient to partner with Amazon or iTunes, because they already have the machinery in place and own the credit cards of millions of consumers. But in the long run, they would have controlled and benefited from the relationship far more than The Times.

The more mathematically minded should read Felix Salmon’s post on the numbers behind the paywall.

From the post:

The way that it seems the NYT paywall is going to work, visitors to nytimes.com will have a free allowance of n articles per month. To read the n+1th article, they will have to pay a subscription fee F. After that, they can read as many articles as they like for the rest of the month.

If a visitor to nytimes.com normally reads N articles per month, then the key number in their mind will be N-n. If reading that number of articles is worth more to them than F, they’ll pay the fee. If on the other hand N-n is small, or perceived value-per-article is small, then they won’t pay. Specifically, if the average value to the reader of any given article is v, then they’ll pay the fee when v(N-n)>F.

Across the pond the Daily Telegraph weighs in on the paywall question and says that it likely won’t work, simply because there are too many ways to get around it.

Ken Doctor over at his blog Content Bridges tries to answer nine questions about the Times’ strategy.

And the good people at the Nieman Lab, who are paid to think about this stuff all the time, have an amazing roundup of talk about the Times. Happy reading.

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