I was too busy to post this last week, but it seems like the New York times is going to try charging for online news again.
The Times to Charge for Frequent Access to Its Web Site
Quote: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.
This "metered" approach is one of the more intelligent ways of approaching this, because the repeat users are less valuable in terms of online advertising. They develop "banner blindness" in that they become so used to site layout that they don't look around enough to notice unobtrusive ads and so repeat users don't tend to click on ads. Advertisers don't like showing the same person the same ad more than they want to so they also end up going deeper and deeper into ad inventory the more they use the site. At some point the heavy user may reach a point where there are no paid ads to display to them.
Cutting them off at some point means you charge your biggest fans (most likely to convert) but you don't touch your most valuable (for ads) readers and the open content still invites links and other cross promotion on the web (though the NY Times could do much better about this, and have historically annoyed with registration requirements). The trick is about still being open enough not to see the rest of the web stop linking in to you (if I know that you can't see the article without paying for it I won't send you this link, I will send you one that I know you can see for free) and this approach may well strike that balance.
But it will still have an impact on them, as there will be many users just around their thresholds that will just stop using the site once they get hit by the meter maid a couple of times. And folks who understand how it works will be less inclined to link to the potentially "
walled garden". The web is built around being open and being closed on the web is going to come at some cost. It remains to be seen if the NY Times has enough differentiation (like the WSJ does) to charge and get away with it, even though they are a newspaper of record. I suspect that on some level they must accept the end of the old-world media heyday where large audiences were concentrated on few outlets. The openness means more options, and now that their readers aren't limited to a couple of local papers at most they simply don't have the information market cornered anymore.
The NY Times probably made over 100 million dollars in the last year
just online. And they are still wringing their hands trying to find ways to
survive. No matter what they try to do to raise their revenue I think they need to adapt to changing realities where the newspaper now competes on a more open landscape of information and where the increases market competition has driven costs down for the consumer and advertiser.
The internet is a more efficient information exchange and a more efficient economy, their old-world indulgences need to die off. They can't expect to as easily dominate the information market to the point where they can build corporate empires. What does owning part of multi-million dollar sports teams and stadiums have to do with good journalism? The New York Times company has a piece of the Red Sox, Fenway Park, and are a business empire from an age where cost of entry and operating costs kept information options fewer.
Their revenue is dipping, but I don't buy the fears about quality journalism going by the wayside. They collect about 3 billion a year in revenue, and are simply old-world inefficient if they act like they can't produce quality journalism for much less than that.
The 100 million I estimate their online units to have made is alone enough to produce quality journalism online with its lower operating costs in my opinion. This isn't about the death of journalism but the death of the media moguls who could buy monopolies on information and the death of the trappings that such a position of power affords. There will be some ugly spots in the transition but the end user's information needs will ultimately be better served, even if some big old-world names go down in flames.
Edit: anyone who is interested in the media transition should check out the Nieman Journalism Lab, which describes itself as "a collaborative attempt to figure out how quality journalism can survive and thrive in the Internet age."
They have an article on this story that also touches on other potential developments (namely the suspected launch of an Apple tablet device on Wednesday that some argue is aimed at becoming the middle man for old world media like magazines (where it can shine above the Kindle), newspapers and books.
Here's their roundup of the big NY Times news:
http://www.niemanlab.org/2010/01/this-week-in-review-the-new-york-times-paywall-plans-and-whats-behind-medianews-bankruptcy/
And here is the WSJ on the Apple tablet rumors:
http://online.wsj.com/article/SB10001424052748703405704575015362653644260.html
By the way, if you ever get hit by a WSJ paywall just search Google for the article title and click on it from there. They want the traffic from Google but Google requires that they let the user see the content instead of a paywall through the terms of the indexing program they are using to get their content indexed on Google (and get the traffic from Google, of course).
http://www.niemanlab.org/2010/01/this-week-in-review-the-new-york-times-paywall-plans-and-whats-behind-medianews-bankruptcy/
