The Grey Lady builds a paywall
Sign of the Times
Mar 17th 2011, 17:10 by J.B. | LONDON
In January 2010 the New York Times announced that it would begin charging non-subscribers to read news on its website. Today it revealed the details. The newspaper will let everybody read up to 20 articles per month for free. It will also let people read five articles a day if they come through Google. Access through social networks like Facebook will be effectively unrestricted. Other than that, the charges are $15 a month for web and smartphone access, $20 a month for web and tablet access, and $35 a month for the lot.
One wonders: what part of this plan took more than a year to work out?
The Times’s paywall is a variant on the “metered” model most strongly associated with the Financial Times (owned by Pearson, part-owner of The Economist, which also has a metered paywall). The idea is that casual readers of the paper will be able to keep visiting the website, whereas heavy users will be charged. On the face of it, this seems peculiar. Why would a paper want to punish its most loyal readers, who are more likely to live in the country and are thus worth more to advertisers, while letting casual, low-value readers snack on its content without paying?
The answer is that newspapers such as the New York Times have come to see the web in a different way. Although digital advertising revenues at the Times’s News Media Group grew by a healthy 18% between 2009 and 2010, to $212m, overall ad revenues fell by 4% and subscription revenues also fell. The New York Times has concluded (as the Wall Street Journal and the Financial Times concluded some years ago) that online advertising cannot possibly grow quickly enough to counteract the decline in paper advertising and readership that newspapers, by putting the content online for free, are almost certainly speeding. The web is great—but it is great not so much as a source of revenue but as a cheap way of attracting paying subscribers. It’s a shop window, not a business. Heavy users get the requests for money because they are most likely to become subscribers.
The New York Times’s move will no doubt provoke scorn in the blogosphere. The fact that a paper with such a large online readership has left the free-content fold will be seen as an almighty slight. Yet the newspaper has attempted to make peace with the digital mullahs by building a rather low, permeable paywall. Perhaps it is being too cautious. Why, exactly, is a reader who comes to the website via Google or Facebook more desirable than someone who types in “www.nytimes.com”? Still, walls can always be built higher, and holes can be filled.
One wonders: what part of this plan took more than a year to work out?
The Times’s paywall is a variant on the “metered” model most strongly associated with the Financial Times (owned by Pearson, part-owner of The Economist, which also has a metered paywall). The idea is that casual readers of the paper will be able to keep visiting the website, whereas heavy users will be charged. On the face of it, this seems peculiar. Why would a paper want to punish its most loyal readers, who are more likely to live in the country and are thus worth more to advertisers, while letting casual, low-value readers snack on its content without paying?
The answer is that newspapers such as the New York Times have come to see the web in a different way. Although digital advertising revenues at the Times’s News Media Group grew by a healthy 18% between 2009 and 2010, to $212m, overall ad revenues fell by 4% and subscription revenues also fell. The New York Times has concluded (as the Wall Street Journal and the Financial Times concluded some years ago) that online advertising cannot possibly grow quickly enough to counteract the decline in paper advertising and readership that newspapers, by putting the content online for free, are almost certainly speeding. The web is great—but it is great not so much as a source of revenue but as a cheap way of attracting paying subscribers. It’s a shop window, not a business. Heavy users get the requests for money because they are most likely to become subscribers.
The New York Times’s move will no doubt provoke scorn in the blogosphere. The fact that a paper with such a large online readership has left the free-content fold will be seen as an almighty slight. Yet the newspaper has attempted to make peace with the digital mullahs by building a rather low, permeable paywall. Perhaps it is being too cautious. Why, exactly, is a reader who comes to the website via Google or Facebook more desirable than someone who types in “www.nytimes.com”? Still, walls can always be built higher, and holes can be filled.
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