Christopher Beck

Founder and Chief Vision Officer, 26 Dot Two

This conversation is closed.

What is your feeling on the New York Times online subscription model ?

The New York Times announced their long anticipated Paywall for Digital readers starting March 28th. The initial model is if you consume over 20 stories per month online with your iPhone or iPad you will pay $15 every four weeks, links are still free.

If anyone has the brand equity to pull this off (other than the Wall Street Journal) it would be the NYT. There is no secret on the plunge of readership of Print Newspapers over the last 5 years. In the age of Instant news and twitter feeds the consumption of news through a printed document that was put to bed 1/2 a day or more before you read it seems archaic to many.

If this was done 2 or 3 years ago it would be met with different reception than today. The dramatic growth of tablets and targeted news aggregators like Flipboard, Zuni and Pulse, targeted ones like Mashable, the increasing influence of bloggers means this evolution will probably not create the desired impact for their bottom-line. Just as Craigs list robbed the print editions of classified revenues, I feel the explosion of news aggregators and APPS probably means they are to late to the party.

The question is the long term survival of the model including not only how many people will actually “pony up” but what the churn rate of those subscribing will be, we believe it will be very high. While there may be Regional adaptation of the model in the New York City/ Tri State area there is simply too much free information available to make this work. The better solution would be for them to figure out how to better monetize their content through advertising a model that works for Google, Pandora an virtually everyone providing news/entertainment in the digital space.

Your thoughts?

  • Mar 18 2011: This will never fly. The public will not pay to get online news.

    Last year, Newsday lost millions putting their site behind a paywall. After 3 months, they had 35 subscribers (http://www.observer.com/2010/media/after-three-months-only-35-subscriptions-newsdays-web-site#). When I was 10, my personal newsletter had a larger circulation and brought in more money.

    The problem is that the internet is filled with substantive news sources. The vast majority of them are free. You simply cannot make a viable business by charging someone for content that they can get for free (and just as easily) elsewhere.

    The NYT will likely try to market this as being a great source for editorials and commentary -- instead of emphasizing the hard news content. The problem here is that they are forced to compete with the internet's (and, for that matter, the world's) vast array of bloggers and pundits. They are stepping into an arena in which they will no longer be the big fish in a small pond. From a marketing perspective, it's a losing battle.

    From a brand perspective, the NYT is king… of newspapers. Given their industry, their brand is iconic and largely nostalgic. The internet does not have any truly iconic brands and rejects nostalgia.

    With these kind of business plans, it's easy to see why the NYT is a dying company.
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    Mar 21 2011: Charging works for the WSJ and the FT.

    It something has value and is expensive to produce, it seems logical that those who really do find it useful and/or interesting should be willing to help offset some of the cost of production. Does it make logical sense that we're all content to pay for 3 minute pop songs but shudder at paying for top quality, on the scene reporting and analysis?
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      Mar 22 2011: I totally agree Lise. There is a lot of money and effort put into generating these news. Not everybody may be willing to pay. But they must find a way to monetize it, otherwise their quality will drop, as it is dropping now in many newspapers!
    • Mar 22 2011: Charging works for the WSJ and the FT because of their highly specialized financial content. The NYT does not have that sort of material. The NYT's bread-and-butter is their editorial section, but that will not suffice online. The internet is already full of pundits (bloggers, HuffPo, RCP, etc.), and I can't imagine that too many people will be willing to pay $20/month to read another set of pithy musings.
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        Mar 22 2011: I agree that specialization is a good reason to pay, but the NYT is not any newspaper, it is a global reference. What I don't see why anybody would pay for is for the Daily, you can get that type of content for free in many other places, they don't go into that much depth, nor have the history or the writers of the NYT. The NYT knows that not everybody will pay, that is why they have the meter! Maybe their strategy is just not targeted to you.
  • Mar 18 2011: Among other things, I was once a press photographer. I left the field professionally because I couldn’t see a viable way to make a living in an age of digital reproduction, even less so now that many cell phones have cameras.

    I would pay for original NYT content. I don’t know there’s enough people like me. As the newspapers fold and close up shop, I expect AP and the other news gathering organizations will be forced to develop distribution systems similar to the way music or applications are delivered now. Much lower cost, many more subscribers.
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    Mar 23 2011: There is no doubt in my mind that information technology will not be free; that the www as we know it today will evolve/change and become divided into "free" domain and "pay" domain (though I have been wrong more than I've been right so far in this life)
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    Mar 22 2011: I used to earn my living in the newspaper business, and I always marveled at the newspapers that flourished all over the world. Each one was a little - or major - miracle of human and mechanical systems, delivering high-quality, professionally sourced, gathered, edited, and illustrated information, for such a small price to the consumer.
    The New York Times wants to be paid for its product.
    Print subscribers will have full access at no additional price.
    Anyone who wants to can find a way to dodge the paywall, but paying for a print or all-access online subscription is a way for people to support the systems that produce this brand of journalism.
    Shouldn't heavy consumers (like me) be expected to help pay for the people, the machines, and the logistics that combine to deliver it wherever I am?
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    Mar 22 2011: Judith Miller proved that it's not worth paying for. In fact, the power elite should be paying the NYT to distribute their pulp.
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    Mar 22 2011: The NYT is following a very smart approach that I believe will be successful. They are making the heavy readers pay, without loosing the traffic of the occasional readers and those who come in through social media channels. Social media is very important for the NYT, they have the most retweeted news. Their objective is to monetize the site minimizing the loss in site traffic, and therefore, advertising revenue. They have taken a lot of time to think about this and get it very right. Their sin was to give away quality content for free, now it won't be easy to make the readers pay, but this is by far the smartest approach that they could possibly take!

    I once red that only 20% of the NYT readers were heavy readers, the rest are just swinging by a couple of times a month. With this piece of data in mind, their current strategy makes total sense
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    Mar 22 2011: I do understand the need for the newspaper to make money. I don't think they will have any problem getting people to sign up and continue the subscriptions. Once you get used to it, you forget it.

    I am still a fan of 'old fashioned media' - newspapers, even though they are half a day out of sync with what's going on; books I can hold. I know I'm considered out of touch with the times, but there's something comforting in holding a newspaper and reading the funnies, doing the crossword puzzle and scanning the news I might not see if it was all online.

    Will the online subscription subsidize the print version or will they eventually do away with it? And if they do, what will I do with my Sunday's?
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    Mar 21 2011: There's no question that the NYT is a quality publication that puts a lot of resources into what they create. But to make something paid that was previously free will meet a lot of resistance. If they want this to succeed, I'd say giving access to additional premium content for those that want to dig deeper, would be better received. People will just use BugMeNot and other sites to get free logins, or begrudgingly pay for what they depend on for news. Or perhaps people will be inspired to create their own news sources, based on a different financial model. We shall see...
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    Mar 19 2011: We will pay for the news. Others will follow the NYT. The Daily online real time news is another example of the direction we are headed in. The will be free sources of online news, but we will pay for premium news sources. The product will be superior and the entrepreneurial spirit will take hold, giving us what we want for a price we can afford.
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    Mar 19 2011: Well, if I can get Maureen Dowd's column as my twenty free ones, I have read all of the NYT that I absolutely will miss. I do think they need to make it work but I don't see how depriving the masses is fair. Their pricing model seems high and unfair. Yes, I know it isn't huge but taking all of the 5, 10 or 15 dollar subscriptions will soon be a lot of money.