11 Comments

Summary:

Update: The New York Times (NYSE: NYT) announced plans this morning to switch on metering for NYTimes.com beginning 2011.

A storm has been…

New York Times Headquarters
photo: Flickr / Alex Torrenegra

Update: The New York Times (NYSE: NYT) announced plans this morning to switch on metering for NYTimes.com beginning 2011.

A storm has been brewing at The New York Times for a while now. Ever since TimesSelect — the paid digital version of the Times — was canceled back in 2007, the “content wants to be free” crowd has danced around its proverbial grave, singing the equivalent of “ding, dong, paid media is dead.”

Now, NYTimes.com is reportedly considering erecting a new pay wall — one presumes a shiner, prettier one than the last wall, but a pay wall nonetheless. Not to put too fine a point on it, but this is a bad idea whose time has unfortunately come.

First, let’s look at what NYTimes.com risks by shutting off the free flow of its particular mix of cultural elitism. For argument’s sake, let’s accept Compete.com’s view of NYTimes.com at about 15 million visitors per month, compared to the WSJ.com‘s smaller 11-plus million. It’s safe to assume that traffic will go down, even providing that some brand-critical content will remain free (please don’t cut off my David Brooks drip, please). The question is whether the traffic will get cut by 80 percent, as our survey would indicate, or whether it will end up somewhere less damaged, cut, say, by 30 percent — though with far fewer page views per viewer because the only way to keep site visits high is to give select content away for free, but that free content has to have a meter on it that expires after some number of pages, typically five.

As much as I like to pick on media companies when they’re short-sighted, I don’t think such a complaint applies in this case. In the spirit of helping to rebuild this particular media company in the digital era, I want to offer a few pieces of advice to the folks finalizing the details of this shift:

1. Give the highest-profile content away for free. A critical decision will be to determine just how much content you can give away for free without undercutting subscription revenue. Look at your sources of traffic — anything that draws dramatic traffic from abroad is something that builds your international reputation. Give that away. Any traffic that preserves the egos (and the skilled contribution) of specific personalities we will avoid naming, should also be free. And, of course, the front page should be sample-able for free.

2. Make free content sell the value of paid content. But even in these free pages, find a way to let free readers know there’s more to be had, not just elsewhere, but even on those free pages. For example, at WSJ.com, comments can be organized to show only those by paid subscribers, thus eliminating a lot of the idiots who post annoyingly partisan comments or intentionally confrontational stuff. Some people would pay to become a commenter whose comments aren’t automatically marginalized. Others would pay to read only those who are willing to pay that price. Too elitist for you? Um. You’re The New York Times.

3. Brace for impact. Even if you get the balance between free and paid right, traffic will fall. WSJ.com has about two-thirds of your traffic, even though it has 600,000 more paid daily subscribers to its print edition than the Times does. That’s a good metric to shoot for: a quarter as many paid subscribers as print subs, or about 250,000 in your case, with traffic somewhere around 9 million uniques a month (using Compete.com’s metrics here, adjust accordingly). That’s after you rebound from the initial confusion. Of course, advertisers will still panic. Ironically, the drop in traffic will constrict supply, driving ad rates up, but over a smaller reader base. The result will be a reduction in ad revenue of at least 50 percent. Plan for it, send the message internally that there’s no way around this iceberg but to try to plow right through it.

4. Don’t bet on Apple’s tablet to save you. We all know you’re timing this to coincide with Apple’s forthcoming announcement about a media-heavy tablet. While it won’t ride in and save the industry, it can help. Make sure Apple (NSDQ: AAPL) has a way to enable offline access to your online content so that tablet readers on the subway don’t suffer from low bars. And whatever you do, make sure your NYTimes.com subscription is multi-platform — don’t ask readers to pay extra to get the pretty tablet version. Make that a carrot rather than a stick; even the movie industry is learning that it’s not nice to double-dip your customer. Content you buy once should be available everywhere, end of story.

Notice that this advice is directed to NYTimes.com and nobody else. Because there is no other newspaper that we believe can pull this off at this time, even though a majority of newspaper editors are considering it. In fact, other papers like the Washington Post and the LA Times should go on the offensive and try to satisfy as many ad-funded readers as possible, since they’ll have a shot at boasting as many monthly uniques as NYTimes.com.

Rebuilding the media isn’t pretty. You can’t satisfy everyone. But you can satisfy customers with convenient access to good content across multiple platforms. That’s what people are paying for more and more — in video, in music, in books, and, increasingly, in news.

James McQuivey is an analyst at Forrester Research, where he serves, and contributes to the Forrester blog for Consumer Product Strategy professionals.

This article originally appeared in Forrester Research.

  1. The NYT should NOT erect a pay wall… they should limit their online content to headlines, they should build, then charge for, a custom social network, and they should push people to buy the print newspaper, where scarcity keeps ad rates high. If people subscribe to the custom social network where the NYT can engage them, those users may also have access to the full content. Asking people to pay for content alone isn’t good enough.

    Share
  2. Great synopsis by Nicholas Carr on how “Information wants to be free” – http://www.roughtype.com/archives/2010/01/information_wan.php

    Share
  3. Hee, hee, Jeff — I love that post, wish I had known about it in time to include it. Can’t endorse it heartily enough. The point Carr makes is one we end nearly all of our client discussions with lately: People pay plenty for access to content (in the most convenient way possible). So even though some are tempted to think content is free, we end up paying a boatload for it.

    Share
  4. The Periscope Post published a great round-up article on the story: http://www.periscopepost.com/2010/01/new-york-times-to-charge-online-readers

    Share
  5. Your article is right on. I think NYT is not necessarily prepared for simple competition. Yes, capitalism encourages us to pay reporters for their efforts; it also dictates we (readers) get our news at the best quality for the best price (ROI). If I can get better (more timely, more in-depth, better-written) reports elsewhere, and especially if I can get them there at a better price, then why would I bother with NYT?

    Share
  6. The New York Times and other rags called Newspapers should give this mess away for free. Why by bad news and slanted media ruled by editors. I gave up Newspaper 3 years ago and I am happier for it. I will no longer take in the bad news nonsense. Why do you think newspapers like Metro (which is delivered in 13 countries) and AM new york are free? Because it all garbage recycled. There was a diabetes story that never made the papers and 3 doctors confirmed it could help maybe cure diabetics here http://www.prlog.org/10491495-publishing-giant-scribd-distributes-collin-caminos-type-2-diabetes-diet-cure-report.html but it was good news so it did not make the newspapers

    Share
  7. I really like Jeff and Scott comments.

    People are paying for information, a lot of money a month for information and content. But they are choosing to pay for these content providers such as cable/satellite or SMS. The newspaper industry is full of bigoted and ideologists cronies with a sense of entitlement and uses written words as an extension of their egos.

    Newspapers can go to H for all I care, I’m totally divested from their biased content…

    Share
  8. If mainstram media start charging, how will they so effectively propagandize the world?

    Share
  9. First question: is traffic or financial health the goal? Second question: would you give this advice to Saks if their issue was online retail competition?
    My personal expectation is that NYT should do the obvious and bundle the sub for the print subscriber/web subscriber (the best of both media) and charge online for anyone else.

    Share
  10. robbo989, funny you should mention retail — I was an online retail analyst in 1998-2000 and faced exactly that question. Most brick and mortar retailers created these funny business units called dot.coms that were their own P&L with different leadership. The result was that these units floundered because they had no capital and could not measure the lift they provided to the brick business. All of them were eventually folded back into the mothership. This taught me one thing: the relationship with the customer is multichannel and you should plan for that. For news providers who have unique content (very few of them, btw), this means nurturing a privileged relationship with the customer most willing to pay for exactly that multichannel access while tossing some free crumbs to the rest. If NYTimes.com is like most, a 90-10 rule applies — 90% of traffic is done by 10% of visitors. That’s the 10% they will try to convert into payers. If they’re lucky, 10% of that 10% will pay and they’ll end up with 200,000 online-only subs (beyond the million print subs who will have automatic access, as you suggest). Hopefully that will more than compensate for the lost ad revenue.

    Share

Comments have been disabled for this post