Why the New York Times Paywall Will Backfire


Finally, the New York Times disclosed details of its long-awaited digital subscription plan today, including changes affecting its online and smartphone readers. The new plan launches today in Canada for testing ahead of a March 28 global launch, but might it actually scare away the readers who stand to benefit the paper the most?

Non-subscribers will still have access to a limited amount of content, including 20 articles per month (which includes slideshows, videos and other forms of multimedia content), after which they will be asked to subscribe. Users who reach stories from links in blogs, social media and searches will also still be able to access stories, even if they’ve exceeded the monthly limit. Digital subscriptions start at $15 billed every four weeks, which provides access to the NYTimes.com website and use of a smartphone app (the NYT iPhone app, for example). A second plan will cost $20 every four weeks and include NYTimes.com access and use of a tablet app (like the iPad app that’s currently available for free), and a third plan will cost users $35 for a four-week period and include unlimited digital access across all platforms. E-reader subscriptions like the one available in the Amazon Kindle store will continue to be sold and priced separately, and home delivery subscribers will still get full digital access as a part of their subscription.

Tiered access based on the device used is an interesting approach, but one I predict won’t be popular. Why, for instance, does tablet access cost more than smartphone access? Because it’s more convenient and enjoyable to read an iPad app than it is to use your  iPhone? After all, users aren’t paying more for better features. They’re paying for the same content, plus a sliding premium based on whether or not they themselves choose to buy a more or less expensive consumption device, or want to access content on multiple devices.

Dave Winer makes a great point in his post of initial reactions to the news: The New York Times isn’t thinking enough about the user’s perspective. In short, he argues the newspaper offers nothing in exchange for what it’s now asking of its users. In fact, as I just mentioned, the plan seems to penalize you depending on what platform you want to access content from.

According to the Times, its iPhone app has been downloaded 6.2 million times since its 2008 launch, and the iPad app has been downloaded over 1.6 million times since October. NYT officials say the iPad app has generated strong interest from advertisers, especially luxury, technology and entertainment companies. Studies have shown that iPad readers are more susceptible to advertising than those using other mobile platforms. The Times is also planning to offer users the ability to subscribe digitally from within the app, which will work with Apple’s in-app subscription system beginning June 30, so it’s clear iOS readership continues to be an audience that’s important to the company.

Yet overall, those app users will be most affected by the new subscription plan. Apps will still work for iPhone and iPad readers, but they’ll only provide access to the Top News section (remember the Editor’s Choice app? Like that.) and all other content will require a digital subscription. No monthly limit will apply in either app. This, I suspect, might be where the Times sees its biggest decline in readers. Light to moderate app users faced with the choice of becoming a digital subscriber or going back strictly to the web with its broader access, I think most will choose the latter, which could hurt the Times’ ability to attract lucrative advertising deals to the apps.

What’s your take? Will you pay for the privilege of using an app, or just go back to reading on the web?

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