Grey Lady's Troubles With the P-Word

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UPDATED: Can you implement a paywall at a newspaper web site in 2010, or is charging users for content an act of slow-motion seppuku? What if it isn’t a paywall exactly (such a crude term, after all) but a series of turnstiles, or possibly a metered approach, like a hydroelectric utility? These are the kinds of existential questions that gallop through the fevered brain of many a newspaper executive these days, as ad revenues continue to slump and shareholders grow anxious.

Now the New York Times is (finally) poised to pull the trigger and commit to such a venture, if a recent report by New York magazine is to be believed. The magazine says that the Grey Lady is going to implement some kind of payment system soon — perhaps as soon as next month — and that the debate over doing so has split the paper into two camps (or perhaps only revealed a web-paper split that already existed). Mexican billionaire Carlos Slim Helu, the paper’s largest individual shareholder, is also apparently a fan of charging for content online. Update: The Times has confirmed that it is launching a metered-access system. Reuters has the news and the WSJ has the memo.

It’s hardly a secret that the NYT has been considering a paywall, or at least some kind of content-payment mechanism (you can almost feel executives at the paper wincing when someone uses the “p” word) for some time now. The paper was reported to be working on a new pay model as long as a year ago, and NYT Co. chairman Arthur Sulzberger Jr. confirmed as much in March 2009.

In May 2009, now-former NYT writer Jennifer Lee talked about a potential tiered-membership model on Twitter, after the idea was raised during an internal staff meeting. The paper’s president and its executive vice-president of digital have both talked about the debate over charging readers, and at one point last year the president said a decision would be made by June. In November, however, executive editor Bill Keller said that the decision had proven to be more difficult than expected (hardly surprising), but that an announcement was likely “within weeks.”

According to the NY magazine report — which it says is based on a source close to Sulzberger, as well as others within the NYT newsroom — the paper has apparently decided to go with a “metered” model similar to that implemented by the Financial Times. Under the FT system, which was launched in 2007, readers can see 10 pages for free per month, and then they are met with a subscription wall. Reuters media writer Felix Salmon (who wrote about his issues with the FT metered model here) has recommended instead a more subtle version, in which a reader’s actual consumption is measured, and then at some point they are billed for it — possibly through an iTunes account, if the NYT becomes part of Apple’s much-anticipated iTablet ecosystem.

So what will become of the NYT if and when it actually launches a pay system? The response from many observers seems to be binary — either it will succeed or it will fail. But the real danger is that it will be somewhere in between: neither a runaway success, nor an abject failure, but a slow and steady decline (Jeff Jarvis thinks it will likely be the latter).

The paper’s previous paywall experiment, Times Select, which was dismantled in 2007, arguably fell into that chasm too; plenty of people paid the monthly subscription, but not enough to make a real difference to the bottom line (for what it’s worth, the newspaper I used to work for had much the same experience with its own version of Times Select), and eventually the number of people paying leveled off. In the end, the paper decided (as my former employer did) that it just wasn’t worth it.

Will a metered model produce a different outcome? Perhaps. On the other hand, someone once said that insanity consists of “doing the same thing over and over but expecting different results.”

Image courtesy of Flickr user Transguyjay.

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