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Why the New York Times Paywall Will Backfire

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Finally, the New York Times (s nyt) 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 website and use of a smartphone app (the NYT iPhone (s aapl) app, for example). A second plan will cost $20 every four weeks and include 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 (s amzn) 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?

30 Responses to “Why the New York Times Paywall Will Backfire”

  1. A single, $15 or $20 per month fee for all ITunes-authorized shared devices on a HOUSEHOLD network. That’s up to five Macs or PCs, and all iPods, iPhones and iPads.

    Households don’t pay separate fees for each family member who reads the morning paper! These companies should be giving away their content to kids — to groom a new generation of young subscribers who are their future.

    They should NOT be charging $15 or $20 per month/per device! People will never pay this! These old world newspaper people are absolutely NUTS with these pricing schemes.

  2. Bert de Jong

    I’m a dedicated NYT reader, but like other I fail to see why I have to pay more than a print reader, and why as an iPad reader I have to pay more than an iPhone user. I don’t mind paying, but the present costing is not clear and unfair. I may revert to print…

  3. Michael Smith

    I don’t think they understand how this has already failed for the Financial Times and the WSJ. Because they all allow you to read if your referrer is a search engine, you just have to go to Google News, type in the title of the story and then click thru. Their paywalls are meaningless. And frankly, it’s news, in this day and age we can get the news from a 1000 sources in 100 countries in english and on demand for Free.

    They can cling to their old model if they like, but much like the entertainment industry is slowly learning, the economics of the market have changed. They can change with it or whither away. The choice is really theirs.

  4. I would rather subscribe to the print edition but it is not delivered in my rural area. And I don’t have a post office box big enough to receive copies by USPS three days late.

  5. Michael O'Brien

    Good news does not come free! Lots of people work hard to produce what you find in the NY Times. All news reporting is not equal. For the most part, you get a much better quality of news reporting in the NY Times than in most other papers or news sources. Don’t be afraid to pay something for it!

    Let’s all do our part too. :-)

  6. Mtolincoln

    Baloney! Not too much to pay at all! A good plan! Reasonable!
    Now you can subscribe to everything for a month on your computer for only $15. Way less than a print subscription!
    This new option let’s news consumers, like me, contribute something to the costs of collecting and reporting the news I rely on everyday. I do not want a print subscription, but do not want my best news entirely free either. Don’t want to see the NY Times news reporting downgraded or disappear like so many other news organizations.

    Think of the big picture folks. Pay something for what you value and use. Or it won’t be there any more!


  7. I will not pay for any news services on the web, and I’ve deleted my iphone app and cancelled my emal subscriptions from NYT. this will prove to be the most stupid thing they’ve done to date. I despise greed in any form, but this is just silly. Lately NYT have shown several severe lapses in judgment; going against wikileaks and assange, accusing a 11 year old child of having asked for the gang rape she suffered, failing to confront Obama on every shitting thing he’s done over the last year, and now this. Enough, I don’t need you.

  8. I have been reading the NY times for years, and I am very confused by their pricing. For the full service I need to pay $38 a month. I think I’ll skip straight to the huffingtonpost etc…, and buy myself a few more books every month instead.

  9. I read the Times daily, on the IPAD and the web. I also read the Book Review every week. I would pay for a subscription at a reasonable price. This is not that. Why not take smaller bites? Do they really need to charge this much to make a profit on their digital content?

  10. I said on another site — 20 articles or $15/month seems pretty reasonable to me, but when they ask an additional $5/month for their crappy iPad app (which I rarely use now when it’s free) and $35(!) for “all platforms,” they are nuts. They vastly overrate the quality of their apps. A browser is the best way to view NYT content currently.

    I’ll also point out that exempting twitter/Facebook links from the 20 max is admirable of them, and I suspect it’s something that won’t last. That is how many people do — and will in even greater numbers — find the nyt articles they’re interested in.

  11. Andrei Timoshenko

    Bad implementation of a good idea. Content needs to be directly supported by the people who consume it. After all, a company’s customers are the people who pay the company money. I would much rather be the customer of the producers of the content that I consume, than have their customer be some corporation. That way, the content producers will have my interests and only my interests at heart.

    The person who will figure out a way to do this right will make a killing. At present, totally free content is unsustainable (content producers need to eat), ad-supported content is corrupting (media shills for its advertisers, while you pay for your consumption of media by letting yourself be convinced to consume other stuff), and walled-in content is restrictive.

  12. Key sentence here: “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.” I’m not worried.

  13. Having thought very long and hard, the Times comes up with a plan that shows they still don’t understand digital media. This is all about protecting their existing revenue streams.

    Subscribing on paper is cheaper than the digital options but gives you full digital access because the Times needs to keep its print subscription numbers up. They still make far more on paper advertising the online advertising, so they make up the subscription price difference by keeping a higher subscriber number for the print edition, even if all those papers just go into the recycle bin. Very annoying to those of us who see the iPad as a way of eliminating wasteful, cluttering paper from our lives.

  14. Guess I’ll be reading the NYTimes a heck of a lot less. I guess I’ll find another place for news. I hear good things about something called the internet where I can get lots of news for free.

    I wonder if the Times has heard of it?

  15. Way too expensive and too complicated. I was also going to sign up, but Here’s why it will fail:
    1. $240 a year in this economy is just too much.
    2. TOo complicated. Why penalize people with separate plans if you have iPhone and iPad? makes absolutely no sense.
    I was thinking more like $50 a year would be reasonable but I guess I am not their demographic (rich white male) am I?

  16. CyborgSam

    Too expensive, given that most of the news content is available elsewhere for free.

    I was going to sign up, but not at those prices. I just don’t read enough of the content to justify the expense.

  17. After all this time the collective minds at NYT figured this is the best way for them to stay competitive and financially solvent. 20 articles a month? That’s silly.

    I have no problem with wanting to profit from your original content, but come up with a less-confusing model which doesn’t sway people into more print subscriptions. It doesn’t take a genius to figure out most people go for the cheaper option if presented with the same end result. At the end of the day all this really does is increase their print circulation and I’m sure that’s how they figured they could re-generate more revenue. It’s interesting, since they are betting on the fact that people will pay more for convenience.

  18. jameswales

    They definitely seem to be penalizing people who consume their news digitally. Interestingly, the price of a print subcription, which includes digital access in all formats, is $12 a month less than the all-access digital-only plan. Just arrange for them to be delivered directly into your recycling bin.

  19. Not to mention that the NYT iPhone and especially iPad apps are slow and buggy. I am a dedicated NYT reader, but if they expect their readers to put up with their S-L-O-W apps while paying over $200/year for access, they just don’t get it.