NYTimes’ new pay model: They blew it!

By Steve Outing

If any non-niche, general-interest news organization could successfully pull off a digital “metered paywall” model, I thought it would be the New York Times. Alas, today the Times announced its plans and pricing, beginning March 28 in the U.S. (and being tested first in Canada).

I’m disappointed. This is really a bad move that shows how Times management thinking remains stuck in the past. (Or perhaps it’s classic “decision by committee” dysfunction.)

First, the details:

  • Home subscribers (to print edition) get full access to NYT digital content across all platforms, no limitations: website, tablet access, smartphone access. No extra charge.
  • Non-print subscribers:
    • Using website: 20 free articles per month on NYTimes.com before hitting the paywall. Articles reached via an inbound link (blog, Twitter, Facebook, search, etc.) will not be counted against the 20.
    • Using NYT smartphone or tablet app: “Top News” sections free; accessing anything else will hit the paywall.
    • Digital subscription package #1: $15 every 4 weeks. Full access to website and smartphone app.
    • Digital subscription package #2: $20 every 4 weeks. Full access to website and tablet app.
    • Digital subscription package #3: $35 every 4 weeks. Full access to website, smartphone app, and tablet app.

Wow, there are so many flaws in that strategy. Let me count them:

  1. 20 articles a month free, or 1 article every weekday for the 4-week subscription period. This means that nearly everyone who visits NYTimes.com regularly and directly will hit the paywall — and the majority will turn away. What this will do is ensure that an increasing amount of NYTimes.com traffic will come via social-media links and search. The NYT homepage will become much less of a draw to many people. …
    I would have set this much higher if the monthly fee had to be as high as it is. Many casual users who will not pay will hit the paywall with the announced plan; it would have been better to limit paywall exposure to only NYT’s most-frequent web users; i.e., those most likely to pay.

  2. Pricing is absurdly high. Yes, the New York Times is a great news organization producing the best journalism in the world. But faced with those fees when there are so many other quality news websites a click away, a small percentage of NYTimes.com visitors will pay. …
    My suggestion for smarter pricing: 99 cents every 4 weeks using the 20-free-articles-per-month model. $1.99 per 4 weeks for full website access plus smartphone AND tablet app full access. Here’s why: NYT has not learned from the Apple experience. Apparently, NYT executives would rather have a small number of elite digital readers pay a high monthly fee than millions of people paying iTunes- or App Store-like fees. What the high price point will do — because of the low limit on monthly free articles — is dramatically diminish the Times’ importance as a global news organization, ceding its longtime lead to other credible news organizations that choose not to charge online. A 99-cent price point would be a “no-brainer” for many people who like the NYT brand, just as paying 99 cents for a song on iTunes or an iPhone/iPad app is an easy impulse buy: “Why the hell not?! It’s only 99 cents!”

  3. Separate fees for smartphone and tablet app access goes against the trends in media. Increasingly, as consumers add more gadgets capable of consuming news, more people will be switching between viewing news on a laptop or PC, smartphone, and tablet. For that privilege, the Times wants $35 per 4 weeks. To separate pricing for smartphone and tablet apps flies in the face of where media consumption is heading. And that price will attract only a small, affluent customer base. $35 per 4 weeks for ONE NEWS SOURCE online? That is completely off the charts for non-niche news. …
    My solution is simple: one price across all platforms, to make it most convenient for today’s early adopters and tomorrow’s mainstream news audience. See my $1.99 suggestion above.

  4. The high digital price point is obviously designed to retain high-paying print subscribers and extend the life of the print newspaper. After all, if the Times followed my low-pricing recommendation for digital, many print subscribers would be inclined to dump their expensive print home-delivery subscriptions. Fine, I understand that, but it’s a backward-looking strategy that hobbles the potential success of the digital side. I contend that no news organization — even the New York Times — can succeed long term when it makes decisions based on looking over its shoulder at the dying legacy product.

  5. Finally, the Times overlooked offering, ALSO, a higher-priced “Times Premium” membership. Charging 99 cents or $1.99 per 4 weeks is probably the most they can get the majority of people to pay for their news alone. But NYT could also offer a higher-priced premium membership that included not only full access on web, tablets, and smartphones, but also other valuable benefits that make it worth paying more. (I won’t get into that now. It’s another blog post, and I’m running a research project at the University of Colorado Boulder looking at effective models for news premium memberships — so more on that another time.)

I hope someone from NY Times management will respond to my criticisms. If they do, I expect that the justification for this announced pricing model will be that they can’t do harm to the newspaper product. I guess that’s the way it is. But in my view, this over-priced metered-paywall mistaken strategy puts the “Gray Lady” a step closer to the grave rather than getting a chance at a new life.

Once again, the high grades go to the “new” digital media players. I’ll give the Times a “D.” (That at least gives me a tiny fudge factor in case the Times proves me wrong. But I really doubt it.)

Author: Steve Outing Steve Outing is a Boulder, Colorado-based media futurist, digital-news innovator, consultant, journalist, and educator. ... Need assistance with media-company future strategy? Get in touch with Steve!