NYTimes’ new pay model: They blew it!

5 min read
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.)

35 Responses to "NYTimes’ new pay model: They blew it!"

  1. [...] Dave Winer, Erfinder des RRS-Feeds, mag die neue NYT-Paywall überhaupt nicht: Comments on NYT paywall announcement, ebensowenig Journalismusexperte Steve Outing: NYTimes’ new pay model: They blew it! [...]

  2. [...] Former Editor & Publisher columnist Steve Outing says the Times plan is a big bag of fail. It’s too expensive and putting mobile and tablet access in two different price tiers goes against industry trend. (I’d say going against newspaper industry trend might not always be a bad idea, but that’s just me.) [...]

  3. Caroline
    Caroline 3 years ago .Reply

    Perhaps the NYTimes.com should be free to everyone, allow some commenting on articles, but charge people who like to comment a lot. Heavy commmenters might pay for the exposure, which is where media is headed anyway.

  4. [...] A cobrança pelo conteúdo já é considerada cara. O WSJ cobra, por exemplo, US$ 10,76/mês por acesso ao WSJ.com + [...]

  5. gus
    gus 3 years ago .Reply

    …who says the NYT needs freeloaders? And it is a niche site, the niche being quality

  6. [...] of this decision to charge for online content (the most interesting commentary I’ve read is here and here), but what I find most interesting about the announcement is that they’re testing [...]

  7. John Hunter
    John Hunter 3 years ago .Reply

    I don’t think a paywall is a good idea. I do think some kind of subscription may be sensible (I don’t really know what though).

    But given they will have a paywall I do think 20 free is a good idea. That doesn’t mean I think it is a good idea by itself. I am saying given that they are putting in a paywall.

    It does let those dabbling in your content see and potentially join. Not great, but much better than not allowing any.

    It seems people that are somewhat technically skilled (or maybe just not technically inept) will not really be stopped from reading for free if they want – they just have to jump through some hurdles.

  8. umop apisdn
    umop apisdn 3 years ago .Reply

    my local paper charges $5.95/month for online access with no print edition, and I happily shell it out. free access to weather and for major breaking stories for like 4 hours after they go up. NYT could charge twice that and make insane amounts of money. make the phone/tablet apps free but you have to have a login. duh!

  9. E. K. Sommer
    E. K. Sommer 3 years ago .Reply

    You are so right! And I am a devoted Times reader from when I first learned to read, and that was a half-century ago. I’m not sure what I am going to do–but it’s not subscribe and kill trees, and it is not pay $35 a month.

    If you’re interested in my deeper thoughts on matter, I posted on my blog recently about this very subject. I’m adding a link to yours (econotebook.com).

  10. [...] March 17, 2011: Steve Outing offers some great advice to the august Times company, and with a clever business model, which [...]

  11. [...] Lab, Nieman Journalism Lab, The New York Times Company, yelvington.com, Epicenter, paidContent, SteveOuting.com, Online Journalism Blog, Mashable!, The Wire, DealBook, paidContent, Recovering Journalist, NPR, [...]

  12. [...] Steve Outing cree que el precio debería ser “al estilo” iTunes, vale decir acceso completo a 1,99 dólares. Lo apoyo, claro. [...]

  13. [...] for the reaction and analysis: If you only have time for a few pieces, make them Ken Doctor, Steve Outing, and Felix Salmon. If you want a quick sampler platter of opinions, you can’t do any better [...]

  14. Matthew Caylor
    Matthew Caylor 3 years ago .Reply

    With most newspaper sites averaging a 50% sell-out of digital ad inventory is a drop in visitors that disastrous?

    It will be interesting to see how this all plays out, but also interesting to see if those going into a metered model will start to actively seek-out and penalize those who re-post their content without permission.

  15. David Sanger
    David Sanger 3 years ago .Reply

    Also Steve, the print subscription is per household, whereas the online subscription is per user so a couple have to pay twice , up to $910 a year.

    (that is if they want to comment and use social media links rather than just read with a shared id)

  16. Steve Outing
    Steve Outing 3 years ago .Reply

    David S.: Yes, that apparent lack of household rate is troubling, and I haven’t seen it addressed by NYT execs yet. If the rate was 99 cents per 4 weeks, I don’t think my wife and I would have any issue with each having paid accounts.

    If I had the time today (I don’t), I’d ask them about this (and their reaction to the criticism from many, including me). I hope some other reporter can jump on this.

  17. Steve Outing
    Steve Outing 3 years ago .Reply

    Matthew wrote: “With most newspaper sites averaging a 50% sell-out of digital ad inventory is a drop in visitors that disastrous?”

    To a news provider like NYT, you bet! It’s about reputation as the “world leader” in quality news. It’s also about having an informed democracy, and not blocking important journalism from people who you’ve priced out of accessing your news.

    I wish NY Times Co. would do some smart(er) digital acquisitions that would make up for the newspaper division’s troubles and support lower profit margins on the newspaper/digital-news side. Washington Post/Newsweek has been an example of that with its Kaplan division pulling much of the financial weight. As long as the company is committed to its journalistic mission — and I think NYT clearly is — then is can operate its news business on a low profit margin under such circumstances. (It seems unrealistic to imagine any newspaper company returning to historical high profit margins, until print dies off entirely and a new digital business model emerges that’s possibly capable of that — but that’s a big if.)

    Matthew also wrote: “It will be interesting to see how this all plays out, but also interesting to see if those going into a metered model will start to actively seek-out and penalize those who re-post their content without permission.”

    I hope the publishers are not that dumb, though undoubtably some will take that approach, a la the music industry. (Did that myopic industry’s executives a lot of good. ) Some mis-use is inevitable and not worth pursuing. Some can be dealt with in a positive manner rather than a counter-productive negative way. Check out the Fair Use Consortium and Attributor. It’s been proven many times over than companies playing whack-a-mole on the Internet is futile.

  18. Steve Outing
    Steve Outing 3 years ago .Reply

    Gus wrote: “…who says the NYT needs freeloaders? And it is a niche site, the niche being quality”

    History shows us that quality doesn’t win out over low cost or, especially, free. Yesterday’s story on NPR about the MP3 format is a good example: http://goo.gl/44iXW

    If NYT wants to push a quality message with high pricing that’s required for access, its long history at the top of the heap in the news industry will quickly be, well, history.

  19. [...] (For two different takes on the pay plan, read here for pro and here for con.) [...]

  20. [...] promoting the iPad app or the iPhone app, or even the newspaper’s website. Instead, it seems pretty clearly designed to protect the subscription numbers for the printed version of the Times: if you subscribe to virtually any version of the paper, [...]

  21. Peter
    Peter 3 years ago .Reply

    Um, why would a lower digital price cause print subscribers to jump shop? They could have jumped ship at any point in the last ten years for FREE digital products. With ANY paywall their inventive to can their print subscription is lower, not higher.

  22. John Powers
    John Powers 3 years ago .Reply

    I’ve been a loyal NYTimes.com reader (and registered user) since college, and I think this new plan is ridiculous. There are many things I would pay a monthly fee for, but news is not one of them. If they wanted to charge a yearly fee of $100 or something, I would probably do it for unlimited access, but this 4-week thing is just confusing. It really discourages me from coming back to this site when there are so many free sites with the same content.

    How about an incentive for going digital? Anyone with print delivery who wants to switch to online access gets unlimited use for life… for free. That’s forward thinking.

    Good luck with all that.
    - John Powers
    http://www.johnjpowers.com

    PS – the content on my site is free.

  23. Tom B.
    Tom B. 3 years ago .Reply

    Do the math! You’re getting the Times for 54 cents/day(under the $15 per four weeks plan).That’s a cheap price for quality journalism.

    You’re spending more than that just to download music which contributes little or nothing as far as keeping you informed about what’s going on in real life.

    Stop the whining!

  24. [...] has to pay), why didn’t the Times develop a more forward-looking voluntary model, such as a membership program (as suggested by Steve Outing) or a Times-scale model of Kachingle or Spot.Us? Or a significant advance in daily deals or direct [...]

  25. David Sanger
    David Sanger 3 years ago .Reply

    @TomB says it’s just 54¢ a day for quality news.

    The problem is that it is just one newspaper.

    Do you only buy songs from Sony?

    Would you pay 54¢ a day to watch NBC and be limited or blocked out of ABC, CBS, ESPN etc..?

    Most of us read from many, many news sources. In the recent Japan earthquake coverage I must read many stories from several dozen sources. If they all formed paywalls they’d sink together.

  26. Anna
    Anna 3 years ago .Reply

    >I wish NY Times Co. would do some smart(er) digital acquisitions that would make up for the newspaper division’s troubles and support lower profit margins on the newspaper/digital-news side. Washington Post/Newsweek has been an example of that with its Kaplan division pulling much of the financial weight.

    NYT has been trying…it just sucks at it with this NYT Knowledge Network. There are ads all over for it (with plenty of grammatical issues, no less!) in the paper, but have no idea what the point of it is or how it could possibly make the money Kaplan does. http://www.nytimesknownow.com/ features a Ball State U paralegal course…such an awful brand mismatch! Would be interested in knowing what kind of money this nets…looks pretty weak, esp relative to the Kaplan cash cow.

  27. AMW
    AMW 3 years ago .Reply

    I wouldn’t bat an eye paying $5.00 per month to read the NYT online. But $195 per year to read it online when I don’t even have a smart phone but have to pay the same amount as somone who owns one of these digital toys? GIVE ME A BREAK!

    The price plan is outrageously expensive. THE NYT, unlike the Financial Times, is NOT a niche news source of primary interest for the economic and business elite. It is a general interest news source, and it will lose huge numbers of its “most devoted” readers with the new paywall.

    And here is a question no one is asking:

    Just why would ANYONE pay at least $195.00 per year for:

    1) The content of a paper which was a major cheerleader for the Iraq war, and which didn’t fire Judith Miller until she became too much of an embarrassment and which STILL has Michael Gordon on its staff, though he is, mercifully, off writing another book. These two people were the major stenographers of government war propaganda who passed themselves off as “journalists.” No accountability there.

    2) The content of a newspaper whose White House reporter, Elizabeth Bumiller, famously said she was too “afraid” to confront President Bush in his last press conference before the start of the Iraq war. ANY reporter who’s afraid to confront a President SHOULD have been fired on the spot, but Bummiller STILL has a job, now shilling for the Pentagon instead of the president.

    3) The content of a newspaper which KNEW about George Bush’s illegal wire tapping program BEFORE the 2004 election but didn’t tell us — the great unwashed masses — about it until AFTER Bush was safely re-elected in 2004 because, as the paper famously put it, it didn’t want to “influence the election.” Or…it didn’t give the voters the information they needed to decide if they wanted to re-elect a president who had been engaged in a massive criminal spying operation. But, hey, why give the unwashed masses a choice of re-electing or not re-electing a criminal?

    4) The content of a newspaper which almost totally ignores its own editorial guidelines on the use of anonymous sources (which limits the granting of anonymity primarily to whistle blowers), which allows government “sources” to lie and “spin” at will ALL THE TIME under the cloak of anonymity, without ANY accountability, and lazy “reporters” to pass on their lies as “journalism,” also without ANY accountability.

    5) The content of a newspaper, despite its journalistic talent devoted to on-site reporting in Iraq and Afghanistan, whose output as a result of getting its hands on the Afghanistan and Iraq WikiLeaks documents has been truly pathetic, ESPECIALLY when one compares the NYT’s output of articles with the quantity and quality of the articles written by The Guardian and Deer Spiegel. And even now, the “headline” article for “The War Logs” is still John Burn’s sleazy hit piece on Julian Assange, as if Julian Assange was as important, or more important, as the information contained in the Wikileaks documents on Afghanistan and Iraq.

    6) The content of a newspaper whose output as a result of getting its hands on WikiLeaks’ “Cablegate ” documents has been BEYOND pathetic, ESPECIALLY when one compares the NYT’s output of articles to the articles published by the European outlets — The Guardian, Deer Spiegel, Le Monde and even El Pais —which was FAR superior in both quality and quantity to that published in the NYT as a result of the release of the “Cablegate” documents. For example, did the NYT ever write about how the Obama administration worked with Republicans during Obama’s first few months in office to protect Bush administration officials facing a criminal investigation in Spain for their involvement in establishing their torture regime? This was headline news in Spain for over a week, but in the NYT … not a single peep. And also not a single peep about how the Obama administration also strong-armed Germany to drop ITS investigations into the Bush’s torture regime.

    7) The content of a newspaper whose editor, Bill Keller. informed NYT’s readers that labeling “brutal interrogation techniques” as “torture” would just be an exercise in “tendentious political correctness.” According to Bill Keller, “torture” isn’t “torture” when it’s done by the U.S., only when it’s done by the U.S.’ enemies: Iran, China, Nazi Germany, Vietnam, North Korea, etc., etc. According to the NYT, it’s journalistically improper to call waterboarding “torture” when done by the U.S., but when one if our “enemies” does exactly the same thing, then it may be called “torture” repeatedly and without qualification. An organization which behaves this way may be called many things; “journalist” CERTAINLY isn’t one of them.

    Any newspaper which committed even ONE of the above colossal journalistic blunders, much less all of them, without any accountability whatsoever and without groveling for forgiveness from its readers — and THEN changing the way it does ‘journalism,” which in every single case noted above, the NYT has not — doesn’t deserve ANYONE’S $195.00 of hard-earned money on an annual basis.

    AND …
    “Dumb” doesn’t BEGIN to do justice in describing what a local TV reporter in SF described on air as “a VERY expensive and VERY complicated subscription plan.” That reporter then gave his viewers information on the Twitter feeds as an alternative to accessing NYT articles for free.

    On-air reporters at that same TV station also don’t label “torture” committed by the U.S. as “brutal interrogation:” they call it torture.

  28. Fred Yontz
    Fred Yontz 3 years ago .Reply

    I had decided I would be willing to pay $5.00 a month for online access to the NYT — and forget smartphones and tablets; I don’t have either. But reading AMW’s bill of particulars has added some tarnish to the Times masthead. The departure of Frank Rich, as well, doesn’t do anything positive for the Times.

    I’d still pay $5/month, though I’ve learned of several tunnels through the paywall, but I’ll also be checking out some alternates like the Guardian (thanks, other commenters, for the suggestions).

  29. [...] NY Times’ New Pay Model: They Blew It! at SteveOuting.com [...]

  30. [...] like me to pay for it. To learn more about other takes on the NY Times pay model check out Steve Outing’s site, PaidContent, and Media Gazer accounts. from → JR408 ← The More You Know: [...]

  31. Happy Not-Gilmour
    Happy Not-Gilmour 3 years ago .Reply

    I am an avid reader of the Times online. I am one of those who faithfully tweeted and posted interesting articles (while citing them) to my followers.

    I will not be paying. Monthly payments are a huge hassle. I think Sirius satellite radio has screwed up royally using this model as well. If you have two receivers they won’t link the subscriptions and it just becomes too much of a pain to deal with, let alone pay for.

    I bet they change the model in a year…

  32. [...] sums of money on capital infrastructure, or building a paywall around their online content whose actual goal is to drive customers to purchase print subscriptions. None of this changes the fact that the physical product is something that people increasingly do [...]

  33. [...] sums of money on capital infrastructure, or building a paywall around their online content whose actual goal is to drive customers to purchase print subscriptions. None of this changes the fact that the physical product is something that people increasingly do [...]

  34. JayKew
    JayKew 2 years ago .Reply

    Ok, here’s the deal: I initially subscribed to the digital + smartphone plan (I have an iPhone). Last Christmas, I bought an iPad and thought the NYT app for iPad looked really cool. Alas, I realized my digital + smartphone plan was not valid for iPad. And the “upgrade offer” was just too expensive ($35!!). So I thought, OK, I’ll ditch the smartphone plan and subscribe to the iPad one. (Logical, right?). So I went to my iTunes account and deactivated the option. Since then, it has said “EXPIRED ON JANUARY 17″. But for some reason, at NYT they don’t seem to be aware that my subscription has “expired”. They keep telling me “your account is still active”. I have sent numerous emails, screen shots, etc. trying to explain to them that I just want to switch from one plan to another, but to no avail. My former plan is still “active” with them, so I can’t make the change. When I go to my NYT account via their site, it says my account “will automatically renew on March 17″. I have written them that I formally oppose any renewal without my proper consent, and threatened them with a lawsuit should they go ahead and renew the plan. This is totally ridiculous. What it boils down to is, either the NYT/ iTunes partnership is totally dysfunctional (in which case I cannot be held responsible for said dysfunctioning), or it is a veiled attempt from NYT to keep customers tethered to their plan, or worse, force them to upgrade to the “full digital access plan”, which ought justifiably to make me or any customer downright angry. Either way, it’s a lose-lose situation for NYT, because they’re likely to lose a lot of customers if they continue treating them like that.
    One question: did you have any difficulty understanding what my problem with NYT was? Because apparently, no one at NYT seems to understand. Is it my English? JayKew from France.

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