Tomorrow’s the day: NYT ill-advised paywall debuts in U.S.

By Steve Outing

Monday marks the rollout of NYTimes.com’s “metered paywall,” which I wrote about (and criticized) here last week (before going on vacation for a week). Here are a few quick developments and additional thoughts about what is an important milestone in the digital-news space:

What do you think of the NYT paywall? Tell Columbia researchers!

Columbia University researchers Shahzeem Attari and Jonathan Cook are conducting a survey on attitudes about and intentions of using (or not) the new New York Times metered paywall. Take the survey here and help them get a good number of responses so that the results are meaningful. (They’ll also appreciate it if you share the link further.)

Can NYT lower the price after starting so high?

I’m sticking to my criticisms as expressed in my last blog post about the NYT paywall. One thing that absolutely confuses me is why Times executives would choose to begin the program at such a high price for digital access ($15 per 4 weeks for web + iPhone/smartphone app; $20 per 4 weeks for web + iPad/tablet app; and $35 per 4 weeks for web + iPhone/smartphone app + iPad/tablet app). Starting high will make it awfully difficult to lower the prices to levels that will work for more than the few NYT supporters willing to help out the company.

Last week, NYT’s David Carr wrote a defense of the program and pricing, and reading through the user comments is telling. Lots of commenters said that they would be willing to pay $4.99 a month; that number appeared often. Indeed, many indicated they’d sign up in a heartbeat for a digital plan (no print edition) that allowed access to NYT content on any device (PC, laptop, smartphone, tablet) at that price. But the vast majority in that comment stream balked at the Times’ high asking price. They’ll go elsewhere for quality free news online, or work around the paywall limits, which is pretty easy to do.

Let’s imagine that this is an accurate reading of public reaction to the Times’ pricing, and that NYT executives wake up to realize that $4.99 is the monthly price that will bring in the greatest success all-around, in terms of dollars incoming and number of paying subscribers. The people already paying the exorbitant rate will all have to get refunds based on the new rate, I guess — or feel like dummies for paying so much in the first place.

Wouldn’t it make more sense to start with a (pretty standard-model) charter rate that was very low, then raise rates later? Odd.

‘We need this to survive!’ … zzzzz

Catching up on reading after my vacation, I spotted David Winer’s March 17 piece, “Comments on NYT paywall announcement,” and he makes a strong point that I’m 100% in agreement on: The Times’ pitch for people to begin paying for news online is that “We need this to survive.” … Fail!

So much better, Winer wrote (and again, 100% concurrence here), would be an offering of value to consumers. “Wouldn’t it have been wise to, at this juncture, offer something to sweeten the deal. Something truly exciting and new that you get when you pay the money. Something that makes your palms sweat and your heart beat faster?”

This supports my notion that premium memberships are a smarter idea for most news companies that want to bring in more revenue online. Currently, the Times is asking for people to pay for something that they’ve received free online for many years; that’s a difficult sale, when other quality news providers continue to be free. To compound it, the Times offers nothing new to “sweeten the deal.” … Fail.

False charge: I say news should be free

My last blog item got tweeted and shared quite a bit, and I spotted some pushback like this tweet: “NYTimes’ new pay model: They blew it!, or Why I want to bitch about paying for stuff on the internet (Via @steveouting)”

I need to push back on that one. In the case of NYT, I do think they can succeed by charging. As explained in my last post, I believe that a larger success will come from asking a much, much lower monthly fee; I suggested 99 cents for web-only full access to NYT content, and $1.99 for all-device access. As noted above, David Carr’s commenters indicate that $4.99 a month might be a price point that fills the NYT Co.’s bank account nicely.

No, I’m not bitching about paying for stuff on the Internet. I’m criticizing a pricing model that reflects an old-media view of doing business on the Internet and fails to address the realities of the Internet (one of them being that under-30ies are extremely unlikely to pay for NYT content online, so the debut price structure completely writes off younger readers; how smart is that?). If NYT execs followed my advice on the 99-cent/$1.99 pricing, they might still have a chance at the younger audience. Apparently they don’t care, which I find appalling. I guess the younger crowd can continue getting their news from Jon Stewart and Stephen Colbert. Oh, and Arianna Huffington.

Also, a high rate charged by ONE news provider damages the rest of the industry. If I as a typical consumer decide I love the Times so much that I’ll fork over $15, $20, or $35 every 4 weeks for access, I am extremely unlikely to add any other paid news sources that also demand payment, including my local newspaper website, should it charge. The more general-interest news sites that charge for access to non-premium content, the amount any one can attract will dwindle over time. There are too many quality news sources available online for site-specific charging to work over the long term among news websites.

Back to the premium-membership model: I think that for general-interest newspapers that are NOT the New York Times, free general-news content and a fee for premium “stuff” is the strongest option. What that stuff is I’ll address at a later date, after some research by a few of us at CU-Boulder is completed or at least further along.

Thanks, Lincoln, for the free NYT subscription

Finally, here’s another NYT-paywall development that has me scratching my head. Lincoln (the car brand) sent out e-mails to (I’m assuming) frequent-visiting NYTimes.com registered users, including me, offering a free NYT web + iPhone/smartphone account for the remainder of 2011. Yes, I accepted the offer; presumably I’ll be getting e-mails from Lincoln marketing a car I’ll never buy.

I don’t grok the logic of this, other than that Lincoln probably waved some nice cash in front of the Times. For those who pay $15/$20/$35 per 4 weeks, won’t they feel like chumps if they didn’t receive this offer and learn about it?

I don’t know NYT execs’ logic on this; perhaps they’ll let me know. Perhaps the e-mail went out to long-time registered NYTimes.com users. If that was the case, that would be a group of people long used to free access and difficult to transition into paying a high monthly fee. So this offer could be a way to ease them toward paying later on. … Perhaps the e-mail offers only went to older registered users — the target market for a brand like Lincoln. Though the problem with that is that older NYT readers are the most likely to pay a high monthly NYT subscription fee! … What’s your analysis of this move?

Author: Steve Outing Media futurist | Digital-media/news innovator | Journalist | Online-news pioneer | Consultant | Blogger | Writer | Researcher | Author | Speaker | Educator

8 Responses to "Tomorrow’s the day: NYT ill-advised paywall debuts in U.S."

  1. Tim Windsor
    Tim Windsor 3 years ago .Reply

    Steve,

    You write:

    “I don’t grok the logic of this, other than that Lincoln probably waved some nice cash in front of the Times. For those who pay $15/$20/$35 per 4 weeks, won’t they feel like chumps if they didn’t receive this offer and learn about it?”

    Is it, perhaps, about the NYTime being able to cite a high number of takers of the new paid plan? Under ABC rules, these would seem to count as “sponsored sales”:

    http://www.accessabc.com/bylaws/bylaw2426_2.htm

  2. D.B. Hebbard
    D.B. Hebbard 3 years ago .Reply

    Concerning the Lincoln offer:

    My guess, Steve, is that they decided that extremely high users would pay for themselves in impressions, and that losing their top users was counterproductive — and they are right.

    One thing that would wreck any paywall system would be losing those who visit the site multiple times a day (so not surprisingly I, too, am one of those who got the offer).

    Finally, if any non-financial newspaper stands a chance at making this work it would be the NYT. But still their chances of success are probably only . . . oops, that is probably best written on my own site ;)

  3. Steve Outing
    Steve Outing 3 years ago .Reply

    Interestingly, my wife is a heavy NYTimes.com user, too, but she did not receive the Lincoln free-subscription offer. That leads me to believe that recipients might be based partly on length of time for having an NYT account. I don’t think it’s age, because a friend who is a bit younger than my wife got the Lincoln offer; he, too, is a heavy, long-time NYT user.

  4. Wow
    Wow 3 years ago .Reply

    Sounds like the NYTimes signed up 100,000 digital subs in a few hours.

  5. Steve Outing
    Steve Outing 3 years ago .Reply

    “Wow”: I haven’t been able to find reference anywhere to 100,000 digital subs in a few hours. But if it’s true it’s a meaningless number at this point because:

    1) NYT is offering the first month for 99 cents; price goes up to what’s been advertised after the trial. Many people who sign up for the 99-cent deal likely will bail out after 30 days, so the numbers a couple months from now will be more relevant.

    2) A lot of people (including me) got free offers from Lincoln (the car brand) for a free 2011 NYT digital subscription. I signed up. Do I count as one of those 100,000 alleged digital subs? That would be misleading, because I will not pay the high rates that have been announced when 2012 rolls around.

    It’s way too early to make any sense of the outcome.

  6. [...] customers, the next question is: What can the Times give to its new donors? As Dave Winer and Steve Outing have both said: “Wouldn’t it have been wise to, at this juncture, offer something to [...]

  7. Frank
    Frank 3 years ago .Reply

    Steve: The print news industry continues to be behind the curve in adjusting their business models. Paywalls or charging for digital access will only work if the source provides unusual information or “value-added” information. That issue is handled nicely by the Wall Street Journal but it isn’t really the strength of most daily newspapers.

    Worse, many of the better quality staff have already left for greener pastures at print media sources along with editors. What remains is some sort of “Alamo” force which would rather fight to the last than get serious about facing the facts and truly designing a working digital news business model.

  8. [...] customers, the next question is: What can the Times give to its new donors? As Dave Winer and Steve Outing have both said: “Wouldn’t it have been wise to, at this juncture, offer something to [...]

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