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Up goes the wall: New York Times banks on reading quotas
by Margaret Simons

We have reached a significant milestone in the experiment of erecting paywalls around news content, with the announcement by The New York Times that, starting today with a Canada-based rollout then progressing quickly to the rest of the world, it will charge readers to read the paper online.

The move is significant for several reasons, perhaps most of all because of the way in which the paywalls have been structured. There are several different packages, all priced so as to encourage readers to make the shift to reading online. This is the shift created by the conviction that tablet readers will become mainstream, and the hope that advertisers will pay a premium on this new delivery mechanism. The world’s newspaper companies are now actively hastening the decline of print, because of the high cost of printing on, then trucking dead trees around the distribution area.

The other interesting thing is that there will be holes in the paywall. The NYT is trying to be part of the social media conversation AND get revenue from its most loyal readers.

First, the NYT is the US’s largest local metropolitan publication and a quality newspaper with global reach. The question everyone — from The Australian (whose delivery on its promise to erect paywalls seems endlessly and significantly delayed) and Fairfax publications in Australia, to news organisations across the world — wants answered is whether readers will pay for general news content.

Given its quality and the special place the NYT has in the hearts and minds of its readers, it is well placed to find the answer.

Therefore it is also significant and interesting that the pitch from publisher Arthur Ochs Sulzberger jnr is not about whizzbang new features or reader experience. The benefit he is offering is the continuation of the NYT as a news organisation. “It is an important step we hope you will see as an investment in the Times, one that will strengthen our ability to provide high-quality journalism to readers around the world and on any platform.”

But do readers really love journalism that much? Do they buy the view that it is essential to the good life?

The companion question to whether readers will pay for online news is, how good does that content have to be in order to be worth paying for? David Winer makes the point that the NYT might have done better to actually offer something new:

  “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? I put down $700 last week to get a few minor improvements to my iPad. If they had said ‘Give us $700 so we can survive’, well, I might have done it. But I feel better about getting the new features.”

Now to the structure of the deals. They are almost as complicated as a mobile phone plan, but with prices from $15 to $35 a month for a digital subscription to a paper that sells on the street for $2 a day and $5 on Sundays, there is a clear push to persuade readers to move online.

This is resonant with the push at Fairfax to wind down the printing presses, deliberately trying to have smaller print runs, with all the distribution and printing costs that entails, and get readers to move to tablets. Printing and distribution accounts for up to three quarters of a newspaper’s costs.

Then there are the holes in the paywall. Those who find NYT content through search engines will not be charged. This is nearly half the paper’s traffic. The NYT does not want to be in a walled garden with no gates. It wants to be part of the conversation.

But, read the fine print, and you will see there are safeguards against people using Google and other search engines to game the system. If people try to access more than five NYT articles a day through Google, then they will be asked to pay. One has to ask whether anyone will really be so motivated to game the system without also being prepared to pay. But of course some people will do anything to get something for free.

“Light” readers of NYT content will also escape the paywall. Vistors to the site can get up to 20 free articles a month before they will be asked to pay.

All this amounts to a sophisticated and clearly finely judged approach to the paywall — a more complex and nuanced approach than we have seen elsewhere.  Which does not mean that it will necessarily work. Predictions of doom and destruction are already circulating on the net.

Truth is nobody knows whether or not this will work, but we do all know that the future lies in bold experimentation.

This one will be closely watched, including by The Australian.

http://www.crikey.com.au/2011/03/18/up-goes-the-wall-new-york-times-banks-on-reading-quotas/