The NYT’s paywall

By Felix Salmon
January 20, 2010
It's official: the NYT is putting up an FT-style paywall; the paper's Richard Pérez-Peña fills in a few of the gaps.

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It’s official: the NYT is putting up an FT-style paywall; the paper’s Richard Pérez-Peña fills in a few of the gaps.

Starting in early 2011, visitors to NYTimes.com will get a certain number of articles free every month before being asked to pay a flat fee for unlimited access. Subscribers to the newspaper’s print edition will receive full access to the site.

The NYT has decided to take a full year to make sure it gets the technology right: it certainly doesn’t want to run into the issues it faced during the TimesSelect fiasco, where its subscription database was separate from its online-user registry, making it hard to give free access to newspaper subscribers.

I suspect that what’s going to happen now is that as the moment of truth approaches, bloggers will increasingly search around for the NYT’s replacement as online paper of record: the way that blogs work is that they’re backed up by links to reliable sources, and a link is worthless if the person clicking on it risks running straight into a paywall, unable to read the information in question. The NYT’s journalism might well continue to be reliable, but its website won’t be, any more. (For the record: I feel very comfortable in saying that Reuters stories are just as reliable as those of the NYT, if not more so, and that if a link to a story works for you, it will work identically for anybody else in the world.)

The NYT story makes it clear that the only thing which seems to matter here is money, as opposed to brand value:

The approach the company took is “the one that after much research and study we determined has the most upside in both” subscriptions and advertising, Mr. Nisenholtz said. “We’re trying to maximize revenue. We’re not saying we want to put this revenue stream above that revenue stream. The goal is to maximize both revenue streams in combination.”

This is, of course, exactly the approach that the NYT’s management would take if it felt that it was managing a company in terminal decline, and wanted to squeeze as many dollars out of it as possible before it dies. Successful media companies go after audience first, and then watch revenues follow; failing ones alienate their audience in an attempt to maximize short-term revenues.

It’s worth noting too that this move comes in the wake of the botched dismantling of the International Herald Tribune’s website, and its reincarnation as the New York Times Global Edition. The NYT here seems to be voluntarily giving up on all its readers outside the US, who can’t be reasonably expected to have the ability or inclination to pay for web access. It had the opportunity to be a global newspaper, leveraging both the NYT and the IHT brands, and has now thrown that away for the sake of short-term revenues.

As for the question of the NYT’s ability to get this transition right, technically speaking, I’m not optimistic. The NYT website is gorgeously designed, and easy to navigate: the company’s web team is strong. But as the IHT and TimesSelect messes showed, the NYT is less good at making big changes to site architecture, and it’s far from clear why they’ve decided to go their own way, rather than sign on with Journalism Online, especially since the NYT internal memo says that they will “continue to discuss alternatives with a broad range of prospective collaborators with regard to bundled offers and other aggregation opportunities,” whatever that’s supposed to mean.

The wishful thinking in that memo makes it clear just how desperate the NYT seems to be:

In 2010 we will continue initiatives such as Times Open, Times Topics and our work to develop more active communities and more fully integrate the real-time Web. We will continue to develop new online products and offerings as part of our effort to enhance the user experience for our readers and advertisers.

Our strategy is to build the metered model while we remain focused on making NYTimes.com more compelling, interactive and entertaining, providing many more reasons for online audiences to visit our site and stay longer. In the weeks ahead, we will be adding resources to achieve these critically important goals.

Needless to say, it’s almost impossible to build “active communities” behind a paywall. And no one is going to pay an online subscription fee just because there’s a beefed-up Times Topics section. In fact, the whole concept behind Times Topics is being broken by this paywall: they’re meant to be a landing page for people searching for information on a certain subject, linking to many NYT articles on that subject. But now those searchers won’t be able to read those articles, unless they’re already subscribers. As such, a project which was meant to bring nytimes.com into the same space as Wikipedia will now become largely irrelevant.

There’s also no mention of what’s going to happen to the NYT’s many blogs, and on this front I think no news is bad news and that they, too, will be part of the metered system. Suffice to say that the number of successful blogs behind a paywall is, at present, exactly zero.

All in all, this is a sad day for online journalism and the open web, and from here on in I’m going to be linking less to NYT content; if I do link, I’m going to quote its articles at greater length. I don’t want my future readers, once the paywall is up, to be incapable of of understanding what I’m talking about unless they cough up serious money to the NYT.

24 comments

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The NYT will go back to being the paper I buy occasionally on Sundays. I used to swear by their movie reviews, their food reviews, etc — but no more. I also hope Krugman’s blog finds a new home. The other business journalists at NYT are execrable; good riddance. The only thing about NYT economic reporting that I’ll miss is Gretchen Morgenson’s ridiculous articles – she usually picks a decent topic, shows potential in the beginning of her article, then completely misses the point.

Posted by Unsympathetic | Report as abusive

The clear hint that they will not do a good site transition is that to this date, their search sucks. If you try to find an article you read the day before, it takes about five tries. There is no sorting by date, they have a microsoft like attitude about knowing what you want when you submit keywords. I am a paper subscriber and I remember when they had the TimeSelect site what happened was it took 6 months to get the logon info from the company that did the local delivery and because they had no permlinks, no one referred to them on the web. They dropped out of sight on Google news. I remember very clearly that they showed they didn’t understand the web at all. They still don’t

Posted by msobel | Report as abusive

I can understand people’s desire to get as many things as possible for as little money as possible, but I don’t understand what they expect from the NYT. I don’t believe a pay wall is driven by the need for increased profits, it’s more a matter of survival. I’m not saying this is the best strategy, but I have yet to see a news organization establish a successful business model that includes unlimited access to their main product.

If the Times or any other news organization was able to produce its news for free, then I could understand the reluctance of people to pay for it. But everyone knows it is far from free. Yet people pay for the stuff they sell at McDonalds, Starbucks, theaters, sporting events, etc., and typical customers of those products typically spend more there than they would on a news subscription.

I don’t believe a pay wall will solve their problems, in fact it might make it worse. If all of their readers start using the website as the primary medium for the news, they will lose print advertisers, which pay a much higher rate than web advertisers. And I don’t believe web advertising revenues plus subscriptions will cover their operating expenses.

Reuters may be able to provide free access to their news on their website, but once their paying customers (newspapers) go out of business, they will be faced with the same issues.

Posted by OnTheTimes | Report as abusive

No more articles on where to find French Chateaux for under $10 Million? The horror.

Posted by Uncle_Billy | Report as abusive

What do you want from the third best newspaper in town?

Posted by vinlander | Report as abusive

No big deal for me. I had no problem with TimesSelect. I value the NYT content and will pay gladly for it.

Posted by optimyst | Report as abusive

I paid for TimesSelect, and I’ll pay for the new paywall in 2011. If NYT ruins its “global brand” in an attempt to get its customers to actually pay for the best newspaper in the world, my sense is they’re doing exactly the right thing. Screw a global brand when its going to choke you to death.

Posted by corcoran310 | Report as abusive

Unsympathetic wrote: >>I also hope Krugman’s blog finds a new home. The other business journalists at NYT are execrable; good riddance.>>

Sadly, the thing I will miss the most is the political columnists. The Times has good ones on both sides of the aisle. Gail Collins is a Democrat who doesn’t mind pointing out the ineptitude of the Democrats, and David Brooks is a Republican who understands that issues are often complex. We need more, not less, of both those two attributes.

Posted by RhoKen | Report as abusive

They are missing the point that the whole news model is changing. The old model required on-location correspondents to ferret out information and feed it to an expensive newsprint operation with all the attendant production and distribution costs.
The new model that will replace it is characterized by constant streaming of more raw news and commentary from a multitude of non paid contributors via blogs, twitter, and whatever else will replace these.
Those who want to survive must radically cut their legacy costs and then make their revenue by non print advertising and related tangential optional charges. Think how Google keeps their great search site free! The old line news orgaizations that were print based need to also ally with video delivery channels.
The future of smart phones, notebook PC’s, book readers, etc.
will put paper dailies out of business. And with operations like Craigslist, Autotrader, and the job search websites, who need to pay for an expensive print ad to sell a car or fill a job vacancy.

Posted by paoilyone | Report as abusive

RhoKen: You don’t need to miss anything. No one is going away. Just pay for the darn thing. It’s not free to produce, and it’s worth it.

Posted by terrapin | Report as abusive

There is a big difference between “raw news” and professional journalism. One is given for free and generally in the personal opinion of the writer and the other is prepared by a paid professionally trained journalist who has learned how to research and leave him/herself out of the story.

I prefer the latter. It costs money. I subscribe to the NYT and it is delivered to my door 7 days a week but I often read stories on line and certainly breaking news.

Now I suppose you think I am going to say that I think converting to a pay site will work. The fact that I think that is a business model that is fair doesn’t mean it will work or I think it will work. It probably will not. See Slate for a good list of why not. http://www.slate.com/id/2242085/?from=rs s

BUT THEN AGAIN I THINK THE NYTIMES IS BEING VERY SHORTSIGHTED ABOUT ONE THING. Advertising will work on their site (meaning it will work for the advertiser and the advertiser will pay for the audience) if the NY TIMES would treat their site like a network news site, many of which require that you watch a 10, 15 or 30 second ad before watching the clip on a breaking story.

We the reader might not like have to watch the ad, but we accept it. It is what broadcast news has been doing for 50 years. You are told the headlines, you are hooked, then the ads play, then the lead story or breaking news piece. Instead of metering how many articles you can read before the screen goes blank they just have to meter how many articles you have looked at before making you watch another ad. We are use to that and even when we pretend to ignore the ad, somehow the message usually gets through.

Posted by SLPNYC | Report as abusive

I’ve been buying and reading the NYTimes since the early 1960s, now online in China. If they start charging, they’re going to lose me!

Posted by Haqi | Report as abusive

I’m not sure I understand your logic about not linking to NYT. Your readers, if they are casual ones of the New York Times will not come up against the paywall. If they are already frequent readers then they will subscribe or decide to get their news elsewhere. Either way they will be counted as casual readers by NYT. Also, most people don’t click through to the source anyway, as the recent Google News study showed – they look at headline and first para – cherry on the cake… You can cherry pick too :)

Posted by tomforemski | Report as abusive

It’s a matter of staying in business by charging for their product. Those who would like it to stay free should go to work tomorrow and work for free. It won’t take them very long to figure free doesn’t work.

Posted by Taron-M | Report as abusive

Also, web advertising doesn’t generate the same revenue as print or television advertising. And advertising isn’t a stable revenue generator, especially in difficult financial times. I’m confident that you’ll see the Internet eventually switch away from free content to pay-for-use content…like most other businesses. I don’t recall seeing McDonalds offering free food paid for by advertisers. If it was a good business model, I’m sure they’d be all over it.

Posted by Taron-M | Report as abusive

Felix – isn’t a really key question here just where the meter-level is set that converts to “subscription needed”? Let’s say they set it at 60 articles / month. How many of those people clicking through on a link from your blog would be affected? 1%? 3%? 5%? I can’t imagine that more than 5% of unique visitors to NYTimes would hit 60/month level, so the impact is pretty small. However, those hitting 60/month are almost the definition of regular readers and maybe they’ll understand the value they are getting from the paper (albeit in online form) and be willing subscribers. At that point your link works all the time – right?

Posted by nicfulton | Report as abusive

I suppose it depends on the ‘mix’ of news that one desires. I prefer a superficial global balance, through a variety of mediums as it moves through my real-time-lines during my ‘awake’ day:

1. Television which I get while at home/working at home – CNN, BBC, EuroNews; AJE, Russia Today; (Asia-Pacific really lacks in this regard);
2. Radio which I get via my hifi/mobile while working and traveling;
3. Lamp-Posters of headlines as I travel;
4. Reuters during breaks or by choice.

So in a way my cell phone, internet and satellite TV subscriptions already costs me +- $ 100 + $150 + $50 = $ 300 converted in local parity, which forms 5% of my budget before taxes, which is actually high when one starts adding up all the rats and mice and considering that the service provider capital infrastructures should by now be paid off after, say 20 years.

One should also distinguish between newswires and news presenters, the latter buying and feeding from the former and the former supplying both, mostly by monopoly ?

In modern times I really don’t know where people find time to read print anymore, it is environmentally not PC anyway and the detail depresses and confuses me.

I hope Agnes Crane’s article is not prepping us to start paying for this globally inconsistent and messy website. I only have time for headlines and superficial opinion and blogging with the fun factor driving me.

As always the answer lays/lies in the maths, i.e. after representative surveys, calculating contribution per unit for above options by subtracting variable unit costs from matching unit revenue streams and optimizing the options, while considering fixed costs, which I doubt the NYT did, which is why they have become desperate.

Posted by Ghandiolfini | Report as abusive

Along with Reuters is McClatchey, which has been giving readers the only consistently truthful reporting on US imperialism of all the US mainstream news sources.

Posted by michtom | Report as abusive

” If they start charging, they’re going to lose me!”

And their employees, roofers, landlords, electric companies etc say, “If they stop paying me, they’re going to lose me.”

When push comes to shove, they’re not going to care about losing readers that won’t pay their fair share of the costs out of some strange ideological objection.

Let’s just see how long Mr. Felix Salmon keeps his job after the last newspaper goes out of business and stops paying Reuters.

Posted by fragmatic | Report as abusive

I can’t help but notice that all the old IHT links work now, they just redirect to the NYT site. And they’re not behind a paywall (but they are behind the standard NYT registration wall).

I didn’t even know the FT had a “meter” until the NYT meter rumors started. I occasionally read articles there and occasionally link to them. I read and link to NYT articles far more frequently, but given a sufficiently generous meter (say, 20 articles a month) I don’t see why this would be a problem for me or for most readers and bloggers.

Posted by klintron | Report as abusive

Great piece and fair reaction. Not sure that the NYT’s exploration of partnership options signifies desperation. Seems like the opposite; otherwise, why partner?

What’s most interesting to me is thinking about paywall communities. If Facebook started charging $5 a month, would internal communities be any less robust? I don’t think so. As journalism companies get stronger at connecting people, the communal aspect will be part of the draw and a perk of the price of entry.

The link problem you bring up is big, but it doesn’t have to be an all-or-nothing proposal. The NYT can create links for influential bloggers that are functional for the bloggers’ readers but can’t be tossed around on FB, TW, email etc.

Posted by gregspielberg | Report as abusive

If anyone wants to calc in the numbers on the cost of printing and delivering the actual papers, I pulled them together here:

http://eatsleeppublish.com/can-jason-sav e-the-newspapers/

Posted by ReutersRat | Report as abusive

…Felix, I suppose what I am saying is that I am not a big fan of video clips, but would like Radio Reuters – a service that plays uninterrupted music for 55 minutes with a 5 minute news headlines every hour. Low bandwidth consumption please.

Posted by Ghandiolfini | Report as abusive

Well this is all a bit self-serving isn’t it? A blogger with no responsibility for generating the money to pay him and who admits that the value of his blog is predicated on links back to good (and expensive to produce) journalism criticizes an organization that has to pay its staff for charging for the product that they produce and upon which his blog has hitherto relied. And furthermore, he recommends his own employers’ content which, where it is not charged for (and lots of Reuters content is), is a cross-subsidy for other media services which do have to make a profit. It seems to me that you all want good free content and therefore explicitly accept the advertising driven model without realizing that dependence on advertising is a threat to the quality you once respected. If you won’t pay for properly verified and investigated content, and are happy to accept the vagaries and problems of the blogosphere, then fine. But don’t criticize people for trying to make the money to pay their staff with.

Posted by SimonBrady | Report as abusive