[Infowarrior] - NYT to charge for access

[Richard Forno]

January 21, 2010
The Times to Charge for Frequent Access to Its Web Site
By RICHARD PÉREZ-PEÑA
http://www.nytimes.com/2010/01/21/business/media/21times.html?pagewanted=print

The New York Times announced Wednesday that it intended to charge  
frequent readers for access to its Web site, a step being debated  
across the industry that nearly every major newspaper has so far  
feared to take.

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.

But executives of The New York Times Company said they could not yet  
answer fundamental questions about the plan, like how much it would  
cost or what the limit would be on free reading. They stressed that  
the amount of free access could change with time, in response to  
economic conditions and reader demand.

“This announcement allows us to begin the thought process that’s going  
to answer so many of the questions that we all care about,” Arthur  
Sulzberger Jr., the company chairman and publisher of the newspaper,  
said in an interview. “We can’t get this halfway right or three- 
quarters of the way right. We have to get this really, really right.”

Any changes are sure to be closely watched by publishers and other  
purveyors of online content who scoffed at the notion of online  
charging until advertising began to plummet in 2007, battering visions  
of Internet businesses supported solely by ads. Few general-interest  
publications charge now, but many newspapers and magazines are  
studying whether to make the switch.

Still, publishers fear that income from digital subscriptions would  
not compensate for the resulting loss of audience and advertising  
revenue.

NYTimes.com is by far the most popular newspaper site in the country,  
with more than 17 million readers a month in the United States,  
according to Nielsen Online, and analysts say it is easily the leader  
in advertising revenue, as well. That may make it better positioned  
than other general-interest papers to charge — and also gives The  
Times more to lose if the move backfires.

The Times Company has been studying the matter for almost a year,  
searching for common ground between pro- and anti-pay camps — a debate  
mirrored in dozens of media-watching blogs — and the system will not  
go into effect until January 2011. Executives said they were not  
bothered by the prospect of absorbing barbs for moving cautiously.

“There’s no prize for getting it quick,” said Janet L. Robinson, the  
company’s president and chief executive. “There’s more of a prize for  
getting it right.”

This would not be the first time the company has attempted an online  
pay model. In the 1990s it charged overseas readers, and from 2005 to  
2007 the newspaper’s TimesSelect service charged for access to  
editorials and columns. TimesSelect attracted about 210,000  
subscribers who paid $49.95 a year but it was scrapped to take  
advantage of the boom in online advertising.

Company executives said the current decision was not a reaction to the  
ad recession but a long-term strategy to develop new revenue.

“This is a bet, to a certain degree, on where we think the Web is  
going,” Mr. Sulzberger said. “This is not going to be something that  
is going to change the financial dynamics overnight.”

Two specialized papers charge already: The Wall Street Journal, which  
makes certain articles accessible only to subscribers, and The  
Financial Times, which allows non-paying readers to see up to 10  
articles a month, a system close to what is planned by The Times.

Most readers who go to the Times site, as with other news sites, are  
incidental visitors, arriving no more than once in a while through  
searches and links, and many of them would be unaffected by the new  
system. A much smaller number of committed readers account for the  
bulk of the site visits and page views, and the essential question is  
how many of them will pay to continue that habit.

Executives said the computerized subscription service must work  
smoothly and communicate seamlessly with the computer systems that  
handle the database of print subscribers. The Times will not use one  
of the pay systems being marketed by other companies, like Journalism  
Online, led by Steven Brill, or the News Corporation, instead choosing  
to create the system essentially from scratch.

“There’s a lot of technical work that we need to do over the next year  
to get this right,” said Martin A. Nisenholtz, the company’s senior  
vice president for digital operations. “And I think if you were to  
benchmark this against other, similar implementations, you would find  
that a year is not excessive.”

Bill Keller, the executive editor, embraced the plan.

“It underscores the value of what we do — trustworthy, aggressively  
reported professional journalism, which is an increasingly rare and  
precious thing,” Mr. Keller said. “And it gives us a second way to  
sustain that hard, expensive work, in addition to our healthy  
advertising revenue.

Company executives would not release estimates of how many subscribers  
and how much revenue an online system would attract, how many visitors  
the site might lose because of it, or how much ad revenue would decline.

The Times Company looked at several approaches, including a  
straightforward pay wall similar to The Journal’s; various “metered”  
systems, including the one they chose; a “membership” format similar  
to the one used in public broadcasting, with rewards for supporters  
but little or no limit on access to the site; and a hybrid among those  
options.

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.”