January 20, 2010
NYTimes to Charge for Content in 2011
Troubling times at the NYTimes?
“We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right.”, Arthur Sulzberger Jr., chair and publisher of the New York Times.The New York Times today announced it would begin charging frequent readers of its website access fees starting in early 2011. Site visitors will receive an amount of free content each month before charges kick in with print edition subscribers receiving full access as part of their subscription. Despite announcing their intention to charge for access, NYTimes executives are as yet unable to disclose details of their pay-for-content plan. No information is currently available regarding monthly fees or how much free content will be made available each month. The announcement could be the beginning of an end of an era of free news information and content online as publishers struggle to build a profitable digital business model. With a substantial decline in advertising and classified revenues pushing the bottom line lower and lower each month, traditional media outlets have posted record losses for several years in succession. The difficulties faced by traditional media in transitioning to digital delivery has forced the closure of several large operations over the past five years and contraction within nearly every news gathering organization. The results of the NYTimes decision to begin charging for content will be closely watched by other publishers. As Internet users have been loath to pay for information they can usually find for free elsewhere, publishers have been hesitant to charge for content. Nearly all previous experiments in paid-content delivery, including one by this media outlet, have failed. Even the Wall St. Journal, which still charges fees for some content, have backed away from a paid model, offering free access in several instances. The closest existing model is used by the UK based Financial Times which offers non-paying users 10 free articles per month. Unfortunately, traditional revenue sources have shrunken significantly and advertising revenues are far lower than those enjoyed in the first five years of this decade and throughout the twentieth century. Revenues generated online have not translated into sufficient income to keep the presses printing into the foreseeable future. With over 17 million US-based users per month, the New York Times is by far America's most popular online news outlet. Huge user numbers however, do not necessarily mean huge subscription rates. A previous attempt by the NYTimes to charge for online content, TimesSelect, failed due to low subscription numbers. Approximately 210,000 people subscribed, paying $49.95 per year for full access. TimesSelect was phased out in 2007 in the hopes that increased online advertising would generate greater revenues. Publisher Arthur Sulzberger suggests the paid-content model is the future of online news but, at the same time, doesn't think charging subscribers for access is the panacea needed to push revenues above the bottom line. Quoted in the New York Times, Sulzberger said,
"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."Other news organizations are attempting to introduce paid-content models and actively discourage non-paying access to that content. News Corporation has actually threatened to sue bloggers and aggregators who link to their content. It is also developing a pay-for-content system for its properties which include Fox, WSJ.com, the NYPost and the (London) Times.co.uk. The New York Times appears to be developing their own paid system independently of other organizations. As the NYTimes goes, so will other news outlets. The business of gathering, researching, verifying and printing news information is a costly discipline. The plan to charge for content is both necessary and fair according to NYTimes executive editor Bill Keller who was also quoted in today's announcement,
"It underscores the value of what we do - trustworthy, aggressively reported professional journalism, which is an increasingly rare and precious thing. And it gives us a second way to sustain that hard, expensive work, in addition to our healthy advertising revenue."With consumers able to access content from an increasingly diverse variety of digital devices, the days of free content appear to be numbered. Watch for the rise of digital information fees as a trend in the coming years.