NYTimes to Charge for Content

The Gray Lady will introduce "TimesSelect" in September. TimesSelect will require users to pay $49.95 annually to get access to "Op-Ed and news columnists on NYTimes.com, easy and in-depth access to The Times's online archives, early access to select articles on the site, as well as other exciting features."

Subscribers get automatic access to the content online, while the rest of the site's content will remain free. (But if TimesSelect gains traction, expect more of the site to go behind the firewall.)

The question is: Will the paid content strategy succeed?

Previously, publisher Arthur Sulzberger Jr. in an interview with BusinessWeek suggested that the Times was heading in this direction:

"It gets to the issue of how comfortable are we training a generation of readers to get quality information for free," he says. "That is troubling."

The columnists and selected other bits of content are what differentiate the Times from other papers and from wire services. And so it's smart to gate this content from the standpoint of introducing a paid strategy, while allowing people to read the rest for free. (It comes at a time when others such as CNN are abandoning paid content strategies.)

The Wall Street Journal has been charging for access to its content for some time. The WSJ may be in a category by itself for several reasons, however, including the power of the brand and the business/cultural demands to read it, as well as the ability to deduct subscriptions as a business expense.

But one problem with the WSJ's strategy, which recently prompted the paper to offer/tease more of its content for free, is that it hasn't been able to use the online edition to attract new subscribers. The Times is wisely allowing most of its content to remain free to maintain its online, non-subscriber audience (traffic/eyeballs drives the ad revenue).

A paid content strategy for the Times was probably inevitable. And much more than the WSJ, it will test whether charging for content is potentially viable for newspapers. I don't believe it is. Without radical changes in newspaper sites, there are very few that could do something like this and get away with it. (Again, there is tension between an ad strategy and a paid content strategy.)

The TimesSelect price point is relatively low and there are some number of former subscribers out there that might be prompted to resubscribe as a result. There are probably also some number of people who will hand over the $50 in order to keep reading Paul Krugman, Maureen Dowd and David Brooks, et al. This isn't going to work as a strategy to broaden the subscriber base, however.

The Times will probably gain some incremental revenue, but I doubt it will be a home run. We'll see if time (and the Times) proves me wrong.

Interesting, additional information (including plans for an "affiliate network") in Paid Content.

Survey of reaction here.

This Post Has 3 Comments

  1. Greg

    There is a dilemma here. Agree with your comments re news aggregators (didn't AP just announce they would start charging?). But if newspapers charge, as long as content exists elsewhere they'll lose eyeballs. Without eyeballs, they can't deliver value to advertisers — unless it's super-targeted (but even then the low volume won't be very interesting).

    So it's kind of a prisoner's dilemma for newspapers. If all of them charged, and that was the norm, it would work as a model and people would accept it. But as long as there's so much free content, and given the legacy of free content, it's hard to introduce a paid strategy and succeed unless you've got a unique brand or unique assets.

  2. D

    Newspaper sites may not universally be able to charge Internet users to read “the news” but they should seek financial remuneration from third party sites depending upon newspapers’ content for their business models. In a certain sense, news aggregators are receiving the economic benefits of a B-to-B version of a “user generated content” model. It is unclear what the value of the click-through traffic received by the newspaper content provider is vs. a vs. the value of the free content received by the news aggregator. It seems, however, that most newspapers are training potential licensees to expect to receive newspapers’ IP royalty-free.

  3. Greg

    From ClickZ today:

    Chucking a prepared speech at the Syndicate conference in New York yesterday, Martin Nisenholtz, senior vice president of digital operations at the New York Times Company, instead revealed some of the Times' still-in-development plans to support the site's new financial model. These include an affiliate program and the redesign or restructuring of site and content elements, such as RSS feeds, to better exploit what Nisenholtz called the "trend to unbundle from the container."

    The Times already has RSS so I'm not sure what he's talking about exactly. But "unbundling from the container" dilutes whatever uniqueness the Times has to offer it seems to me.

    In general, these moves may backfire in the long term. There was a decidedly mixed reaction to the TimesSelect news and a good deal of strong criticism in the “blogosphere.” That prompted the Times to clarify that it wasn’t intending to put more content behind the firewall.

    I understand the need to diversify revenues, but now may not be the time to introduce a paid content strategy when newspaper growth is only happening online.

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