Friday, April 1, 2011

New York Times: The firewall this time


The New York Times ushered in a new world for itself on Monday morning afternoon at 2 a.m. p.m. That’s when The Times officially launched its content paywall, climbed into the wayback machine of an earlier online business model and took point in the free-fire zone of the future of content and the battle for the public’s hearts, minds and willingness to pay for what it used to get for free.

Realizing that its breadth and presence in the modern world of news would prevent any firewall of its own news content from ever being 100 percent effective, the Times has created a permeable checkpoint Charlie: All who come will be granted admission but, for good economic reasons, some of those who come will be first among equals.

The Times has divided this world into the Visitors and the Subscribers. Visitors can read up to 20 Times articles a month free, “as well as unrestricted access to browse the home page, section fronts, blog fronts and classifieds,” according to a FAQ piece in the Times. It’s $15 per month for anything more than 20 pieces a month.

Subscribers, however, get the laminated pass: The top-tier deal is $35 per month for the run of the park: unlimited access to the Web site and archives, wireless access, plus smartphone and tablet apps. Subscribers to the print edition get full access too.

Readers who come to The Times via links from blogs and social media outlets can read those articles regardless of whether they’ve hit their monthly reading limit. Users of some high-volume search engines (obviously Google) will face a daily limit of free links to Times articles.

The come on? The Times seeks to lure would-be defectors from Visitorville across the border into Subscriber City with a low introductory: four weeks for 99 cents. Ninety-nine hundredths of a dollar! Step right up.

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The Times is no stranger to commingling the garden and the firewall. The company tried it in 2005, with a paywall isolating the TimesSelect opinion section, and charging about $50 a year for access to the work of Times critics, and to the newspaper’s exhaustive archives. You could frolic everywhere in the garden until you came to the wall.

It was a principled try based on recognized appeal and sound numbers: the generally recognized tolerance for an annual online subscription is about $40, give or take. Still, The Times folded the venture two years later in September 2007, chastened by numerous complaints from its own columnists and a decline in page views that amounted to a revolt among the very readers the Times courted.

In 2005, The Los Angeles Times reportedly attempted to charge for access to its arts section, but the newspaper vacated the policy after experiencing a big dip in Web traffic. In late 2009, Variety, the venerable entertainment insider’s bible, rebuilt an earlier paywall for its online content, charging a hefty $248 a year to gain full access to Variety Online.

And Slate, a trailblazing online magazine of commentary launched in June 1996, started charging a $19.95 subscription fee in March 1998. The magazine was widely criticized for the decision to charge for content and, in February 1999, reversed course, returning as a free publication after an uproar from readers and critics.

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That was then. This time around, the idea may really work, thanks in no small part to the gradual conditioning of the public to the idea — and, ironically, a similar conditioning of old-school news managers, many of whom no doubt had to be dragged kicking & screaming to the Internet to begin with.

This latest rush to the paid-content model reflects, finally, a willingness by news organizations and publishers to push back against the longstanding egalitarian mindset about the Internet, a prevailing ethos concerning online editorial content that insists such content should be, with very few exceptions, free of charge.

We can thank the historical ubiquity of the Internet for giving us this sense of entitlement. But a corner’s been turned. Little by little, news orgs are facing down those who’ve reflexively opposed paying for editorial content online (while having no problem paying for a subscription to a print-based magazine). That inconsistency shows that, for free-content supporters, it’s the immediacy of the delivery system that distinguishes print from online.


The fallacy of their argument becomes obvious when applied across the board. The extension of their thinking (all such online content should be free) would mean that cable television service should be free because it gives you more choices than broadcast television; that electricity should be free because it’s such an improvement on candlelight and the steam engine; that automobiles should be free because they move you faster than walking; that every labor-saving device since the dawn of the Industrial Revolution should be free because it makes life easier than life was before it was invented.

Big Media’s finally done with that. Maybe.

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Steve Buttry, a former reporter and editor, now director of community engagement for TBD, a free Washington, D.C. local news Web site, told American Journalism Review in February that when a newspaper embraces a metering plan like The Times, it means imposing the biggest financial burden on its most loyal readers. "'Let's try to stick it to our best customers' -- that doesn't sound like a good business plan to me," he told AJR.

That’s not necessarily true: DirecTV routinely charges its subscribers of long standing significantly more than new subscribers — sometimes twice as much or more — and resists any price breaks for those older DirecTV customers.

Despite that fact, DirecTV’s churn rate — the percentage of subscribers who bolt from the company — is consistently at or under 2 percent. A lesson: When you’ve got more than 19 million customers and you’re adding new ones while your competitors cope with declines, you can afford to walk away from legacy subscribers who threaten to walk away from you.

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The fickle world of news is another thing entirely. One of the risks of any universal adoption of the paywall method, besides the moderate risk of alienating your longtime readers, is the high probability that readers of your publication will look for the same information somewhere else.

A paywall model mostly works best when your publication already has a bookmark status in the reader’s mind, when it’s a Known Quantity. For most news publications, the content isn’t singular enough, or good enough, to warrant squirreling it away behind a paywall in the first place.

And even for the Majors, the legacy news sites making the transition to paywalls, there are so many more sources for news now — from blogs to altweeklies, from big-firehose portals like MSN to aggregators like Google News to the web sites that companion TV stations in major metro markets — that asking general news readers to pay for content, especially in this economy, may be too dear regardless of the sound economic rationale for doing so.

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The Times plan has another problem built into its tiered-pricing approach: by giving Visitors a 20-story-a-month-free limit, the Times is providing all but the most voracious fans of the Gray Lady a convenient jumping-off point for accessing Times content. If most of the current Times readers already observe a self-imposed limit of 20 stories a month or less, there’s absolutely no incentive to pay in the future for more than they read for free right now.

Since the number of Visitors certainly outstrips the number of Subscribers, the Times will be asking those Subscribers to bear most or all of the cost of the new online Times while being only a fraction of the total number of eyeballs that read it. Considering the millions it cost The Times to roll this thing out, that could be a very heavy lift to break-even.

While the numbers for the newly tiered New York Times won’t be truly revelatory for a while, for now it seems The Times has taken an intelligent step that, paradoxically, confirms its vault into the future by firmly relying on what’s distinguished the Times in the past.

But the Times’ pre-eminent status was under siege in 2005, when it tried this before. What a difference four or five years, social media, Facebook and a withering array of choices makes.

What set The Times apart then as American journalism’s City on The Hill may not matter as much today, when the hills — and the valleys — are alive with alternatives.

Image credits: Times building: Haxorjoe, republished under Creative Commons Attribution ShareAlike 3.0 Unported license. Arianna Huffington reaction: The Huffington Post. "Subscribers" ad screengrab: The New York Times. Logos of all companies are owned by their respective parents. Full disclosure: I worked for seven years as a copy editor in the metro, Style and Culture sections of The New York Times.

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